Free Supplemental Brief - District Court of Federal Claims - federal

Case 1:01-cv-00115-SGB

Document 164-6

Filed 02/01/2005

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YankeeAtomic Electric v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004 Heritage Reporting Corporation Page 3378 to Page 3660

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Case 1:01-cv-00115-SGB U.S Nos.:98-126C, 98-154C, 98-474C August2,2004 2 ofXMAX(58/58) Document 164-6 Filed 02/01/2005 Page 8 Yankee Atomic Electric v
Page 3606 the defenseappropriation, and you're going to haveto come with the other 749 million. And dght nowmy up understanding that there are discussionsat very is senior levels within the Office of Management and BudgetandCongress order to try to addressthis. in But the simple answer your question, and to I didn't mean go on, is wedo not havedirect to access that fund. It hasto be appropriated to by Congress. Andthe industry over the years has made several aftemptsto try to get the wastefund usedfor (1) (2) (3) (4) (5) Page 3608 questions about your educational background and your work experience. SoI'll askyoufirst, sir, if yougraduated from the United States Military Academy 1952? in A Yes. Q And what degree did you obtain when you graduated? A It's a bachelor of sciencein military engineering. Q Okay. And at that time, you were commissioned a secondlieutenant in the United as

(5) (6) (7) (6) (9) (10) (11) (12} its original purposes. that legislation up until And (13} this point hasnot beenpassed. (14) THECOURT: Okay. Anything further? MS. SULLIVAN: Nothingfurther, YourHoner. (15) (16) Thank you. THE COURT: Okay. You're excused. And (17) (18) thank you very muchfor your testimony. (19) MR. MILLER:Your Honor, our next witness (20) will be Mr. RobertMorgan, (21) THE COURT: Okay. (22) Whereupon, {23) ROBERT L. MORGAN (24) wascalled as a w~tness,and, having first beenduly (25} sworn, wasexamined testified as follows: and

(6) (7) (8) (9) (lO) (11) (12) States Army? (13) A Yes. In the United States Army Corps of (14) Engineers. (15) Q Okay. if youwill, please,sir, if you And for (16} could just summarize the Court what your (17) subsequentassignmentsin the Army were. A After graduation, there was an interim (18) of (19) assignment about 2-1/2 monthsin Fort Lewis, on (20) Washington my wayto Korea. I served with the 25th I (21) infantry division in Korea.After the warended, (22) transferred to Japan.From Japan,I wentto Fort (23) Braggwith the 82ndairborne division, (24) Andafter 2 years there, the Armyselecled (25) meto go to MIT. I spent 2 years there and received a

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Page 3607 DIRECT EXAMINATION BY MR. MILLER: Q Good afternoon, Mr. Morgan. Would you state your full name the record, please,sir. for A Robert L Morgan. Q And you are a former director of what started out to be the Nuclear Waste Policy Act project office, and whatduring your tenure became Office the of Civilian RadioactiveWaste Management; that is correct? A Yes.That's correct. Q As we're talking here today, Mr. Morgan, you have to try to remember let mefinish my question to before you answerso the court reporter doesn't have to try to decidewhichone of us shewantsto reflect in the record. Doyou think youcando that, sir?

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Page 3609 masterof science in civil engineeringand a masterof sciencein nuclear engineering. Subsequent that, I wentto IdahoFalls, to Idaho, assignedto the U.S. - to the AtomicEnergy Commission. Following that, I went lo an advanced courseat Fort Belvoir. Thento Indonesiaas a special assistant to the ambassador civic action. for After myreturn from there, I resigned my commission from the military and ioined the Atomic EnergyCommission 1965. Initially assignedfor a in year in Savannah River. I transferred to Southern California for reactor development. Spent7 years there. I wassefected as the deputy manager at

A Yes. (17) Q All right. Thank you. (18} THE COURT: You can ask him questions, too. (19} (20} MR. MILLER: I beg your pardon, Your Honor. THECOURT: Go ahead. Offrthe-record (21) (22) commentshere. (23) BY MR. MILLER: Q Mr. Morgan, I would like before we begin (24} (25) your substantive testimonyto ask you just a few

Savannah River. I spent 7 years as deputy managerand then 8 years as manager before I retired from DOE at (16) that time. Q Okay, sir. And you retired from DOE what in (17) (18) year? (19) A 1988. (20) Q Okay, sir. Your assignmentto the - to (21) Idaho Falls - and I believe you mentioned that you (22) were working with the Atomic EnergyCommission that at time? (23) (24) A That's correct. Q And what was - what did that assignment (25)

