Free Post Trial Brief - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS : MAINE YANKEE ATOMIC POWER : COMPANY, : : Plaintiff, : : v. : : UNITED STATES OF AMERICA, : : Defendant. : __________________________________________: __________________________________________

No. 98-474 C (Senior Judge Merow) Filed electronically February 18, 2005

MAINE YANKEE'S REPLY ON IT'S POST TRIAL PROPOSED FINDINGS OF FACT

JERRY STOUCK Spriggs & Hollingsworth 1350 I Street, N.W., Ninth Floor Washington, D.C. 20005 (202) 898-5800 (202) 682-1639 (facsimile) Counsel for Plaintiff, MAINE YANKEE ATOMIC POWER COMPANY Of Counsel: Robert L. Shapiro SPRIGGS & HOLLINGSWORTH Dated: February 18, 2005

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Table of Contents Page I. II. III. IV. V. VI. General Findings and DOE Contract ...................................................................................1 Reracking ...........................................................................................................................14 GTCC Waste......................................................................................................................15 Good Faith and Fair Dealing..............................................................................................16 Damages.............................................................................................................................16 The Government's Proposed Alternative Damages Findings Set Forth in Its "Additional Response To Maine Yankee's Proposed Damages Findings" Fail to Account for the Agreed Changes to Maine Yankee's Damages or Are Wrong .....................................................................................................33 A. B. The Government's "Summary" of the Abbott/Johnson Criticisms is Unreliable and Unhelpful.......................................................................................38 The Government's Proposed Alternative Findings That Certain of Maine Yankee's Damages Were Not Caused By the Breach Are Wrong. ...................................................................................................................39 The Government's Assertions That Maine Yankee's Claim Must Be Reduced to Eliminate Contingency and Purportedly Speculative Property Tax Costs is Wrong.................................................................................48 The Government's Assertions That Maine Yankee's Damages Must Be Reduced to Eliminate Unreasonable Costs Either Fails to Account for Changes Agreed to at Trial or Are Wrong.........................................50 The Government's Proposed Alternative Findings That Maine Yankee's Damage Should Be Reduced to Eliminate Unsupported Costs is Wrong Because Maine Yankee Provided the Government With Support..........................................................................................................64 The Government's Position re Discounting Maine Yankee's Future Damages to Present Value is Incorrect. .................................................................65

C.

D.

E.

F.

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS : MAINE YANKEE ATOMIC POWER : COMPANY, : : Plaintiff, : : v. : : UNITED STATES OF AMERICA, : : Defendant. : __________________________________________: __________________________________________

No. 98-474 C (Senior Judge Merow) Filed electronically February 18, 2005

MAINE YANKEE'S REPLY ON IT'S POST TRIAL PROPOSED FINDINGS OF FACT Maine Yankee submits this reply to the government's response to Maine Yankee's posttrial proposed findings of fact. As was the case in responding to the government's proposed findings, Maine Yankee can efficiently address many of the government's responses to Maine Yankee's Proposed Findings ("GRMYPF") in categories, while providing some additional replies to individual government responses. In many instances, the GRMYPF simply cite the government's own proposed findings of fact, to which Maine Yankee has already responded. Maine Yankee will not repeat those responses here, but instead respectfully refers the Court to Maine Yankee's prior filing. I. General Findings and DOE Contract To a remarkable degree, the government's responses to Maine Yankee's proposed findings regarding general issues and the DOE contract deliberately ignore or speak past the evidence cited by Maine Yankee. Instead, the government stubbornly bases its responses on the government's views of the Contract, most of which have already been rejected by the Court. See Order of June 26, 2003, substantially adopting Commonwealth Edison Co. v. United States, 56

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Fed. Cl. 652, 663 (2003). For example, the government cites Berry v. City of Detroit, 25 F.3d 1342 (6th Cir. 1994), at least two dozen times, for the proposition that testimony is not admissible on the issue of reasonable government performance. See GRMYPF 33-37, 41-56, 58, 72-74. The government's heavy reliance on Berry is misplaced, however, as it is neither a Federal Circuit decision nor even a contract case. It addresses the admissibility of expert testimony on the ultimate issue of fact in a 42 U.S.C. § 1983 case. Instead, in David Nassif Assoc. v. United States, 557 F.2d 249, 259 (Ct. Cl. 1977), the Federal Circuit's predecessor made clear in a contract case that consideration of testimony and other evidence is appropriate to determine what reasonable contract performance would have been where a term is missing from the parties' contract. This Court's ruling noted above (based on Commonwealth Edison) made clear that the DOE contract does not set out the terms of DOE's performance. Likewise, the government's reliance on First Heights Bank, FSB v. United States, 51 Fed. Cl. 659 (2001), see GRMYPF 52, for the proposition that testimony is irrelevant to the Court's interpretation of the obligations created by the DOE contract is also misplaced. First Heights merely recites the traditional rule that extrinsic evidence will not be received to aid the interpretation of "the terms of a contract that is clear on its face." 51 Fed. Cl. at 659 (internal citation omitted). As explained above, however, this Court has already ruled that the DOE contract is not clear on its face. The government similarly asks the Court to ignore much of the evidence cited by Maine Yankee regarding what reasonable DOE performance would have been on the ground that such performance is not contractually binding. See, e.g., GRMYPF 55-56 (arguing that Mission Plan and related documents are not binding), 75 (arguing that testimony regarding the need for acceptance capacity to handle unanticipated contingencies is irrelevant, because such capacity is

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not contractually required), 68 (arguing that evidence of DOE's plans to accept 3000 MTU of spent fuel per year is irrelevant because there is no obligation in the contract to accept spent fuel at that rate). Maine Yankee, of course, has not alleged that such documents were intended to automatically impose binding obligations. But such evidence is highly probative of what reasonable DOE performance would have been ­ evidence that the Court may use in the absence of an acceptance rate term in the parties' contract to fashion an appropriate acceptance rate provision. 4. The government's argument that the reasonably constant rate at which Maine

Yankee will accrue damages beyond 2010 was not litigated at trial is belied by evidence cited with MYPF 177. Although Maine Yankee is not requesting in this litigation a judgment to include such damages given the remote possibility that the government might perform by 2010, a finding regarding the accrual of such damages would help promote a more efficient resolution of the claim that Maine Yankee will likely eventually have to bring for such damages. 32. The government's argument that Dr. Wise did little independent analysis of

plaintiffs' damages claims does not fairly reflect the totality of his testimony or what Dr. Wise, in fact, did in this case. Dr. Wise explained well his close interaction with plaintiffs and his role in assessing plaintiffs' damages. Tr. 3352:12-3356:21. 53. The government's assertion that no evidence supports the portion of the finding

that DOE would compensate utilities for the failure to timely accept spent fuel is belied by P633, which states clearly DOE's contingency plans in the event a repository is delayed. See P633 at PNL-173-1284-85 (if the repository is expected to be delayed by less than two years DOE will either add buffer storage at the repository or take title to the spent fuel and move it into dry

