Free Response to Proposed Findings of Uncontroverted Fact - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

SACRAMENTO MUNICIPAL UTILITY DISTRICT, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant.

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No. 98-488 C (Judge Braden)

DEFENDANT'S RESPONSE TO SACRAMENTO MUNICIPAL UTILITY DISTRICT'S PROPOSED FINDINGS OF FACT I. 1. Introduction And Overview. In accordance with the Nuclear Waste Policy Act of 1982, 42 U.S.C. §10101 et

seq. ("NWPA"), DOE and SMUD entered into a contract for the acceptance and disposal of SMUD's spent nuclear fuel ("SNF") and/or high-level radioactive waste ("HLW") on June 13, 1983. See Contract for the Disposal of Spent Nuclear Fuel between DOE & SMUD (June 13, 1983) (Plaintiff's Exhibit ("PX") 44) ("Contract" or "Standard Contract"). RESPONSE: The Government does not dispute SMUD's proposed finding of fact. 2. SMUD has paid the Department of Energy ("DOE") a total of approximately $40

million in fees under its Contract with DOE, thus satisfying its obligation of performance under the Contract. See Memorandum Opinion dated Jan. 19, 2005 at 4 ("Memorandum Opinion") (noting "SMUD has paid all applicable fees required by the DOE Standard Contract"); Gov't Answer at ¶ 22 (noting payment of fees is undisputed). RESPONSE: The Government objects to SMUD's proposed finding of fact. First, 1

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SMUD's proposed finding of fact is not supported by any admissible evidence. Second, SMUD has presented no evidence that it is prepared to unload its multi-element sealed canisters ("MESCs") for the delivery of SNF to DOE and, therefore, SMUD is unable currently to satisfy its performance obligations under the Standard Contract. Further, SMUD has not paid DOE any money for the disposal of the 25,000 pounds of Greater Than Class C low level radioactive waste ("GTCC") in SMUD's possession. DPFOF ¶¶ 203-204.1 3. With interest, those fees were worth approximately $100 million in 1997. Letter

from J. Schori at 2 (Mar. 14, 1997) (PX 528). Today, SMUD's payments to DOE under the Contract would be worth far more than $100 million. RESPONSE: The Government objects to this proposed finding of fact to the extent that SMUD has provided absolutely no evidence as to what the worth of its payments would be in today's dollars. Further, this proposed finding of fact by SMUD is unnecessary to the Court's decision in this case. 4. DOE has breached its reciprocal obligation under the Contract--the "quid pro

quo created by Congress" in the D.C. Circuit's words--to commence acceptance of spent nuclear fuel ("SNF") and high-level radioactive waste ("HLW") by January 31, 1998, and thereafter to remove SNF and HLW from contracting utilities, including SMUD, in a reasonable manner. Indiana Michigan Power Co. v. United States, 88 F.3d 1272 (D.C. Cir. 1996); Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1342 (Fed. Cir. 2000). RESPONSE: The Government objects to this proposed finding of fact to the extent that it is a conclusion of law. The Government does not dispute that the United States Court of Appeals for the Federal Circuit has held that DOE partially breached the Standard Contract by failing to commence acceptance of SNF, under the acceptance terms set forth in that contract, beginning on January 31, 1998. See Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1342 (Fed. Cir. 2000). However, the Standard Contract does not require that SNF be accepted in a "reasonable manner" (see DPFOF ¶¶ 113-126), and neither the United States Court of Appeals for the D.C. Circuit in Indiana Michigan Power Co. v. United States, 88 F.3d 1272 (D.C. Cir. 1996), nor the Federal Circuit in Maine Yankee, held that such a requirement existed.

"DPFOF" refers to the Defendant's proposed findings of fact that we filed on September 20, 2005. 2

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5.

Because of the government's breach, SMUD has incurred substantial damages

resulting from the design, licensing, and fabrication of its own on-site storage facility, referred to as an Independent Spent Fuel Storage Installation or ISFSI, for the long term dry storage of its spent fuel. As detailed further below, SMUD has incurred $21,553,462 in damages from 1992 to 1997 and $55,049,870 in damages from 1998 to 2003. See PFF ¶¶ 199-241. RESPONSE: The Government disputes SMUD's contention that it has incurred damages related to the design, licensing, and fabrication of an on-site storage facility. As detailed in the Government's proposed findings, the costs that SMUD seeks to recover in this litigation are costs unrelated to the Government's breach, and would have been incurred regardless of the timing of the Government's performance. See DPFOF ¶¶ 19-126; see also Gov't Resp. to PFOF ¶¶ 199-241.2 II. Background. A. 6. Disposal Of Nuclear Waste And Passage Of The NWPA.

Nuclear reactors generate electricity by using ceramic pellets containing uranium

oxide placed in the core of the reactors; these solid pellets are sealed in metal rods, or pins, which are approximately sixteen feet long. Transcript ("Tr.") at 117-118 (Shetler). RESPONSE: The Government does not object to SMUD's proposed finding of fact. 7. The rods are bundled together into an overall fuel assembly. Id.

RESPONSE: The Government does not object to SMUD's proposed finding of fact. 8. The fuel assemblies are placed in the reactor vessel, where the nuclear fission

reaction occurs. In SMUD's case, the reactor was designed to hold 177 fuel assemblies. Tr. at 122 (Shetler). RESPONSE: The Government does not object to SMUD's proposed finding of fact.

"Gov't Resp. to PFOF" refers to the Government's response to SMUD's proposed findings of fact. 3

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9.

Spent nuclear fuel is nuclear power plant fuel that has been burned (irradiated) in

a nuclear reactor to the point where it no longer contributes efficiently to the nuclear chain reaction that produces heat to generate electricity. At that point, the SNF must be removed from the core and replaced. Tr. at 132 (Shetler). RESPONSE: Although the Government does not object to SMUD's proposed finding of fact, SMUD's reliance upon Mr. Shetler's testimony does not support the contention that spent nuclear fuel is nuclear power plant fuel that has been burned (irradiated) in a nuclear reaction to the point where it no longer contributes efficiently to the nuclear chain reaction that produces heat to generate electricity. Further, Mr. Shelter's testimony does not support the statement that SNF must be removed from the core and replaced once it no longer contributes efficiently to the nuclear chain reaction. 10. When SNF leaves a nuclear reactor, it is thermally hot and highly radioactive. Tr.

at 138 (Shetler). RESPONSE: The Government does not object to SMUD's proposed finding of fact. 11. Much of the thermal heat dissipates after about five years, but the SNF remains

potentially dangerous for much longer periods of time. Tr. at 147 (Shetler). RESPONSE: The Government objects to this proposed finding of fact because it is not supported by the evidence cited. Mr. Shetler's specific testimony on this issue was that "it will be thousands of years before it totally cools down. It will reach an equilibrium that is acceptable but it will be thousands of years before it cools down." Tr.147:6-9 (Shelter). Mr. Shelter never testified that "[m]uch of the thermal heat dissipates after about five years." 12. Once the fuel assemblies are permanently discharged from the reactor, they are

transferred to a spent fuel pools or "wet pool" on the nuclear reactor site. Tr. at 132-33 (Shetler). RESPONSE: The Government objects to SMUD's proposed finding of fact because it is not supported by the evidence cited. Mr. Shetler did not testify that the fuel assemblies are permanently discharged from the reactor to the spent fuel pool. 13. Spent fuel is stored in a pool in order to allow it to cool and to provide shielding

from the lethally radioactive fuel. Tr. at 138 (Shetler).