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XMAX(63/63) v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004 Document 164-6 Filed 02/01/20053628Page 3 of 8 Page normal of doingbusiness. way (1) were formutated, youhave plan, a specitic plan did a QDoyourecall that it translatedinto any (2) ta beableto dothat? specificrequirements youare aware that of? (3) A No. A No. No, sir. (4) QAll dght, sir. Mr. Morgan, Mifls Mr. QAll right, sir, Mr. Morgan, yourecall do earlier this thaithatafferhis in (5) testified with youandother program leaders,you discussing Mr.Millsthe utilities' beliefthat with (6} discussion that the acceptance under contract rate the the contract- sorry, I already I'm asked that (7) agreed question. (8) would sufficient to cover rate of the be the of nuclear fuel at the timeplus some I believe testifiedthatMr.Mills you (9) generation spent ta off Did ta discussed you belief that theutilities with his (10) amount work the backlog. youagree I'msorry,theutilities' beliefthatthecontract {11) that? should contain acceptance is that correct? an rate; (12) A No. A That's myunderstanding, correct. (13) QDid you make representationsto any QAnddo you recall howhe conveyed that idea (14} Mr.Mills or any otherrepresentativethe utilities of ta you? a (15) concerningspecific A Correctly. (16) A No. Q Okay.Face face? to (17) Q -rate? A Yes. (18) A No. Q In discussions youin youroffice? wilh (19) Q Didyouevertell Mr.Mills or anyone else AWell, hesaid that, yes, it should includea though contract the itself would not (2o) that, even rate, and saidno. I (21) containa specific acceptance nonetheless, rate, you agreed the rate the utilities wanted that would the be QAndwhydid you tell him no? A Because that wascontrary to whatwasin the would beginto use? (23) rate that DOE rule-making process. Thatwas severalof the (24) A No. comments utilities hadrequested from that. And in (25) MR.SHAPIRO: Objection. Leading.

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Page3627 the process resolution pdorta publishing of and the final rule-making, was that denied. QAll right, sir. Doyourecall why was it that that was denied? A Becauseof uncertainties. We the didn't know that time whatan acceptance wouldbeor at rate couldbe, andthat wehadnoconceptual designof facilities. We looking threedifferentmedia. were at One basalt, onewas was tuff, andonewas salt. And there'snoquestion the activtiies in a salt dome that would much of a censtrucfion be less problem in than the other media. youcouldactually run the And driffs fastarth a salt media. QAll dght, sir. What aboutplansfor transportation the timethe contractwas at formed? Didyouhave plansfor transpodation the timethe at contract being I'm sorry, when sayat the was I time the contractwas formed,I mean between time the that the draft contractwas published the timethe and contractwas published. A I wasawarethat there wereinadequate commercial licensedcasks available for whatwouldbe needed, that wehadto estabtisha program get and to NRC cedified casks. QAll right. Soduringthe timethe contracts

Page3629 (1) THE COURT: Well, I take it that you are (2) asking about specific- I'll overrule objection. the (3) Theanswer stand,I lhink it was no. can a (4) BY MR.MILLER: Q Mr. Morgan. when weredirector of the you (5) program, youever make representations did any ta (7) utility representativesprivatethatwere in different (8) thanthe publicpositionsthat youtookonthe (9) program? (10} A No. (11) QAndconversely, did you make public any (1 announcements respectto the program then in with and (13) privategive different assurances? A No. (14) (1 Q Mr.Millstestified earlier thistrial, in (16) Mr. Morgan, youandother DOE that officials (17) discouraged written communications himaboutthe with (18) variousaspects the program youdiscussed of that with him. Doyou- did youdothat? A That's simplynot true. (20) QWhat about your staff? Are you awarethat (21) (22) yourstaff didthat? (23) A No. (24) QAll right. After publication the draft of (25) contract the Federal in Register, EElgive you did

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whereasclause that was requested? A No~ Q And why? For what reason did you take that - did younot includeit, if youwill?

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A Becausethe entire program had not been defined. Wedid not knowwhat the acceptance rate wouldbe. Andwefelt that that shouldbe includedin the missionplan, Q All right, sir. We'll talk aboutthe

(1) missionplan. Q All right, sir. Now,did you ever agree (2) (3) with Mr. Mills that the 1-mill fee wasbeingpaid by acceptance (4) the utilities in return for a 3,000MTU rate? A No, No. (6) QAIt right, sir. th the contextof fhe (7) contract, do yourecall the concept oldest fuel of first or OFF? (10) A Yes. (11) Q Andwhat was that concept? (12) A Theconceptwasto take the oldest fuel (13) first Q All right,sir. (14) A - fromthe utilities, th other words, (15) be (16) first out of the reactor would the pdority of acceptance the repository. to Q All right. Doyou recall, sir, whyyou (18) indicatedthat there needed be a priority of to (19) acceptance? A Well, becauseeverybody would like to get (21) rid of their fuel as quickly as possible. And felt we (22) (23) that weshouldtake the oldest fuel first. Andof {24) coursethat wouldbe the fuel that hadthe greatest (2S) decayso it wouldhave less heat load on the