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storage at the utility and pay a rental fee to the utility to store the casks at the reactor; if the repository is expected to be delayed by more than two years, then DOE would construct a MRS). 54. The government's claim that it specifically rejected utilities' requests for more

detail in the Standard Contracts is not supported by the cited government proposed findings. Those findings either merely claim that DOE did not adopt the suggestions of certain utilities or reflect Mr. Morgan's post hoc explanations for DOE's actions. The government has not cited any evidence to dispute the finding in MYPF 54.b. that DOE did not contemporaneously disavow the utilities' expressed understanding of the Standard Contracts. The government's assertion that Maine Yankee misstated the parties' understanding of the program's goals as set forth in early program documents is flatly wrong. The government's claim that DOE did not intend to eliminate the need for all utilities to construct additional atreactor storage is belied by P678 at 11 (Mr. Morgan's December 1983 "Program Overview" for OCRWM), which stated clearly that "[d]uring the first year of operation of the repository in 1998, we should be receiving fuel at a rate so that no utility would have to add any further storage facilities either on site or at another location." (emphasis added). P636 (a December 1983 draft of the Mission Plan) at 2-1, cited by the government, is in accord with Maine Yankee's proposed finding ("The waste materials will be accepted in accordance with a Waste Acceptance Schedule designed to provide an acceptance rate in the first five years such that no utility will have to provide additional storage capacity after January 31, 1998." (emphasis added). The Draft Mission Plan went on to explain that while an individual utility might face a need for expanded storage due to the timing of its shipment allocation, it was expected that in such instances, utilities would exchange with other utilities with earlier allocations and that "such

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brokering arrangements should prevent the need for any utility to expand on-site storage and minimize transshipments.") (emphasis added). See P636 at 2-2 and 2-4. 57. Although the government argues that efficiency is not a contract requirement for

the pace and schedule of SNF acceptance, the government concedes that efficiency is indeed "a program goal or objective," as the Yankees have alleged in its proposed findings. The government's argument that Dr. Bartlett's testimony that OCRWM was concerned with moving "must-move" fuel when he was director should be discounted because Dr. Bartlett approved the 1991 ACR, P60, which did not provide for must-move acceptance, misses the mark. As the government has emphasized, that ACR was submitted to Dr. Bartlett for approval with a memorandum, see D23, asserting that the acceptance rates in that ACR would enable utilities to avoid adding onsite storage (i.e., the acceptance rates would address must-move fuel). Although, as the government acknowledges, the 1991 ACR acceptance rates would actually not have addressed all must-move fuel, the approval memorandum shows that such performance was a concern for OCRWM in general and Dr. Bartlett in particular. In other words, Mr. Milner (the official who signed D23) must have thought that at least claiming that the rates in the ACR would adequately address at-reactor storage needs was appropriate in order to secure Dr. Bartlett's approval of the ACR. 58. Once again, although the government argues that cost-effective performance was

not a contract requirement, the government acknowledges that "the full costs recovery nature of the Standard Contract translates into a program goal or objective of operating the program in a cost-effective manner." The government's argument that Mr. Graves did not consider total system costs is wrong. In addition to his consideration of utilities' costs, as noted in MYPF 71, Mr. Graves relied, in part, on government studies, including P175, showing that an acceptance

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rate of 3,000 MTU per year would have to minimize program costs. Tr. 782:10-783:3. He also considered the impact of exchanges on the ability for DOE to use efficient acceptance campaigns and found that the use of exchanges would have been much more consistent with campaigned acceptance than OFF acceptance. Tr. 836:1-839:24 and Graves Demonstrative 90. 60. The government's disputation of a generally self-evident fact (that is also

supported by undisputed trial testimony), that a utility's at-reactor SNF storage costs rise if it is forced to add to its at-reactor storage capacity or if it is forced to extend at-reactor storage of SNF after it permanently shuts down, reflects a general lack of credibility in the government's positions. The government's claim that the costs of operating a particular type of storage facility does not generally depend on the amount of SNF and it is besides the point; plaintiff's proposed findings address situations where costs rise because either a new facility must be constructed and operated or an entire existing facility has to be operated because of the presence of SNF. 61. The government's claim that growth in must-move fuel could not be projected to

rise at a 3,000 MTU per year rate is belied by the evidence the government itself cites in response to MYPF 63. It is unhelpful for the government to raise technical objections to the evidence in supporting proposed findings while elsewhere essentially conceding the essence of the finding. The government's claim that D23, the approval memorandum for the 1991 ACR, represents an "analysis" that the acceptance rates in that ACR would accommodate at-reactor SNF storage needs is wrong. The statement in the document is an unsupported assertion, and the government presented no analysis to substantiate this assertion. Moreover, the government's claim is contrary to Mr. Pollog's testimony. Tr. 4039:22 ­ 4047:1. Moreover, Mr. Graves demonstrated that the 900 MTU acceptance rate would not have addressed at-reactor storage needs. Tr. 786:23-788:7; 918:7-919:11; 7503:3-7506:9.

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62.

The government's argument that Dr. Bartlett stated that an annual acceptance rate

of 900 MTU would have been reasonable uses Dr. Bartlett's statement out of context. Although it was reasonable for Dr. Bartlett to approve the 1991 ACR with a 900 MTU acceptance rate, that fact does not mean that such performance would have been reasonable in the context of the parties' 1983 agreement. By 1991, DOE had already made clear that it would not have a repository ready until 2010 and limitations on acceptance at another facility imposed by the 1987 NWPA amendments constrained other acceptance. See P101 (1989 Report to Congress on Reassessment of Program) and P60 (1991 ACR). Given that situation, acceptance of 900 MTU per year was reasonable in the sense that it was about the best DOE could do under the circumstances. Tr. 706:22-707:5 (as Dr. Bartlett testified, such a rate was not desirable, but reasonable). 63. The government's disputation that annual aggregate commercial discharges could

be projected to be about 2,000 MTU is silly, given that the evidence cited by the government is consistent with such discharges being at a rate between 2,000 and 3,000 MTU. If anything, the evidence cited by the government would indicate that acceptance at a rate higher than 3,000 MTU per year would have been reasonable. 64. The government's urged distinction between acceptance from utilities and an

efficient throughput for the DOE system is also silly. If DOE fails to accept spent fuel from utilities at a rate of at least 3,000 MTU per year then it could not run its system at an efficient 3,000 MTU per year rate because it would lack sufficient spent fuel to put through its system. Dr. Bartlett's testimony is in accord with this reality. Dr. Bartlett explained that the reasonable rates of acceptance from utilities and emplacement in a repository are the same 3000 MTU per year, in part because of how the two tasks relate to each other. Tr. 609:20-611:11.