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RESPONSE: The Government does not object to SMUD's proposed finding of fact. 14. Spent fuel pools are pools of borated water. Tr. at 137-139 (Shetler).

RESPONSE: The Government does not object to SMUD's proposed finding of fact. 15. The SNF assemblies are stored in stainless steel storage racks underwater in the

spent fuel pools. Tr. at 137 (Shetler). RESPONSE: The Government does not object to SMUD's proposed finding of fact. However, Mr. Shetler did not state that the storage racks are made of stainless steel. 16. Once a spent fuel pool becomes full, the SNF must be moved from the pool and

placed into storage, either on site at the nuclear reactor or elsewhere. Tr. at 133 (Shetler). RESPONSE: The Government objects to SMUD's proposed finding of fact, which is not supported by the evidence cited. Mr. Shetler's testimony does not establish that, once a spent fuel pool becomes full, the SNF must be moved from the pool and placed into storage, either on site at the nuclear reactor or elsewhere. Indeed, because SMUD's spent fuel pool was not full, SMUD could have left its SNF in the pool. DPFOF ¶ 156. The evidence shows that SMUD chose to transfer its SNF from its wet pool to dry storage for business reasons. See DPFOF ¶¶ 19-64. 17. As of January 31, 1998, there was 37,000 metric tons of spent nuclear fuel that

had been permanently discharged from commercial nuclear power plants and was being stored at locations across the country. E. Supko Written Direct at 20 (PX 1002). RESPONSE: The Government does not object to SMUD's proposed finding of fact. 18. In the 1950s, under the authority of the Atomic Energy Act of 1954, as amended,

42 U.S.C. §§ 2011, et seq., and President Eisenhower's Atoms-for-Peace program, the federal government embarked upon a program to encourage and sponsor the peaceful use of atomic energy. Florida Power & Light Co. v. Westinghouse Elec. Corp., 826 F.2d 239, 244 (4th Cir. 1987). The development of a commercial nuclear electric industry was the centerpiece of this program. 5

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RESPONSE: The Government objects to SMUD's proposed finding of fact. The first sentence is dicta from a court of appeals decision excusing Westinghouse Electric Corporation from a breach of its contract with Florida Power & Light Company to reprocess Florida Power's SNF because performance was deemed impossible. Florida Power, 826 F.2d at 262-274. The second sentence is not supported by any evidence and is irrelevant to any issue in the abovecaptioned case. 19. One of the major issues surrounding public acceptance of nuclear power and the

willingness of the private sector to embrace nuclear power in the 1950s was the need to provide for the permanent disposal of SNF and other high-level waste ("HLW") discharged by the production of nuclear-generated electricity. S. Rep. No. 96-548, at 10 (1980), reprinted in 1980 U.S.C.C.A.N. 6933, 6933. RESPONSE: The Government objects to SMUD's proposed finding of fact as misleading. The Senate Report that SMUD cites is legislative history to the Low-Level Radioactive Waste Policy Act, Pub. L. No. 96-573 (1980), as it existed in 1980, not the Nuclear Waste Policy Act, Pub. L. No. 97-425 (1982). Thus, this proposed finding is misleading because SMUD is not citing to legislative history dealing with the law that gave rise to the standard contract, but to another statute altogether. Furthermore, the proposed finding is irrelevant to any issue in the above-captioned matter. 20. The disposal of SNF has been described as the "most pressing" concern in the

promotion and sustenance of this country's nuclear power industry. Id. at 10, reprinted in 1980 U.S.C.C.A.N. at 6933-34; Florida Power, 826 F.2d at 246 (stating that the government's assumption of the responsibility to dispose of SNF was "critical to the promotion of a nuclear power industry"). RESPONSE: The Government objects to SMUD's proposed finding of fact as misleading. The Senate Report being cited is legislative history to the Low-Level Radioactive Waste Policy Act, Pub. L. No. 96-573 (1980), as it existed in 1980, not the Nuclear Waste Policy Act, Pub. L. No. 97-425 (1982). Thus, this proposed finding is misleading because SMUD is not citing to legislative history addressing the law that gave rise to the standard contract, but to an altogether separate statute. Similarly, the statement from Florida Power is misleading because the Federal responsibility to which the court was referring was the responsibility to reprocess SNF in the event that there was no commercial service available. Florida Power, 826 F.2d at 246. Furthermore, the proposed finding is irrelevant to any issue in the above-captioned matter. 6

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21.

As part of its program to encourage the development of a nuclear power industry,

the federal government agreed early on to assume the responsibility for the permanent disposal of SNF. This commitment is reflected in the Atomic Energy Commission's ("AEC") statement of its "Policy Relating to the Siting of Fuel Processing Plants and Related Waste Management Facilities," adopted in 1970, which provides that "[d]isposal of high-level radioactive fission product waste material will not be permitted on any land other than that owned and controlled by the Federal Government." 10 C.F.R. Part 50, App. F. RESPONSE: The Government objects to SMUD's proposed finding of fact as misleading. 10 C.F.R., Part 50, App. F refers to an NRC regulation that governs the siting of facilities established to reprocess "high-level liquid radioactive wastes," defined as "aqueous wastes resulting from the operation of the first cycle solvent extraction system, or equivalent, and the concentrated wastes from subsequent extraction cycles, or equivalent, in a facility for reprocessing irradiated reactor fuels." 10 C.F.R., Part 50, App. F, ¶2. It does not establish the Government's responsibility for disposal of SNF and is, therefore, misleading. Because this regulation refers to high-level radioactive waste, as opposed to SNF, it is also irrelevant to any issue in the above-captioned matter. 22. In the 1960s and early 1970s, the general understanding was that the "fuel would

be stored onsite for an interim period until such time as it could be taken and reprocessed for reuse." Tr. at 116 (Shetler). RESPONSE: The Government objects to SMUD's proposed finding of fact because Mr. Shetler's testimony does not support the proposed finding. First, Mr. Shetler explained that he "can probably only speak for our general understanding of the nuclear steam supply provider with Babcock & Wilcox and my experience there." Tr.116:1-3 (Shetler). Consequently, Mr. Shetler lacks the foundation to discuss a more "general understanding." Second, Mr. Shetler was only asked about his understanding in the 1970s time frame, not the 1960s. Tr.115:22-25 (Shetler). Third, Mr. Shetler did not testify as to what SMUD's understanding was with respect to nuclear fuel management at the time it built its Rancho Seco nuclear power plant and, therefore, Mr. Shetler's testimony is irrelevant to any issue in the above-captioned matter. 23. In order to reprocess fuel, one "would cut up the assembly and through chemical

treatment, recover the uranium or plutonium that's in the fuel pellets and be able to re-pelletize