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66.

Importantly, the government's response concedes that the evidence establishes

"that campaigns are `efficient'." The government's claim that plaintiff has not shown the relevance of campaigns in light of the oldest-fuel-first concept is wrong. Mr. Graves demonstrated that exchanges would have led to efficient campaigns. See MYPF 76.a. 68. The government correctly notes that there is a typographical error in Plaintiff's

proposed findings; of course, the finding intended to note that DOE has been planning to accept 3,000 MTU per year from utilities. As noted in the reply to MYPF 64 above, the government's claim of significance between acceptance from utilities and emplacement in a repository is without merit. The government's claim of a distinction between use of a 3,000 MTU per year rate to determine program costs and use of that rate in determining an adequate fee is similarly silly. The purpose of the fee under the cost recovery program, of course, is to adequately fund the program. 69. The government's disputation of this proposed finding that DOE could technically

have accepted spent fuel from utilities at a 3,000 MTU per year rate is evasive and disingenuous. It is obvious that the government cannot dispute that DOE could have accepted 3,000 MTU per year from utilities. The government's failure to find a place to put the spent fuel reflects the breach, not a technical impediment to robust acceptance. As reflected by the evidence cited by plaintiff (noting locations in Australia and Owl Creek), and indeed the ISFSIs plaintiff and the other Yankees are building at their sites, it is not technically difficult to identify a location at which to store spent fuel. 70. The government's suggestion that acceptance of 900 MTU per year would have

been reasonable absent the breach is without merit for the reasons noted in the replies on MYPF 61 and 62 above. Importantly, the government has not proposed a finding that a 900 MTU per

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year acceptance rate would have been reasonable absent the breach. The government's claim that it would have accepted spent fuel at the rates in the 1991 ACR is wrong as shown in Maine Yankee's response to GPF 93. 71. The government's claim that the record contradicts Dr. Bartlett's opinion that a

ramp up to acceptance of 3,000 MTU per year could reasonably be accomplished in three years is wrong. The government's assertion that DOE was planning to accept spent fuel at a 900 MTU per year is not supported. The 1991 ACR does not support this claim as noted in response to GPF 93. The government's argument that a centralized interim storage facility is not the same as an MRS is beside the point (and the government cites no evidence for its assertion that Dr. Bartlett said that the facilities were the same). As explained by Dr. Bartlett in testimony cited by plaintiff, a centralized interim storage facility is the sort of facility that DOE could have used to accept spent fuel from utilities at a reasonable rate starting in 1998. The government's claim that plaintiff cannot establish what DOE actually would have done if it had started acceptance in 1998, missed the mark. Plaintiff's evidence (and the relevant issue) goes to what DOE should have done to meet its obligation to accept spent fuel at a reasonable rate. In addition, the government's reliance on P978 to challenge the ramp up rate set out in the proposed finding is misplaced. P978 (a June 1983 report on financing the DOE program) assumes that DOE will accept 1800 MTU of spent fuel in the first five years of program operations (a total of 9000 MTU). This is about the same as the ramp up used by Mr. Graves, in which the first five years of acceptance (1200, 1200, 2000, 2000, 2700) totals 9100 MTU. 72. The government's claim that the parties' contract requires OFF acceptance except

for three exceptions notably ignores Art. VI.B.1(b).1. Similarly the government's argument that it can only be held liable for acceptance of spent fuel on an OFF basis ignores this Court's June

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28, 2004 Order explaining that the Court must determine how the exchanges provision would have been used absent the government's breach. 75. For the most part, the government's disputation of plaintiff's proposed finding

that utilities would have exchanged acceptance allocations consistent with their economic interests is based on the government's misinterpretation of Mr. Graves' analysis, debunked in plaintiffs' response to the government's proposed findings, that this finding depends on the development of a "perfect" market. Indeed, the government now admits that "some" exchanges may have occurred absent the breach. a. The government's suggestion that Mr. Collier's testimony showing that utilities

do tend find efficient ways to trade rights to further economic self interests should be ignored because his examples only pertained specifically to the front-side of the fuel cycle is without merit. The government offers no support for the proposition that utilities would have acted contrary to their economic self interests regarding the back end of the fuel cycle absent the breach. b. Maine Yankee cites the evidence of prior success between the industry and DOE

on dealing with fuel enrichment services as a good indication of the kind of success that the parties would have enjoyed arranging for exchanges under the spent fuel contracts. The government's accusation that plaintiff is trying to mislead the Court here is unhelpful and belies the fact that the government lacks any basis with which to appropriately dispute plaintiff's evidence. The government's claim that the plaintiff's statement that a robust and effective market developed is unsupported simply ignores Mr. Collier's testimony.

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76.

The government's assertion that its proposed findings show that DOE would have

used a variety of criteria to analyze proposed exchanges is wrong. GPF 139 merely asserts that certain criteria "may" have been used. a. The government asserts that Mr. Graves' model only shows allocations for some

of the spent fuel acceptance through 2002 (assuming reasonable government performance). The government's claim that this assertion is supported by GPF 171 is wrong. That proposed finding simply asserts that under Mr. Graves' model, some of the spent fuel acceptance goes to utilities with must-move fuel. b. The government's disputation of Maine Yankee's statement that exchanges would

have led to DOE's acceptance of "cooler" fuel wrongly focusses on operating utilities. The point of the finding is that the exchange provision would have enabled shutdown reactors that have quantities of "cooler" fuel to ship all of their fuel to DOE. 77. It is significant that while the government technically disputes this proposed

finding that there are no significant technical or transportation impediments to exchanges, the government does not even to attempt to address the particulars of Mr. Stuart's testimony cited by plaintiff on this issue. 78. The government is wrong to assert that it was not obligated by the parties'

contract to accept SNF upon a reasonable or efficient schedule. Given the absence of more specificity in the contract, the Court must supply the terms of reasonable performance. 82. The government's claim that the record indicates that DOE would not have

granted priority to plaintiff, if necessary, to prevent the company from waiting a substantial period to complete its decommissioning is unsupported. Similarly, the government's claim that there is no evidence of how DOE would have provided priority is belied by the Final Rule cited

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by the government. The government's claim that Mr. Milner testified that DOE did not have an objective of granting priority to shutdown reactors tellingly does not meet plaintiff's evidence. The evidence cited by Maine Yankee is Mr. Milner's testimony that DOE has had an objective of allowing shutdown reactors to timely decommission. Preferably, that objective would have been met through an efficient swap mechanism. As stated in the proposed finding, the granting of priority to shutdown reactors would only have been used, "if necessary." 85. The government's primary reason for disputing this proposed finding that

program delays caused Maine Yankee to reasonably believe that DOE would not start acceptance by January 1998 or proceed on a reasonable schedule and that there was significant uncertainty regarding the date when DOE would begin acceptance is that the proposed findings do not cite testimony from Yankee witnesses. The government ignores, however, testimony from Messrs. Thomas and Jordan, and the documents cited that fully support the proposed finding. Ultimately, the government has no means with which to dispute the cited evidence. As noted in the response to GPF 93, the 1991 ACR is not to the contrary, as the ACR made clear, and DOE knew, that the acceptance scheme set out in that document was inconsistent with existing law. 86. Although the government complains that the evidence supporting this proposed

finding that Maine Yankee has not had options other than on-site storage of its SNF available is limited, the government neither disputes that evidence nor offers any contrary evidence on the issue. 87. The government does not dispute that Maine Yankee took the steps that it did.

Instead, the government appears to argue that those steps were not taken in anticipation of DOE's breach, noting the government's proposed findings on that issue. Maine Yankee has

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already responded to the GPF. The government's assertions that Maine Yankee would have run out of room in its spent fuel even if DOE had performed is refuted by MYPF 116-118. 88. The government does not dispute the gist of this proposed finding, that beginning

in the late 1980s and through the late 1990s Maine Yankee evaluated alternatives for extended storage of its SNF and that these actions were reasonable. Instead, the government argues that these actions were not caused by the DOE breach. As established in MYPF 116-118, Maine Yankee was not going to run out of space in its pool so as to require anything more than a small, temporary rack if DOE had performed. Further, the government's argument that the studies evaluating whether Maine Yankee should store its SNF wet or dry show that a desire to decommission promptly, not the government's breach, was the cause of the need for extended storage is without merit. If DOE had been performing, the studies themselves would not have been necessary because DOE would have been removing the fuel, and Maine Yankee would not have needed to determine how best to store it. The need to decommission may have been a factor in the manner of extended SNF storage chosen by Maine Yankee, but the need to chose at all was caused by DOE's breach. 89. The government's arguments regarding this proposed finding are addressed in the

replies on MYPF 88 above. 93. The government complains that Mr. Bennet's testimony is without foundation.

Given that the Court has already received this evidence, this argument is not available to the government. Moreover, the argument is without merit. Mr. Bennet's testimony goes to the issue of why use of a transportable storage container for SNF is reasonable and appropriate for a shutdown reactor, which is the substance of the proposed finding.

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94.

Maine Yankee has already refuted the government's arguments that failed fuel is

subject to delayed acceptance in its responses to the government's proposed findings of fact. But even if the that government were true, it would not support the government's argument that Maine Yankee's decision to store its failed fuel dry is, thus, not reasonable and appropriate. Indeed, the longer the duration of the storage, the more appropriate the use of dry storage. See GRYAPF 102 (conceding that economics generally favors dry storage over the long term). 96. The government's effort to link Maine Yankee's implementation of dry storage of

its SNF to Mr. Graves' model of exchanges is without merit. The testimony cited explicitly relates to wet pool storage costs, not the costs of dry storage. The government's arguments with respect the excepts to Mr. Thomas' testimony cited appears to reflect a misreading of the testimony or the citations by the government; the first, citation, for example, is to three pages of testimony, not the few lines noted by the government. II. Reracking 107. The internal inconsistency in the government's response reflects the lack of merit

to the government's challenge to Maine Yankee's rerakcing damages. On the one hand, the government argues that Maine Yankee had to rerack despite DOE's breach because Maine Yankee was scheduled to run out of pool space in 1996. On the other hand, the government argues that if Maine Yankee had waited to rerack until after 1996, then it would have found that no reracking was necessary because of its shutdown. MYPF 116-118 make clear that Maine Yankee was not going to run out of pool space in 1996. Nevertheless, it was not incumbent on Maine Yankee to wait until the very last second to rerack its spent fuel pool. The government has offered no evidence for the proposition that the timing of Maine Yankee's reracking was unreasonable or inappropriate.

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108.

These government arguments are addressed in Maine Yankee's responses to the

cited government proposed findings and in MYPF 116-118. III. GTCC Waste 130. Notwithstanding the hesitation by the government's counsel at closing argument

to admit that the government would concede anything regarding GTCC waste, the government's response certainly does not dispute that GTCC waste is highly radioactive. 131. Although the government purports to dispute the finding that disposal in a

repository constitutes permanent isolation, the government does not address (and cannot avoid) the admission of this issue by its Rule 30(b)(6) witness. 134. Notwithstanding the government's claim of lack of evidence on this point, there is

ample support for the fact that the government has long been responsible for the disposal of highlevel radioactive waste. See, e.g., MYPF 33. 138. Helpfully, the government concedes "that the NRC has determined that GTCC

waste requires permanent isolation `unless proposals for disposal of such waste in a disposal site licensed pursuant to this part are approved by the Commission'." MYPF138 (citation omitted). And the government also concedes that it has not even proposed such an alternative. The government's claim that "[a]s part of the rule" NRC emphasized that it intended to preserve DOE's flexibility is wrong. The statement appears in the explanation of the rule, not the rule itself. See P1069 at 22579. And while the NRC clearly intended to preserve DOE's flexibility to pursue alternatives, that fact is not inconsistent with presently requiring (as it did in 1998 when DOE's performance was due) permanent isolation in order to "ensure that GTCC wastes are disposed of in a manner that would protect the public health and safety . . .." P1069 at 22578. 139. As is the case with spent fuel, the parties' contract is silent regarding the timing of

DOE's obligation to remove GTCC waste. The cited evidence is support for the provision of a 15