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that, repackage it and reuse it in nuclear assemblies." Id. RESPONSE: The Government objects to SMUD's proposed finding of fact. Although Mr. Shetler testified to that effect, it was based upon his understanding which, as noted in above, was limited. See Gov't Resp. to PFOF ¶ 22. 24. The government's effort to manage the disposal of SNF and HLW was redirected

when, in 1977, President Carter issued an executive order in 1977 that effectively halted reprocessing of spent nuclear fuel by private industry. 13 Weekly Comp. Pres. Doc. 502, 503 (1977); see also H.R. Rep. No. 97-785, pt. 1, at 46-47 (1982); see also Tr. at 119 (Shetler) ("In the 1970s during President Carter's administration, it was determined for primarily nuclear nonproliferation purposes that reprocessing would not be a method for dealing with spent fuel in the United States. And so reprocessing was basically stopped as an alternative."). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). Further, the House Report being cited, which was issued in 1982, does not support the proposed finding. Moreover, the report states that "[i]t has been clear for several years that neither adequate reprocessing capacity nor a repository was likely to be available in time to relieve the spent fuel storage problems of utilities." H.R. Rep. No. 97-785, at 47 (1982). The Government also objects because Mr. Shetler, who is a SMUD employee, cannot testify to the Government's efforts to manage the disposal of SNF or HLW. This proposed finding is also irrelevant, especially in light of the fact that President Reagan lifted the ban on commercial reprocessing in 1981. 17 Weekly Comp. Pres. Doc., 1101-02 (October 12, 1981). 25. Thus, at the time of Contract formation, and today, there are no alternative

methods of disposing of spent nuclear fuel for a commercial utility. 42 U.S.C. § 10222(b) ("No [SNF or HLW] may be disposed of by the Secretary ... unless the generator or owner of such [SNF or HLW] has entered into a contract with the Secretary under this section."); see also PFF ¶¶ 20-24, 32-40. RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. Furthermore, the proposed finding is misleading. Section 10222(b) of the Nuclear Waste Policy Act states: 8

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b) Advance contracting requirement (1)(A) The Commission shall not issue or renew a license to any person to use a utilization or production facility under the authority of section 2133 or 2134 of this title unless (I) such person has entered into a contract with the Secretary under this section; or (ii) the Secretary affirms in writing that such person is actively and in good faith negotiating with the Secretary for a contract under this section. (B) The Commission, as it deems necessary or appropriate, may require as a precondition to the issuance or renewal of a license under section 2133 or 2134 of this title that the applicant for such license shall have entered into an agreement with the Secretary for the disposal of high-level radioactive waste and spent nuclear fuel that may result from the use of such license. (2) Except as provided in paragraph (1), no spent nuclear fuel or high-level radioactive waste generated or owned by any person (other than a department of the United States referred to in section 101 or 102 of Title 5) may be disposed of by the Secretary in any repository constructed under this chapter unless the generator or owner of such spent fuel or waste has entered into a contract with the Secretary under this section by not later than-(A) June 30, 1983; or (B) the date on which such generator or owner commences generation of, or takes title to, such spent fuel or waste; whichever occurs later. 42 U.S.C. § 10222(b). The cited provision does not support the proposed finding because the statute does not state that there are no alternative methods of disposing of SNF. Rather, the cited statute constrains DOE from disposing of any commercial SNF unless that SNF is covered by a Standard Contract. Moreover, the statute does not indicate whether there are any alternative methods for disposing of commercial SNF.

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26.

The majority of spent fuel pools existing at nuclear reactor sites were sized with

the intention that SNF would be stored therein temporarily before being shipped to a reprocessing facility. H.R. Rep. No. 97-785, pt. 1, at 47. RESPONSE: Although the cited report does state that storage pools at the nuclear power plants in the mid-1960's and 1970's were designed to hold only several years of spent fuel discharge, it also notes that, despite that fact, no reactor had yet shut down due to the lack of storage space because utilities had expanded their storage capacity. H.R. Rep. No. 97-785, pt. 1, at 47 (1982). Moreover, the report states that "[i]t has been clear for several years that neither adequate reprocessing capacity nor a repository was likely to be available in time to relieve the spent fuel storage problems of utilities." H.R. Rep. No. 97-785, at 47 (1982). 27. The lack of a reprocessing alternative meant that the SNF eventually would have

to be removed from the pool and stored in a safe and secure location. Id. RESPONSE: The Government objects to SMUD's proposed finding of fact. First, the document cited does not state that the lack of a reprocessing alternative necessitated that SNF would eventually have to be removed from spent fuel pools and stored in a secure location. To the contrary, the House Report notes that "[i]t has been clear for several years that neither adequate reprocessing capacity nor a repository was likely to be available in time to relieve the spent fuel storage problems of utilities." H.R. Rep. No. 97-785, at 47 (1982). It was also noted that, when DOE offered to develop alternative technologies to store SNF in modular or mobile storage casks at the site of the reactor, no utility was interested in discussing the possibility. Id. Second, the lack of a reprocessing alternative does not necessarily require that the SNF be removed from the pool nor does it eliminate the need for SNF disposal. Indeed, it is unrefuted that SMUD could have left its SNF in its wet pool, but decided, for business reasons unrelated to the Government's delay in SNF acceptance, to place its SNF in dry storage. DPFOF ¶¶ 19-64, 155. Finally, reprocessing results in the creation of high-level waste which also requires permanent isolation. 28. This SNF storage crisis was one of the primary catalysts for the promulgation of

the Nuclear Waste Policy Act. As Representative Bereuter stated, "[w]aste storage cannot continue in the temporary, unsafe fashion that it has maintained for these decades. We are just courting disaster if we continue to take that course." 128 Cong. Rec. 27,775 (1982). RESPONSE: This proposed finding is not a finding of fact, but a conclusion of law. Furthermore, to the degree that SMUD is suggesting the views of any congressman is relevant to interpreting a statute, the statements of a legislator are not suggestive of the legislation's intent, 10

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which is memorialized in the language of the statute. Barnhart v Sigmon Coal Co,. Inc., 534 U.S. 438, 456-57 (2002). Finally, this proposed finding is irrelevant to any issue in the abovecaptioned matter. 29. Representative Moorhead explained that Congress needed to address not only

long-term permanent disposal of SNF but also the short-term problem of storage of SNF and/or HLW: It is clear that comprehensive nuclear waste disposal must provide not only for the long-term problem of permanent disposal of nuclear waste, but it also must alleviate the short-term problem of a lack of interim storage capacity for spent nuclear fuel. A June 1982 Report, prepared for the Nuclear Regulatory Commission, projects that as many as 39 nuclear power plants in 19 States may run out of onsite storage capacity by 1990. This would inevitably result in plant shutdowns, and clearly this would be a disaster that must be prevented. 128 Cong. Rec. 26,314 (1982). RESPONSE: This proposed finding is not a finding of fact, but a conclusion of law. Furthermore, to the degree that SMUD is suggesting the views of a congressman is relevant to interpreting a statute, the statements of a legislator are not suggestive of the legislation's intent, which is memorialized in the language of the statute. Barnhart v Sigmon Coal Co,. Inc., 534 U.S. 438, 456-57 (2002). Finally, this proposed finding is irrelevant to any issue in the abovecaptioned matter. 30. Senators reiterated this concern when debating the Nuclear Waste Policy Act.