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reasonable term, that such waste had to be removed no later than the last of a utilities' spent fuel. The government's failure (and inability) to dispute any of the cited evidence or to offer any contrary evidence on this issue is telling. IV. Good Faith and Fair Dealing 146. The government's claim that the proposed finding, that DOE instructed and

required Maine Yankee to complete its DCSs in conformity with the pace and schedule for spent fuel acceptance in the 1991 ACR, is contrary to the evidence is unsupported. Ultimately, the government's "response" further confirms the proposed finding. 148. The government's response to this proposed finding that DOE required utilities to

conform their DCS to the acceptance rates in the 1991 ACR because it wanted to try to limit its liability to utilities is limited to a series of too late or rejected evidentiary arguments concerning the Court's decision to accept Mr. Vance's testimony and a plea to discredit his testimony because his employer represents other nuclear utilities. The notion that testimony from witnesses should be rejected as incredible if an interested party employs them is unhelpful, as it would effectively eliminate consideration of most evidence from witnesses with knowledge. V. Damages In its responses to Maine Yankee's proposed findings 152-178, the government asserts boilerplate objections to Maine Yankee's damages based on 1) purported deficiencies in Mr. Graves' economic sequence model; 2) assumptions Maine Yankee made in planning documents purportedly based on "timely DOE performance," but actually reflecting planning in the face of DOE's breach; 3) the government's position that the DOE contract does not cover GTCC waste or require timely acceptance of failed fuel; 4) alleged deficiencies in the discount rate used by Maine Yankee in computing its damages; 5) the government's adjustments to Maine Yankee's damages, set forth in the government's alternative damages findings ("GAF"). Those objections 16

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have all been refuted in Maine Yankee's previous post-trial submissions and/or are addressed elsewhere in this reply. Maine Yankee's reply points below address only objections other than this boilerplate that the government has asserted in response to Maine Yankee's indicated proposed findings. 152. The government's assertion that absent the breach, Maine Yankee would have

constructed a dry storage facility to support prompt decommissioning of its site, to make use of existing personnel, to ensure availability of a low-level waste site for decommissioning waste, and to facilitate site reuse is wrong. First, these points were addressed in the Yankee's Response to the Government's Post-Trial Legal Brief at 20-23. Second, the cited testimony does not support the government's contention. See Tr. 2747:16-2754:8 (Thomas) (Maine Yankee considered both wet and dry storage as options for the long term storage of its spent nuclear fuel and its Decommissioning Operations Contract ("DOC") with Stone & Webster included the option to pursue both wet or dry storage); Tr. 3160:1-3164:23 (Meisner) (the availability of a low-level waste site was not a major determining factor in Maine Yankee's decision to go forward with decommissioning; it was a secondary concern because Maine Yankee had a range of options for disposing of its low-level waste materials.) Finally, not one of the purported supporting cites in the government's response even discusses re-powering at Maine Yankee. 153. See Response to 152 above regarding the government's contention that Maine

Yankee would have constructed a dry storage facility to support prompt decommissioning of its site, to make use of existing personnel, to ensure availability of a low-level waste site for decommissioning waste, and to facilitate site reuse. Additionally, the government's contention that the inclusion of Maine Yankee's 2002 costs in past damages is a "mischaracterization of the evidence adduced at trial" is incorrect. Maine Yankee has in fact incurred costs for wet fuel

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storage through 2002 and such costs are appropriately categorized as "past." That Maine Yankee "estimated" its wet pool storage costs does not transform such costs into "future" costs. To the contrary, Dr. Wise explained his categorization of costs as between the "past" and "future:" "we submitted the [expert] report in 2003 so at that point, 2003 was the future and 2002 was the past." Tr. 3248:8-9 (Wise). See also Plaintiffs' Demonstrative 2043A.14 (showing Maine Yankee's past damages in 2002 and prior years and future damages from 2003 forward). Since 2002, Maine Yankee has continued to incur additional costs due to DOE's breach, so at present an even greater percentage of Maine Yankee's damages are comprised of past costs. Tr. 3202:11-12 (Wise) (by 2003, a very large percentage of the costs were past costs). 154. See Response to 152 above regarding the government's contention that Maine

Yankee would have constructed a dry storage facility to support prompt decommissioning of its site, to make use of existing personnel, to ensure availability of a low-level waste site for decommissioning waste, and to facilitate site reuse. Additionally, the government's assertion that Maine Yankee's future minimum damages are speculative and should await future adjudication is without merit, as set forth in Maine Yankee's response to DFF 314. 155. Contrary to the government's assertion, the terms "reasonable" and "reliable" in

this finding are not vague. Maine Yankee's process for preparing the February 20, 2003 Rev. VII Budget, which is part of P1726MY, as described in MYPF ¶¶ 155 and 163-167, bolsters the reasonableness and reliability of Maine Yankee's estimates. Furthermore, the government's assertion that "the purposes for which FERC uses long-term costs estimates are different from the damages analysis in which this Court must engage," and citing Mr. Johnson's testimony (Tr. 6325-6326) that "it' incumbent upon the proper measurement of an asserted claim for damages s for it to reflect the best estimate, only the best estimate," 1) ignores the fact that the FERC

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estimate is relevant to the reasonableness of the damages claim, as the government's expert acknowledges, Tr. 5570:20-5571:22 (Abbott). 156. While accepting that Maine Yankee's damages claim fall into the three categories of ISFSI Construction, ISFSI Operations and Wet Pool-Related, the government objects to the contention that Maine Yankee has suffered any damages, citing its responses to the proposed findings above. Maine Yankee, therefore, refers the Court to the above responses to government's objections to Maine Yankee's proposed findings. 157. See Response to 152 above regarding the government's contention that Maine

Yankee would have constructed a dry storage facility to support prompt decommissioning of its site, to make use of existing personnel, to ensure availability of a low-level waste site for decommissioning waste, and to facilitate site reuse. The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's ISFSI Construction Damages, based on its witness' opinion that certain of the costs are "nonincremental" or "unreasonable," duplicates GAFs 1-105, to which Maine Yankee responds below. Additionally, the government's objection to Maine Yankee's statement that all ISFSI construction costs have been "incurred" is frivolous. As the government acknowledges, Maine Yankee completed all ISFSI loading in 2004, thus all loading costs have, in fact, already been "incurred." That certain of Maine Yankee's ISFSI Construction costs included in the Rev. VII Budget were, at the time the damages submission was prepared, "estimated" for the years 2003 and beyond is not disputed. 158. See Response to 152 above regarding the government's contention that Maine

Yankee would have constructed a dry storage facility to support prompt decommissioning of its site, to make use of existing personnel, to ensure availability of a low-level waste site for

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decommissioning waste, and to facilitate site reuse. The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's ISFSI Operations Damages, based on its witness' opinion that certain of the costs are "nonincremental" or "unreasonable," duplicates GAFs 1-105, to which Maine Yankee responds below. Additionally, the government's assertion in response to 158.d., that Maine Yankee's ISFSI staffing should be reduced to 2 full-time technical staff positions and one half-time corporate executive is wrong. See Tr. 3128:14-3139:19 (Meisner) (explaining in detail the various functions and responsibilities required of each of member Maine Yankee's ISFSI staff and rebutting the government's experts assertions that Maine Yankee can or should operate with less staff). Furthermore, the government's response is not supported by the evidence it cites. Rather, P1462YA (cited by the government) supports Maine Yankee's current ISFSI staffing numbers. See YDK007538 (showing ISFSI staffing for 2002 and beyond at 5.1 FTEs ­ 2 on-site [Yankee] staff and 3.1 full time equivalent YNSD [Yankee Nuclear Services Division] staff ­ plus corporate staff of 3.5 FTEs); see also YDK007520 ("Overall staffing for the two options [wet and dry storage] differ, but total YNSD staffing is the same for both options . . . for the entire life cycle."); compare P1462YA, YDK007538 re dry storage staffing with YDK007537 re wet storage staffing). Staffing in D688 and D689 is for Connecticut Yankee's and Yankee Atomic's alternative GTCC only on-site storage alternatives in the nonbreach world, and is not relevant to the breach world staffing of Maine Yankee's ISFSI, which stores both SNF and GTCC waste. See also, Maine Yankee's response to GAFs 36 and 60 below, regarding corporate staffing. 159. See Response to 152 above regarding the government's contention that Maine

Yankee would have constructed a dry storage facility to support prompt decommissioning of its

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site, to make use of existing personnel, to ensure availability of a low-level waste site for decommissioning waste, and to facilitate site reuse. The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's Wet Pool Related Damages, based on its witness' opinion that certain of the costs are "non-incremental" or "unreasonable," duplicates GAFs 1-105, to which Maine Yankee responds below. Additionally, the government's objection to Maine Yankee's statement that all wet pool related costs have been "incurred" is frivolous. As the government acknowledges, Maine Yankee completed all ISFSI loading in 2004 (see Government's Response to MYPF ¶ 158), thus as of trial, all Wet Pool related costs have already been "incurred." That Maine Yankee's Wet Pool related costs were estimated is not disputed. See also Maine Yankee's response to the government's objection to MYPF ¶ 153 above. With regard to the government's objection to the use of P169, the government produced in discovery a copy of the PNL Study from DOE's files at Headquarters (Bates no. HQR 250873-905). The PNL Study also is available to "DOE and DOE contractors from the Office of Scientific and Technical Information" and "to the public from the National Technical Information Service." P169 at 2. Pursuant to the Court's September 17, 2004 Order governing contractor-generated documents, P169 has been admitted. Furthermore, the assertion in 159.c, that Maine Yankee's citation to Mr. Abbott's survey of other facilities' wet pool storage costs cannot support a finding that Maine Yankee's wet poolrelated costs are reasonable, because the survey results are "utility specific," is belied by Mr. Abbott's own reliance on the wet pool costs at General Electric's Morris, Illinois facility as a good method of identifying and determining the cost of operating a wet storage pool. Tr. 5652:11-17 (Abbott). The further contention in 159.c. that Zion information "is not contained

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with (sic) in an admitted exhibit" is disingenuous (and irrelevant), because the testimony regarding the Zion decommissioning cost study is in the record. Moreover, the implication in 159.c. that the cost of $7.5 million at Zion to "maintain dormancy" refers to something other than the annual cost to run the Zion spent fuel pool is wrong. Mr. Abbott identified the "4B Dormancy" period in the Zion report as the period having "fairly isolated wet pool costs." Tr. 6036:6-6037:25. And the conclusion in MYPF 159.c. regarding the annual cost of running Zion's wet fuel pool is not "base[d] upon the response to a hypothetical" but on knowledge of the author of the Zion decommissioning cost estimate. Tr. 6043:3-18 ("in our report C04-1326002 [TLG's decommissioning cost study for the Zion Nuclear Power Station], the wet storage costs shown in tables 4.1 and 4.2 for period 4B must be added together to obtain the total wet storage costs for the Zion units. There is only one pool, and the wet storage costs were shared between both Zion pools."). The government's cite to Mr. Abbott's opinion that staffing should be reduced to a total of 18 positions, also is unsupported. See Response to GAF 94, below. Additionally, the government's contention in Response to MYPF ¶ 159.d, that the citation to Mr. Abbott's testimony regarding staffing estimates contained in decommissioning estimates for other plants is mischaracterized is false. The five decommissioning cost estimates that Mr. Abbott and ABZ (his company) prepared for other utilities, Tr. 5673:14-19, showed that, during periods when the only or the predominant activity is operation of the wet pool, wet storage staffing far exceeded the 18 positions net of security that Mr. Abbott claims is "reasonable" for Maine Yankee. The wet staffing numbers in those studies range from a low of 29.25 to a high of 112. See Abbott Demonstrative 1; Tr. 5687:4-10 (Abbott) (agreeing that 50 positions, net of security, is what he determined would be necessary to run the wet pool at Duane

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Arnold); Tr. 5849:14-5850:5 (Abbott) (confirming wet storage staffing net of security of 112 in ABZ Nine Mile Point decommissioning cost estimate); Tr. 5853:3-5854:14 (Abbott) (conceding that wet storage staffing of 29.25 in ABZ Vermont Yankee estimate exceeds his estimate of 18); Tr 5855:1-5856:14 (Abbott) (acknowledging 60 wet storage staff in ABZ estimate for Calvert Cliffs); Tr. 5858:8-5860:7 (acknowledging wet storage staffing of 48.5 in San Onofre decommissioning cost estimate, in the preparation of which he was substantially involved). In addition, contrary to Mr. Abbott's contention (Tr. 5383:15-5384:1), a January 29, 1996 Yankee memorandum re Wet Spent Fuel Storage Evaluation (D603), does not support his wet staffing opinion. As Mr. Heider, who participated in the meeting associated with the memorandum and whose initials are on the bottom of Exhibit C to the memo, Tr. 2185:242186:6, testified: 1) Exhibit C to the memo recommends six people versus five people to fill an operating position, which would bring the 18 up to 20, Tr. 2184:15-17 (Heider) & D603 at YDK000662; 2) the analysis also includes three and a half people from the Yankee Nuclear Services Division that are providing technical support to the operation of the spent fuel pool, which brings the total to 23 and a half, Tr. 2185:8-2186:1 (Heider), which Mr. Abbott conceded, Tr. 5864:10-5865:5 (Abbott); 3) there are numerous assumptions in D603 associated with licensing changes, Tr. 2186:3-5 Heider) (citing YDK000652-53), which Mr. Abbott conceded, Tr. 5865:6-5866:8 (Abbott); 4) there also is an assumption in D603 that contractors or employees from sister utilities, for example, Vermont Yankee, which was approximately 30 or 40 miles away from the Yankee Atomic site, could be used to cover some of the positions, Tr. 2186:2-24 (Heider) & YDK000662, which Mr. Abbott also conceded, Tr. 5866:9-5867:6 (Abbott); and 5) D603 assumed that, to achieve the staffing levels noted below, a substantial investment of $3 million was required to modify the spent fuel building and operating systems to simplify