For example, Senator McClure, the chief sponsor of the NWPA in the Senate, stated [We] . . . begin to run into the problem that there is not enough room to store all those rods at that site, in the pools that have been constructed, because they were not designed to do that . . . They will have to apply some new technologies on that site, or they will have to shut down because they cannot refuel. There is a time urgency, and it can be satisfied. 128 Cong. Rec. 7,974 (1982). RESPONSE: This proposed finding is not a finding of fact, but a conclusion of law. Furthermore, to the degree that SMUD is suggesting the views of any senator is relevant to 11

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interpreting a statute, the statements of a legislator are not suggestive of the legislation's intent, which is memorialized in the language of the statute. Barnhart v Sigmon Coal Co,. Inc., 534 U.S. 438, 456-57 (2002). Finally, this proposed finding is irrelevant to any issue in the abovecaptioned matter. 31. On January 7, 1983, after being signed by President Reagan, the Nuclear Waste

Policy Act of 1982 ("NWPA"), Pub. L. 97-245, 96 Stat. 2201 (codified at 42 U.S.C. §§ 1010110270 (1982)) was enacted. RESPONSE: The Government does not object to SMUD's proposed finding of fact. 32. In enacting the NWPA, the federal government assumed the legal duty to

"provide for the permanent disposal" of spent nuclear fuel and/or high-level radioactive waste from utilities across the country by providing long-term storage of such waste. See 42 U.S.C. § 1013(a)(4). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. Further, the cited section is not part of the Nuclear Waste Policy Act. Section 10103(a)(4) actually provides that: while the Federal Government has the responsibility to provide for the permanent disposal of high-level radioactive waste and such spent nuclear fuel as may be disposed of in order to protect the public health and safety and the environment, the costs of such disposal should be the responsibility of the generators and owners of such waste and spent fuel. 42 U.S.C. § 10103(a)(4) (emphasis added). Thus, the statute actually provides that the Government has the "responsibility" to provide for the permanent disposal although "the costs of such disposal should be the responsibility of the generators and owners of such waste . . . ." 42 U.S.C. § 10103(a)(4). Therefore, to the degree that this may be a proposed finding of fact, it is misleading. To the degree that SMUD accurately quotes part of the Nuclear Waste Policy Act, the Court is free to take judicial notice of its contents. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). 33. In the NWPA, Congress expressly acknowledged that "[a] national problem has

been created by the accumulation of . . . spent nuclear fuel from nuclear reactors." 42 U.S.C.

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§ 10131(a)(2). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. Moreover, 42 U.S.C. § 10103(a)(4) actually provides that: a national problem has been created by the accumulation of (A) spent nuclear fuel from nuclear reactors; and (B) radioactive waste from (i) reprocessing of spent nuclear fuel; (ii) activities related to medical research, diagnosis, and treatment; and (iii) other sources. 42 U.S.C. § 10131(a)(2). Thus, the "national problem" was created for several reason and, to the degree that this may be a proposed finding of fact, it is misleading. To the degree that this proposed finding merely quotes the Nuclear Waste Policy Act, the Court may take judicial notice of its contents. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). 34. The NWPA provided for the safe, permanent disposal of the wastes of nuclear

power generation by the federal government, an obligation which the federal government had recognized since the passage of the Atomic Energy Act of 1954. See Corrected Appendix to Accompany SMUD's Motion to File Designated Deposition And Trial Testimony, dated February 24, 2005 (hereinafter "Designations Appendix") (Dckt. #310) at 1709 (Lawrence), 2039-40 (Rusche); Robert Morgan, Remarks Before the International Atomic Energy Agency, at 3 (October 12, 1983), (PX 52); 128 Cong. Rec. 26,317 (1982) (Representative Skeen); 128 Cong. Rec. 8,002 (1982) (Senator McClure); see also 42 U.S.C. § 7133(a)(8)(C) (providing for the creation of the Department of Energy with responsibility for "the establishment of temporary and permanent facilities for storage, management, and ultimate disposal of nuclear wastes").

RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). Further, it should be noted that Dr. Morgan also stated that the Nuclear Waste Policy Act "clearly states that utilities have the responsibility for interim storage of their spent fuel." PX 52 at 919. To the extent that SMUD is suggesting the views of any Congressman is relevant to interpreting a statute, the statements of a legislator are not suggestive of the legislation's intent, which is memorialized in the language of the statute. Barnhart v 13

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Sigmon Coal Co,. Inc., 534 U.S. 438, 456-57 (2002). To the degree that this proposed finding merely quotes the Nuclear Waste Policy Act, the Court is free to take judicial notice of its contents. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). 35. One of the key purposes of the NWPA was to impose upon the government a firm

schedule and deadline by which the government would assume responsibility for the disposal of commercially-generated SNF. See 42 U.S.C. § 10131(b)(1) (indicating that one purpose of the NWPA was "to establish a schedule for the siting, construction, and operation of repositories" to receive SNF and high-level waste). RESPONSE: The Government disputes this proposed finding which is a conclusion of law, not a finding of fact. Furthermore, nowhere, particularly not in the cited passage, does the statute impose a "firm schedule" or a "deadline" by which the Government would assume responsibility for the SNF. Section 10131(b)(1) actually states that one of the purposes of the law was: to establish a schedule for the siting, construction, and operation of repositories that will provide a reasonable assurance that the public and the environment will be adequately protected from the hazards posed by high-level radioactive waste and such spent nuclear fuel as may be disposed of in a repository 42 U.S.C. § 10131(b)(1). Thus, although the statute provides that DOE was to establish a schedule for the siting, construction, and operation of repositories, it does not require that the Government accept any particular amount of any utility's SNF by any particular date. See DPFOF ¶¶ 4-7, 113-126. Moreover, to the degree that this proposed finding merely quotes the Nuclear Waste Policy Act, the Court is free to take judicial notice of its contents. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). 36. Congress intended that DOE's acceptance of SNF, beginning in 1998, would be

expeditious and timely. See 42 U.S.C. § 10222(a)(5) (mandating that contracts provide that DOE "shall take title to the high-level radioactive waste or spent nuclear fuel involved as expeditiously as practicable upon the request of the generator or owner of such waste or spent fuel") (emphasis added). RESPONSE: The Government objects to SMUD's proposed finding, which is a 14