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operations and reduce the staffing level, a modification that was never made. Tr. 2186:252187:1 (Heider). As Mr. Heider further testified, Yankee Atomic implemented many of the concepts set forth in the memo, but it was never able it get near the 18 number. Tr. 2187:132188:2 (Heider); see also 2184:6-4 (Heider) ("now that we' completed spent fuel operations at ve Yankee Rowe, I can say that we never operate[d] the spent fuel pool with 18 people."). The remaining evidence on which the government relies does not support this finding.1 160. Contrary to the government's assertion, Maine Yankee's process for preparing the

cost estimates that support its damages claim, as described in MYPF ¶¶ 155 and 163-167, bolsters the reliability of Maine Yankee's estimates. The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's damages claim on the basis that Maine Yankee damages claim "conflicted with the government's audit and the opinions expressed by Messrs. Johnson and Abbott" duplicates GAFs 1-105, to which Maine Yankee responds below. 161. While the government acknowledged that Todd Smith, Michael Thomas, and Michael Meisner are knowledgeable about the costs that Maine Yankee incurred or will incur to manage and store SNF on site, the government's asserts that they are not "qualified as experts" to express opinions about damages and that furthermore, Dr. Wise "abdicated" his role in that determination to these witnesses. This response is inaccurate. First, the estimates prepared by Maine Yankee were reasonable and reliable. See MYPF ¶¶ 152-178. And the government's complaints regarding the expert nature of the testimony are both too late, since the Court has
1

The statement in P1462YA (on which the government relies) regarding 18 wet staffing positions cites D603 as its source. See P1462YA at YDK007521 (citing "Reference 3"), YDK007532 (identifying Reference 3 as D603). DX266 (on which the government also relies) in turn also cites D603 as its

source. See D266 at COF006444 (citing "Reference 3") and COF006447 (identifying reference 3 as D603) 24

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heard the testimony and wrong, since the witnesses have sufficient personal knowledge with which to testify on the issues. Second, Dr. Wise reasonably relied upon Maine Yankee's estimate to support his own expert opinion about the damages Maine Yankee incurred. See MYPF ¶¶ 167-173. The government's assertion that Dr. Wise abdicated his role, inferring that he did little independent analysis of Maine Yankee's claim is incorrect. Dr. Wise testified that it was his independent decision to rely on Maine Yankee's cost estimates in preparing its damages claim: "This goes back to the very early days of the project where we were trying to determine the best way to go about doing our damage analysis. And through the process of educating ourselves and the companies as to what the issues are going to be and how we might address them, the use of the company budgets as a primary source of information for our analysis was a result of that process. The deliberative process led us to the conclusion that using the company budgets would be a very good way to do this analysis." Tr. 3364:11-3365:4 (Wise). See also Tr. 3195:8-18 (Wise) (same). Far from abdicating his role, as the government suggests, Dr. Wise testified that he and his staff 1) constructed an economic damages model by going through the Yankees" budgets "to see what line items would constitute damages and what line items would not constitute damages," and "interact[ing] with the company to make sure we all understand the budgets and that we're identifying the proper lines," Tr. 3196:24-3197:2, 3197:11-13, see also Tr. 3196:19-3206:25, 3208:1-3220:11 (Wise) & Wise Demonstratives 2043A.2-.8 (detailed explanation of use of company budgets to construct damages model); and 2) put their own imprimatur on the damages by "review[ing] the information from the company and challenge[ing] it where it looked like there may be inconsistencies among the companies, or numbers might look anomalously high in particular line items." Tr. 3360:25-3361:4 (Wise) see

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also Tr. 3353:15-3355:12, 3356:15-21, 3369:12-23 (Wise) (identifying line-item changes in company budgets). With respect to his analysis of Maine Yankee's cost estimates, Dr. Wise testified that: "[I]t's a very thorough process where we went over every line in their budgets to make sure that there wasn'some sort of issue that we had to address to get a correct estimate of damages." Tr. t 3369:24-3370:2 (Wise). See also Tr. 7284:25-7285:24 (Jewell-Kelleher) ("we worked endlessly with the Brattle Group staff, line item by line item, looking in particularly and being challenged on what lines [of the 10/29/02 cost estimate] . . . would occur . . . in the nonbreach world, and what the appropriate offsets would be for each and every line item in the cost estimate, so as to determine what the true incremental costs are to the damages in this case . . . . I was very involved in that myself."). Regarding adjustments to Maine Yankee's cost estimates, the companies determined the amount of the adjustments because "[they] have the information necessary to determine what appropriate changes in staffing would be, what appropriate changes in other items would be." Tr. 7497:2-5. Dr. Wise, however, "was involved in the process of preparing the changes. There were changes where conversations with the companies would identify an issue where it was useful for us to go into the links. And people working under my direction would do that so that we could address those issues properly." Tr. 3360:11-16 (Wise). See also Tr. 3370:17-23 (Wise) (same). The remaining assertions in this response regarding the government's "adjustments" to Maine Yankee's cost estimates duplicate the GAFs 1-105 to which Maine Yankee responds below. 162. The government does not dispute this finding other than their objection to Maine Yankee's statement that all wet pool related costs have been "incurred." This objection lacks

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merit. As the government acknowledges, Maine Yankee completed all ISFSI loading in 2004 (see Government's Response to MYPF ¶ 158), thus as of trial all Wet Pool related costs have already been "incurred." That Maine Yankee's Wet Pool related costs were estimated is not disputed. See also Maine Yankee's response to the government's objection to MYPF ¶ 153 above. 163. The government's assertion that P1726MY is not reliable (or was "prepared for

this litigation") has been rejected by the Court's ruling to the contrary. See Tr. 3436:5-6 (Court ruling: "It' [P1726MY] admitted in evidence for business record purposes."). Moreover, the s assertions in this response regarding the government's "adjustments" to Maine Yankee's damages duplicate GAFs 1-105, to which Maine Yankee responds below. 164. The government does not dispute the detailed description of the process by which