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conclusion of law, not a finding of fact. Moreover, section 10222(a)(5) actually states: Contracts entered into under this section shall provide that ­ (A) following commencement of operation of a repository, the Secretary shall take title to the high-level radioactive waste or spent nuclear fuel involved as expeditiously as practicable upon the request of the generator or owner of such waste or spent fuel; and (B) in return for the payment of fees established by this section, the Secretary, beginning not later than January 31, 1998, will dispose of the high-level radioactive waste or spent nuclear fuel involved as provided in this subtitle. 42 U.S.C. § 10222(a)(5). Specifically, the statute provides that, once a repository is operational, DOE shall take title to SNF "as expeditiously as practicable." The statute separately provides that, in exchange for the payment of fees, DOE will begin to dispose of SNF ­ either at a repository or in another facility ­ by January 31, 1998. Id. The statute does not require that DOE have an operational repository by January 31, 1998, given that the obligation to take title to SNF "as expeditiously as practicable" after a repository is operational is separate and distinct from the obligation to begin SNF acceptance by January 31, 1998. See Indiana Michigan Power Co. v. Department of Energy, 88 F.3d 1272, 1276 (D.C. Cir. 1996). Thus, SMUD is attempting to merge the requirements of subparagraphs (a)(5)(A) and (a)(5)(B) of 42 U.S.C. § 10222 to create an obligation that does not exist. The Court has no basis upon which to rewrite the statute to create obligations that otherwise are not contained within it. See, e.g., CUNA Mutual Life Ins. Co. v. United States, 169 F.3d 737, 742 (Fed. Cir. 1997) (court "cannot rewrite the statute to accomplish what we might believe Congress may have intended to do"); Newport News Shipbuilding & Dry Dock Co. v. Garrett, 6 F.3d 1547, 1558 (Fed. Cir. 1993) ("court is empowered to rewrite neither statutes nor regulations, however unwise, nor does it have the information base nor expertise to do so effectively"). The NWPA did not identify any other requirements for the contracts specified by 42 U.S.C. § 10222(a)(5). 37. DOE officials recognized that the requirements for its spent fuel program were to

implement a program that would: (1) avoid the need for utilities such as SMUD to build additional SNF storage space at their reactor sites after 1998, and (2) accept SNF at a rate that would reduce the existing SNF backlog to allow timely decommissioning. Designations Appendix (Dckt. #310) at 137 (Barrett), 452-53 (Milner), 2084 (Rusche); see also E. Supko Written Direct at 16-20, 39-43 (PX 1002); Indiana Michigan v. United States, 57 Fed. Cl. 88, 89 15

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(2003); Commonwealth Edison v. United States, 56 Fed. Cl. 652, 657 (2003); Tennessee Valley Authority v. United States, 60 Fed. Cl. 665, 674 n.10: Yankee Atomic Electric Co. v. United States, No. 98-126, 2004 WL 1535688, *7 (Fed. Cl. June 28, 2004). RESPONSE: This proposed finding is not a finding of fact, but a conclusion of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). Moreover, the proposed finding is misleading. Mr. Barrett and Mr. Milner testified that one of the program's goals was to remove SNF, thereby reducing the need for onsite SNF storage and allowing utilities to timely decommission. Mr. Rusche testified that another program's goal was for the DOE to eventually accept commercial SNF at a rate that exceeded the discharge rate. Thus, Mr. Barrett, Mr. Milner, and Mr. Rusche all were speaking to program goals, not requirements. Indeed, Robert Morgan, the former director of the Office of Civilian Radioactive Waste Management, has unequivocally stated that the two alleged goals referenced in SMUD's proposed finding of fact were not contractual obligations, and that even under a 3,000 MTU steady-state rate of acceptance, some utilities would still have to add additional at-reactor storage after 1998. DPFOF ¶¶ 132-133. Finally, Ms. Supko, as a SMUD expert, cannot speak for the Government and what the Government viewed as its requirements or obligations. 38. Robert Morgan, the first Director of the Office of Civilian Radioactive Waste

Management ("OCRWM"), indicated the government's intent of was that "beginning in 1998 utilities will not have to provide any additional storage facilities on site." Designations Appendix (Dckt. #310) at 1980 (Morgan). RESPONSE: The Government objects to SMUD's proposed finding of fact. In the testimony SMUD cites from Mr. Morgan, Mr. Morgan was testifying about his personal impression of the "intent " of the Nuclear Waste Policy Act based upon his conversations with Congressional "staffers." Thus, Mr. Morgan was actually speaking to an issue of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). Further, Mr. Morgan has unequivocally stated that DOE did not have a contractual obligation to accept SNF at a particular rate, and that DOE was not contractually obligated to accept SNF at a rate that, "beginning in 1998 utilities will not have to provide any additional storage facilities on site." DPFOF ¶¶ 132-133. Indeed, Mr. Morgan explained that, even under a 3,000 MTU steady-state rate, some utilities would still have to add additional at-reactor storage after 1998. DPFOF ¶ 133. 39. Representative Mariott stated: We need a national waste repository, and it must be in place by the 16

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turn of the century. All waste that is now stored is temporarily stored. . . . Without a proper repository for interim and permanent waste, as many as 28 nuclear power plants may be forced to close for lack of storage. 128 Cong. Rec. 26,310-26,311 (1982). RESPONSE: This proposed finding is not a finding of fact, but a conclusion of law. Furthermore, to the extent that SMUD is suggesting the views of any congressman is relevant to interpreting a statute, the statements of a legislator are not suggestive of the legislation's intent, which is memorialized in the language of the statute. Barnhart v Sigmon Coal Co,. Inc., 534 U.S. 438, 456-57 (2002). Thus, this proposed finding is irrelevant to any issue in the abovecaptioned matter. 40. The NWPA set January 31, 1998 as the date for DOE to begin spent nuclear fuel

removal and required DOE and the owners and generators of SNF and HLW to enter into contracts calling for DOE to dispose of waste beginning on that date. 42 U.S.C. § 10222(a) (1982); see also id. § 10222(b) ("No [SNF or HLW] may be disposed of by the Secretary ... unless the generator or owner of such [SNF or HLW] has entered into a contract with the Secretary under this section."). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. Defendant further responds to the plaintiff's assertion of law by asserting that, contrary to SMUD's assertion, the NWPA does not require DOE to enter into contracts calling for DOE to dispose of waste beginning on January 31, 1998. Rather, as the NWPA recites, "[i]n the performance of his functions under this chapter, the Secretary [of Energy] is authorized to enter into contracts with any person who generates or holds title to high-level radioactive waste, or spent nuclear fuel . . . ." 42 U.S.C. § 10222(a)(1) (emphasis added). 41. Pursuant to the NWPA, DOE established a Standard Contract for Disposal of

Spent Nuclear Fuel and/or High-Level Radioactive Waste. See Final Rule, 48 Fed. Reg. 16,590 (Apr. 18, 1983); 10 C.F.R. § 961.11. RESPONSE: The Government does not object to SMUD's proposed finding of fact. 42. The Standard Contract provides that "[t]he services to be provided by DOE under 17

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this contract shall begin, after commencement of facility operations, not later than January 31, 1998 and shall continue until such time as all SNF and/or HLW from the civilian nuclear power reactors . . . has been disposed of." Contract Art. II (PX 44). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. The Government responds to SMUD's conclusion of law by asserting that the Government does not dispute that SMUD has properly represented the provision of the Standard Contract to which it cites in the proposed finding. However, rather than identify a "fact" that should be the subject of the Court's determination, this proposed finding merely quotes the Standard Contract, of which the Court may take judicial notice. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). SMUD's proposed finding also fails to explain that the Standard Contract contained a contractual mechanism by which DOE and the utilities would determine the rate and schedule of acceptance for SNF and/or HLW beginning January 31, 1998. See DPFOF ¶¶ 113-137. The Standard Contract's schedule terms seek to obtain the agreement of the parties to a specific schedule for the acceptance of an individual contract holder's SNF and HLW. Pursuant to the terms of the Standard Contract, DOE was to issue, beginning not later than July 1, 1987, "an annual capacity report [("ACR")] for planning purposes," identifying "projected annual receiving capacity" at any DOE facilities and annual acceptance ranking for acceptance of contract holders' SNF and/or HLW for the first 10 years "following the projected commencement of operation of the initial DOE facility." 10 C.F.R. § 961.11, Art. IV.B.5(b). Subsequently, beginning on April 1, 1991, DOE was to issue "an annual acceptance priority ranking" ("APR") for receipt of the contract holders' SNF, "based on the age of SNF and/or HLW as calculated from [its] date of discharge." Id., Art. IV.B.5(a). The contract holder, "[a]fter DOE has issued its proposed acceptance priority ranking" on April 1, 1991, and no earlier than January 1, 1992, would submit a delivery commitment schedule ("DCS") identifying "all SNF and/or HLW the [contract holder] wishes to deliver to DOE beginning sixty-three (63) months thereafter," for DOE's approval or disapproval. 10 C.F.R. § 961.11, Art. V.B.1. If DOE approved the DCS, the parties had effectively agreed and defined the amount of SNF that DOE would accept from that contract holder 63 months later. Id. If DOE disapproved the first DCS submission, the contract holder was entitled to make a second DCS submission, again for DOE's approval or disapproval. Id. 43. The NWPA contemplated a series of steps which would lead to the operation of a

repository and acceptance of SNF and HLW beginning in January 1998. 42 U.S.C. §§ 1013210145; H.R. Rep. 97-785, pt. 1, at 32-34 (1982); Indiana Michigan Power Company v. Dep't of 18

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Energy, 88 F.3d 1272, 1277 (D.C. Cir. 1996). a. DOE was to issue guidelines for site characterization 180 days after

January 7, 1983. 42 U.S.C. § 10132(a) (1982). DOE was then to nominate five sites for site characterization for selection as the site for the first repository. 42 U.S.C. § 10132(b)(1)(A) (1982). b. DOE was to recommend site characterization at three of the nominated

sites by January 1, 1985. 42 U.S.C. § 10132(b)(1)(B) (1982). Upon approval of these site recommendations by the President, DOE was to conduct site characterization at the approved sites. 42 U.S.C. § 10133 (1982). c. By March 31, 1987 the President was to submit a recommendation to

Congress to site the first repository at one of the three characterized sites. 42 U.S.C. § 10134(a)(2)(A) (1982) (now amended). d. After the President's recommendation, the state or Indian tribe where the

recommended site was located had the opportunity to disapprove the selection, and Congress could then override that disapproval. 42 U.S.C. §§ 10134-10136 (1982) (now amended). e. After the site recommendation was complete, DOE was to submit an

application for construction authorization to the NRC within 90 days. 42 U.S.C. § 10134(b) (1982). The NRC would then act on the application within four years of submission. 42 U.S.C. § 10134(d) (1982). RESPONSE: The Government objects, in part, to SMUD's proposed finding of fact. The NWPA specifically contemplated the potential implementation of a monitored retrievable storage ("MRS") facility as part of the civilian radioactive waste management program. 42. U.S.C. § 10161; Tr.2112:16-2114:5 (Kouts). The NWPA including provisions allowing the 19

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Secretary to study the possibility of creating MRS facilities, with Congress finding that "longterm storage of high-level radioactive waste or spent nuclear fuel in [MRS] facilities is an option for providing safe and reliable management of such waste or spent fuel." 42 U.S.C. 10161(a)(1) (1982). The NWPA did not contemplate or create any obligation that acceptance of SNF and/or HLW would begin from every nuclear utility beginning in 1998. See DPFOF ¶¶ 113-135. The proposed finding of fact is inappropriate because it is a conclusion of law. Further, the proposed conclusion of law is irrelevant to the claim for damages here because the statutory deadlines identified in subparts (a)-(e) were not incorporated into the Standard Contract, and plaintiff has no right to rely upon non-contractual statutory deadlines. See Fenn v. United States, 908 F.2d 955, 959 (Fed. Cir. 1990) ("the law itself, as a rule of conduct, may be changed at the whim of the legislature, unless prevented by constitutional limitations."). 44. These provisions were intended to create a schedule leading to the establishment

of a repository in 1998. A House report on an early version of the NWPA containing similar interim deadlines noted: "With respect to the establishment of a repository, the purposes are to establish a schedule for the siting, construction, and operation of repositories that will provide assurance that the public and the environment will be adequately protected from the hazards posed by high-level radioactive wastes." H.R. Rep. 97-785, pt. 1, at 32 (1982). RESPONSE: The Government objects to SMUD's proposed finding of fact. This proposed finding regarding the "intention" of the NWPA provisions cited in PFOF ¶ 43 is not a proposed finding of fact, but a conclusion of law. See, e.g., Berry, 25 F.3d at 1353. See also Gov't Response to PFOF ¶ 43. The NWPA is the best evidence of its contents. Although individuals may have hoped that a repository could be operational by January 31, 1998, the statute did not create any obligation to have a repository available by that date. Accordingly, the statute did not create the "intent" that the proposed conclusion of law infers. As many utility plaintiffs successfully argued to the United States Court of Appeals for the District of Columbia Circuit in prior litigation, DOE's obligation to accept SNF and/or HLW beginning no later than January 31, 1998, was independent of the existence of a repository, and the NWPA did not require that a repository be operational by January 31, 1998. See Indiana Michigan, 88 F.3d at 1276. Finally, the House report cited by SMUD, on a bill that was never enacted, is not probative of the issues involved in this case. Holder v. Hall, 512 U.S. 874, 932 n.28 (1994) (Thomas, J., concurring in judgment); Conroy v. Aniskoff, 507 U.S. 511, 520 n.2 (1993) (Scalia, J., concurring in judgment). 45. The NWPA provided that "the Secretary is authorized to enter into contracts with

any person who generates or holds title to high-level radioactive waste, or spent nuclear fuel, of 20