Maine Yankee prepared the Rev. VII Budget, which contrary to the government's assertions does bolster its reliability and also is relevant. The government's additional response asserting that P1726 MY does not fall within the business records exception has been rejected by the Court's ruling to the contrary. See Response to Government's Objections to 163, immediately above. Also, the assertions of this response regarding the government's "adjustments" to Maine Yankee's damages duplicates GAFs 1-105, to which Maine Yankee responds below. Finally, the government's contention that Dr. Wise did no critical review of P1726MY is incorrect. See Response to the Government's Objections to MYPF ¶ 161 above. 165. This response largely reiterates the assertions in the government's response to 164 above, to which the same reply is applicable. The government does not dispute the facts cited in MYPF 165.a. and 165.b. detailing the experience that Maine Yankee personnel have in preparing cost estimates, which contrary to the government's assertions does bolster the reliability of

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Maine Yankee's estimates and is relevant. The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's damages claim, based on its witness' opinion that certain of the costs are "non-incremental" or "unreasonable," duplicates GAFs 1-105, to which Maine Yankee responds below. 166. This response to 166.a. disputing that Maine Yankee is tracking within 1% of the

Budget approved as part of the 1998 FERC settlement is flawed. The government ignores the testimony of Mr. Smith, which stated that the FERC settlement number of $500 million was in "nominal" dollars as of 1998. Tr. 3003:1-11. Additionally, the government's objections based on "lack of foundation" and "relevance" to MYPF ¶ 166.b. regarding the October 2003 FERC rate case settlement are frivolous. The cited testimony supports the finding. With respect to the government's response to 166.c., the government does not dispute that when utilities submit cost estimates to FERC in a rate-making proceeding, those estimates have to be reasonable and that if such costs are not reasonable, they are likely to be thrown out. However, the government's suggestion that these findings do not support the reasonableness of Maine Yankee's budget estimates because Maine Yankee includes $5 million in contingency and because Maine Yankee made $8.1 million in adjustments, is erroneous. Maine Yankee properly includes contingency as part of its damages claim, see Maine Yankee's response to GAFs 50-52 below, and the reason for each adjustment to Maine Yankee's damages estimate are attributable to issues unique to calculating an appropriate "damages" award, as opposed to issues related to Maine Yankee's estimate of costs. Finally, the government's assertion that "the purposes for which FERC uses Maine Yankee's long-term estimates are different from the damages analysis in which this Court must engage," and citing Mr. Johnson's testimony (Tr. 6325:25-6326:2) that "it's incumbent upon the proper measurement of an asserted claim for damages for it to reflect the best estimate,

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only the best estimate," ignores the fact that the FERC estimate is relevant to the reasonableness of the damages claim, as the government's witness acknowledges, Tr. 5570:20-5571:22 (Abbott). Maine Yankee's finding 166.d. citing its award of damages in the Stone & Webster litigation squarely supports Maine Yankee's proposed finding that Maine Yankee's long-term cost estimates have been found to be reliable by others, which, contrary to the government's assertions, is supportive of the reasonableness and reliability of Maine Yankee's estimating process. 168. This response largely reiterates the assertions in the government's response to 161

above, to which the same reply is applicable. 169. This response largely reiterates the assertions in the government's response to 161

above, to which the same reply is applicable. 170. This response largely reiterates the assertions in the government's response to 161

above, to which the same reply is applicable. The last sentence of this response, asserting that Dr. Wise did not rely entirely upon Maine Yankee's three-section analysis, supports the conclusion that Dr. Wise performed his own independent damages analysis. As Dr. Wise explained, "The sectional analysis is the companies' first pass at what damages should be by category. But we didn't start our analysis from there. We started it from the actual budgets and the individual line items." Tr. 3279:20-24 (Wise) (emphasis added). The government's response does not, in any event, detract from the proposed finding that the three-section analysis provides a "check" on Dr. Wise's work. 171. Contrary to the government's assertions, Maine Yankee established the

admissibility of P1726MY and Dr. Wise reasonably relied upon Maine Yankee's estimate to support his own expert opinion about the damages Maine Yankee incurred. See Tr. 3436:5-6

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(Court ruling: "It' [P1726MY] admitted in evidence for business record purposes.") and MYPF s ¶¶ 167-173. Moreover, this response regarding the government's "adjustments" to Maine Yankee's damages duplicates GAFs 1-105, to which Maine Yankee responds below. 173. The government's assertion in this response that Maine Yankee is not entitled to

recover any of its "pre-1999" costs as a matter of law is addressed in Maine Yankee's previous post-trial submissions. With respect to Maine Yankee's pre-1999 costs discussed in this response, Dr. Wise reviewed no source documents supporting pre-1999 damages because he reviewed with Maine Yankee his use of the numbers from the Barry reports. Tr. 3221:14-3223:7 (Wise) (received pre-1999 cost information from Barry report and reviewed Barry numbers with companies prior to inclusion in damages); see also Tr. 3338:16-17 (Wise) ("I'm relying on [Mr. Barry's] work as reviewed by the companies."). The government's additional objections concerning adjustments the government asserts should be made to Maine Yankee's damages claim, based on its witness' opinion that certain of the costs are "non-incremental," duplicates GAFs 1-105, to which Maine Yankee responds below. 174. The government's objections to Maine Yankee's proposed findings concerning

contingency duplicate GAFs 50-52, to which Maine Yankee responds below. 175. Contrary to the implication in the government's response to 175.a., Dr. Wise did

not testify that a risk free discount rate is only appropriate when the future cost is expected to be a sum certain. He also testified that "if you believed that in fact the company' escalation rates s were more appropriate than my inflation rates, you might view the risk-adjusted rate as too high, and you might view the risk-free rate as a more appropriate rate for discounting the future cash flows." Tr. 3237:5-10 (Wise). See Wise Demonstrative 2043A.13 (after-tax risk-free rate "may be appropriate if escalation of these costs is expected to exceed general inflation"). In addition,

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the government evasively cites only half of Dr. Wise's testimony regarding how to correct a present value calculation to accommodate a higher escalation rate. Dr. Wise testified: "There would be two ways to handle it. One way would just be to put in the higher inflation rate. The other way would be to leave my inflation rate alone but achieve the equivalent result by lowering the discount rate. Tr. 3237:17-21 (Wise) (emphasis added). Finally, contrary to the assertion in this response, there is evidence in the record to support a finding that the companies' higher escalation rate was the appropriate rate to use. See Tr. 3232:10-17 (Wise) ("3.8 percent is actually a very common escalation factor in the budgets that we got. This created an issue for me because 3.8 percent, while it may be reasonable for the sorts of costs that these companies incur and may be consistent with their experience and may even be approved by FERC, is a number that' in exces