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domestic origin for the acceptance of title, subsequent transportation, and disposal of such waste or spent fuel." 42 U.S.C. § 10222(a)(1). RESPONSE: The Government does not object to SMUD's proposed finding of fact to the extent that SMUD has properly represented the provision of the NWPA to which it cites in this proposed finding. However, rather than identify a "fact" that should be the subject of the Court's determination, this proposed finding merely quotes the NWPA, of which the Court may take judicial notice. Cf. United States v. Casson, 434 F.2d 415, 417-18 (D.C. Cir. 1970). 46. The NWPA further required all utilities to enter into the Contract by providing

that the execution of a contract with DOE is a prerequisite to the issuance or renewal of a nuclear power plant license by the Nuclear Regulatory Commission ("NRC"). 42 U.S.C. § 10222(b)(1)(A). RESPONSE: The Government objects to SMUD's proposed finding of fact. The NWPA did not contain a requirement that the nuclear utilities enter into the Standard Contract. See 42 U.S.C. § 10222 (1982). The language cited summarizes the provision that the NRC "shall not issue or renew a license" unless the utility entered into a contract or was actively and in good faith negotiating such a contract. 42 U.S.C. § 10222(b)(1)(a)(i),(ii). 47. Congress expected the contracts to be a quid pro quo under which DOE would

dispose of waste and the utilities would pay for the service. H.R. Rep. No. 97-491, pt. 1, at 58 (1982), reprinted in 1982 U.S.C.C.A.N. at 3824 ("Section 124 authorizes the Secretary to contract with utilities ... to provide repository services in exchange for payments. . . ."); H.R. Rep. No. 97-491, pt. 1, at 59 (1982), reprinted in 1982 U.S.C.C.A.N. 3825 (DOE is "responsible for disposing of [SNF] ... in permanent disposal facilities, beginning not later than January 1998, in return for the payment of fees established by this section." (emphasis supplied)). See also Indiana Michigan Power Company v. Dep't of Energy, 88 F.3d 1272, 1276 (D.C. Cir. 1996); Alabama Power Co. v. Dep't of Energy, 307 F.3d 1300, 1302 (11th Cir. 2002). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). The Government 21

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objects to this proposed finding of fact to the extent that it is a conclusion of law. The Government does not dispute that the United States Court of Appeals for the Federal Circuit has held that DOE partially breached the Standard Contract by failing to commence acceptance of SNF, under the acceptance terms set forth in that contract, beginning on January 31, 1998. See Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1342 (Fed. Cir. 2000). 48. Having required utilities to pay fees into the Nuclear Waste Fund for removal of

SNF starting in January of 1998, DOE did not intend that the utilities would have to pay again to build additional on-site storage. Designations Appendix (Dckt. #310) at 276-78 (Barrett). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994) Defendant further responds to the plaintiff's assertion of law by asserting that it disputes the proposed finding because it is unsupported by the evidence cited and contrary to the evidence presented at trial. The "full cost recovery nature" of the Standard Contract requires that the utilities pay for all the costs of the program through the fees collected on electricity generated. 42 U.S.C. § 10222. Program costs do not include utility storage costs. See Dep. Desig. 5/8/02 Milner, 267:11-16 ("full cost recovery only refers to DOE expenditures. Full-cost recovery doesn't consider utility costs."). Some utilities would have required additional on-site storage even if DOE had begun accepting SNF at an annual steady-state acceptance rate of 3,000 MTU. DPFOF ¶ 133. Mr. Morgan explained that the discussion in the Mission Plan concerning DOE's intent to accept SNF at a rate that precluded additional at-reactor storage did not reflect contractual intent, and that, even under a 3,000 MTU rate of acceptance, some utilities still would have to have added additional at-reactor storage. DPFOF ¶¶ 132-133. Ms. Supko, SMUD's expert witness, acknowledged that neither the NWPA nor the Standard Contract contains reference to the two "primary requirements" that SMUD has relied upon in this case, namely, that the rate: (1) would eliminate the need for utilities to provide additional on-site storage after January 31, 1998, and (2) would work off the backlog of SNF and/or HLW already stored by utilities up until that date. DPFOF ¶ 128. 49. In 1983, the parties anticipated and intended that if a repository was not

operational in time for DOE to begin acceptance of SNF by January 31, 1998, DOE would take title to the fuel at the utility site and pay for its dry storage. See Memorandum Accompanying Draft Mission Plan Strategy at 2 (Sept. 15, 1983) (PX 50) (noting "the lack of existence of particular type facilities will not delay or postpone the acceptance of spent fuel" and stating one 22

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possibility in the event of non-performance would be for DOE to "take title to the spent fuel, have it placed in dry storage casks and pay a rental fee to the utility to store the casks on-site at the reactor"). RESPONSE: This proposed finding is not a proposed finding of fact, but a conclusion of law about which testimony is inadmissible. See, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). Defendant further responds to the plaintiff's assertion of law by asserting that the parties' "intent" is defined by reference to the language of the contract itself, not to extraneous materials, particularly in light of the integration clause contained in the Standard Contract. DX 88, Art. XXII.A. Yet, in its proposed finding, plaintiff does not refer to any contract language, precluding a finding of contractual intent. Further, as we noted above, DOE's statutory obligation to accept SNF and/or HLW beginning no later than January 31, 1998, was independent of the existence of a facility in which to dispose of it. Cf. Indiana Michigan, 88 F.3d at 1276. Moreover, the document cited by SMUD for this portion of the proposed finding is a draft of a strategy memorandum that was intended to guide drafters of the 1983 Draft Mission Plan. DPFOF ¶¶ 132-134. The Mission Plan, its drafts, and its amendments are not contractually binding documents. Id. Instead, the Mission Plan was "to provide the informational basis sufficient to permit informed decisions to be made in carrying out the repository program and the research, development, and demonstration programs required under [the NWPA]." 42 U.S.C. § 10221(a). Ultimately, the Mission Plan was to be submitted to Congress so that Congress could review and make decisions regarding the progress and scope of the program. See 42 U.S.C. § 10221(b)(3). Further, it is inappropriate for SMUD to rely upon a draft document promulgated after the parties signed the Standard Contract as a means of evincing the parties' intent. The Government specifically disputes the portion of this proposed finding which asserts that, in 1983, the parties anticipated that, if DOE had no disposal facility available in 1998, DOE would "take title to fuel at the utility and pay for its dry storage." That assertion by SMUD is completely without citation to authority, is not supported by any evidence admitted at trial, and should be rejected by the Court. Indeed, SMUD did not present a single witness at trial who worked at SMUD in 1983, and who could testify as to SMUD's intent at the time it signed the Standard Contract. 50. DOE assured utilities that it would take responsibility for "additional storage" if

the repository was delayed, even if that meant providing for storage "at reactor sites." PX 69, Vol. II at 9-6. RESPONSE: The Government objects to SMUD's proposed finding of fact. The 23

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proposed finding relies solely upon PX 69, a 1984 document titled Draft Mission Plan for the Civilian Radioactive Waste Management Program, Volume II: Information Required by Nuclear Waste Policy Act of 1982. Moreover, the document cited by SMUD for this portion of the proposed finding is a draft Mission Plan. The Mission Plan, its drafts, and its amendments are not contractually binding documents. DPFOF ¶¶ 133-135. Instead, the Mission Plan was intended "to provide the informational basis sufficient to permit informed decisions to be made in carrying out the repository program and the research, development, and demonstration programs required under [the NWPA]." 42 U.S.C. § 10221(a). Ultimately, DOE was to submit the Mission Plan to Congress so that Congress could review and make decisions regarding the progress and scope of the program. See 42 U.S.C. § 10221(b)(3). SMUD fails to provide any other citation to support this proposed finding, and such an "assurance" is not set forth in the NWPA or the Standard Contract. This assertion by SMUD is not supported by any evidence admitted at trial, and should be rejected by the Court. 51. DOE official Keith Klein testified that at the time the Contract was signed, DOE's

plans in the event of delay in repository were that DOE "would take title or--or potentially at the reactor sites and provide dry storage casks. I think we were thinking ideally transportable dry storage casks or--or at least baskets that could be put into a transport cask." Designations Appendix (Dckt. #310) at 1137-38 (Klein). RESPONSE: The Government objects to SMUD's proposed finding of fact. SMUD failed to cite to any contractual language purporting to create the contractual obligation that it identified. This assertion by SMUD is not supported by any evidence admitted at trial, and should be rejected by the Court. See Gov't Resp. To PFOF ¶ 50. Further, DOE is precluded as a matter of law from taking title to utility SNF at the reactor sites. Section 135 of the NWPA authorized DOE to accept a limited amount (no more than 1,900 MTUs) of commercial spent fuel for a limited period (until January 1, 1990) for storage either at a Federal facility or at a civilian nuclear power plant. It also provided that use of an existing Federal facility would not "render such facility subject to licensing under the Atomic Energy Act of 1954 . . . or the Energy Reorganization Act of 1974 . . ." 42 U.S.C. § 10155(a)(1)(A)(i). These provisions clearly would not have been necessary if DOE already possessed the authority to store the utilities' SNF and was exempt from NRC licensing. Simply put, SMUD presented no evidence and has offered no legal basis for the proposition that DOE could have taken title to a particular utility's SNF if there were delays in the development of a Federal disposal facility. 52. The Contract allows DOE to grant "priority" to shutdown reactors. Contract Art.

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VI.B.1.b. RESPONSE: The Government objects to SMUD's proposed finding of fact. The Standard Contract has language allowing DOE the discretion to accord priority for SNF and/or HLW from reactors that have been shutdown. Article VI.B.1 of the Standard Contract provides DOE with the discretion, not the obligation, to provide a contract holder with a shutdown reactor priority in the SNF acceptance queue: Notwithstanding the age of the SNF and/or HLW, priority may be accorded any SNF and/or HLW removed from a civilian nuclear power reactor that has reached the end of its useful life or has been shut down permanently for whatever reason. DX 88, Art. VI.B.1.b (emphasis added), Def. Counter-Designation of R. Milner, at Tr.137:2-8 (5/8/02) (explaining that priority for shutdown reactor provision provided DOE with discretion to grant priority, but did not require DOE to grant priority). SMUD recognized that DOE is entitled to exercise its discretion in granting priority for shutdown reactors. See DPFOF ¶¶ 138144. A large number of utilities have been opposed to priority for shutdown reactors, DX 215; PX 849, and DOE's contracting officer for the Standard Contract, Mr. Zabransky, explained at trial the reason for such opposition: [Priority for shutdown reactors] was being raised because, under the contract, DOE was permitted to grant priority to shutdown reactors, and amongst the utilities, there was a lot of discussion and concern about that because, for operating reactors, there was a concern that the only way for DOE to grant priority to the shutdown reactors was to short the operating reactors, since there's a finite amount of capacity and that since the contract also contained provisions that allowed utilities to exchange places in line with DOE approval, that if DOE started allocating capacity to shutdown reactors, that would render that part of the process not meaningful. So the shutdown, the operating reactors had an opinion, the shutdown reactors had an opinion that differed from them, and it was an issue that the group thought about. Tr.1625:12-1626:3 (Zabransky); Def. Counter-Designation of R. Milner, at Tr.73:15-24 (5/8/02) (explaining that outcome of discussions between DOE and members of the industry was that oldest fuel first priority should be utilized instead of priority for shutdown reactors); Def. Counter-Designation of R. Milner, at Tr.206:10-13, Tr.208:16-19 (5/8/02) ("Well, I think that the view held by a large number of utilities were that any priority afforded a shutdown reactor 25

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would aversely affect them," and this was true regardless of what the rate of acceptance was); Def. Counter-Designation of N. Slater, at Tr.55:6-12 (4/21/99) (explaining that "[t]o afford priority to a shutdown reactor was to impede the ability of another utility to deliver. And the group was very divided in terms of whether a shutdown priority should be provided."); Def. Counter-Designation of L. Barrett, at Tr.364:11-19 (5/15/02) (explaining that granting priority to a shutdown reactor would necessarily result in schedule impact to other utilities). In May 1990 ­ eight years before the Government was obligated to begin the acceptance of SNF on an industry-wide basis ­ the Edison Electric Institute ("EEI"), a nuclear industry organization, expressed its disagreement with SMUD's view regarding the use of the priority provision. DX 1366. In a May 30, 1990 letter to the EEI/UWASTE steering committee, Steven Kraft, the director of Nuclear Waste and Transportation Activities for EEI stated: On March 30, the General Manager of the Sacramento Municipal Utility District wrote to Secretary Watkins. Since Rancho Seco has been shut down, SMUD has been investigating possible ways to reduce their expenditures and operations at the site. They are currently considering placing the fuel in dual purpose casks, and they are interested in DOE cooperation in a demonstration project. SMUD has also been working with their Representatives in Congress to obtain direction from DOE to carry out such a project. EEI/UWASTE is very concerned about these efforts to gain special treatment for one reactor, and to provide priority to a shutdown reactor; the ACR Response Team reviewed the SMUD position and had no sympathy whatsoever for it. We will continue to express our position to DOE. DX 1366, at SMUD 0036648 (emphasis added). SMUD failed to present any testimony or evidence concerning what effect the grant of priority in SNF acceptance would have had in terms of DOE's acceptance of SMUD's SNF. 53. DOE explained at the time of Contract formation that the shutdown priority

provision in the Contract was "necessary to prevent reactors from waiting 20 or 30 years to be decommissioned after they finish generating electricity." Final Rule, 48 Fed. Reg. 16,590, 16,593 (Apr. 18, 1983) (PX 30). RESPONSE: The Government objects to SMUD's proposed finding of fact because it is not supported by the evidence cited and is contrary to the evidence presented at trial. See Gov't Resp. to PFOF ¶ 52. Further, SMUD has failed to cite any contemporaneous statement regarding 26

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how or why DOE would have exercised its authority pursuant to this provision. B. 54. SMUD and Its Development of a Dual-Purpose Dry Storage System.

Sacramento Municipal Utility District ("SMUD") is a municipal utility district in

the State of California. Tr. at 110-111 (Shetler). RESPONSE: The Government does not object to SMUD's proposed finding of fact. 55. Because SMUD is a public agency, SMUD does "not have stockholders like an

investor-owned utility would." Tr. at 111 (Shetler). Rather, SMUD