mission plana little bit later. But did you- even thoughyoudidn't puf an acceptance rate in the final to (12) contract, did you give anydifferent assurances (13) anyoneabout someunwritten agreementon acceptance (14) rates in the contract? A No. (15) Q In that regard, Mr. Morgan,do you recall (16) (17) Mr. Mills assertingto youthat the 1-mill fee be (18) paid - that wasbeing paid under the contracts wasin on (19) return for a specific rate of pedormance DOE's (20) part? (21) A I don't knowthat I can say that waswhat (22) wasspecifically said, but that wascertainly part of that he was (23} the - what I understandthe message (24) transmitting. Q Okay. Anddid you ever agree with Mr. Mills (25)

Page 3635 (1) that the 1-mill fee wasbeing paid in return for some performance under the contract? (2) level of DOE A No. I did not agree with that. (3) (4) Q All right. The question of- £msorry. (3) Ili stad again. (6) I'm sorry, you may have answered this. If (7) youdid I apologize.Doyourecall if Mr. Mills ever (8) equated the rate, the acceptance rate that the (9) utilities wanted the contract to some in specific (10) number metric tons of uraniumper year? of (11) A I don't really recall. (12) Q All right, sir. Evenif he haddoneso, havemaftered to you at the (13) woulda specific number (14) time the contract wasformed? A No. (15) Q Why that? is (16) A It waspremature. (17) Q Whywas if premature? (18) (19) (20) (21) (22) (23) (24) (25) A Again, because the status of the program, of in the contract, which was, you know, happening immediataly after myarrival, that process,that I felt it wasinappropriate - for us to commit to to anyreceipt rates at that time. Q All right. A Andthat it wasto be dealt with in the

Page3637 (1) repository. (2) Q All right, sir. Did youbelieve at the time (3) the contracts were formedthat you wouldbe able to you (4) accepteverythingufilifies wanted to take all at (5) once? A No, (6) Q Andwhywas that, sir? (7) A tt wasimpossible.It couldn't be done. (5) (9) Onefor the reasonthat you're going to haveto havea at (10} certain rate of acceptance a repository, which (11) wouldnot meet the - whatthe ufilities wouldlike to (12) releaseta us, Q All right, sir. Doyourecall a provision (13) (14) in the contract that allowedutilities to exchange (15) their allocations of acceptance? (16) A Yes. (17) Q Do you recall if fhat wasrequested by the (18) utility? A Yes. And then there were - during the (19) process,there wereutilities that thought (20) rule-making (21) that should be removed.Andin the process, we (22) resolvedthat by leaving that provision in. Q All right, sir. I'll showyou nowYankee (23) 30. (24) Exhibit Number (25) MR. MILLER:All right, Your Honor, I'm

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Case 1:01-cv-00115-SGB Yankee Atomic Electric v

U.S Nos.:98-126C,

Document 164-6 Filed 02/01/2005 Page 5 ofXMAX(70/70) 8 98-154C, 98-474C August2,2004
(1) (2) (3) (4) (5) (6} (7) (8) (9) (10) (11) Page 3656 repository design receipt rates? Hadyou begunto do that at the time the contract wasformed? A No. Q Do you recall Mr, Mills representing to you or arguing to you that the acceptance rate underthe contract should be the repository designreceipt rate? A There wasn't a receipt rate under- in the contract. Q Yes,sir. Sothe question again? A

Page 3654 (r) AndI didn't haveanyagreement with Mr. Mills. (2) Q AII right, sir. I believe yousaid that you (3) recalled Mr. Mills discussingwith youthe rates that (4) are reflected in the draft missionptan A Yes. (5) Q - that we've beentalking about(6) A Yes. (7) Q -is that correct? (8) (9) (10) (11) (12) Doyourecall that he said that the rates, the schedule there didn't comport with the utilities'

understanding that ha thought he had with you and other DOE officials aboutthe acceplance rate that they expectedunder the contract? (13) (14) A I did not have any agreements with Mr. Mills or anyof the utilities as to rates of acceptance. (15) Q Under the contract? (~6) A Underthe contract or relative to this (17) schedule,this table. (18) Q All right, sir. Just a few morequestions (~9) andI believeI'll befinished with mydirect (20) (21) testimony, Mr. Morgan. (22) Doyou recall if before the NuclearWaste (23) Policy Act, wasthere a specific statutory direction (24) to DOE devetspa repository? to A Not that I know of. (25)

Q Yes. Doyou recall that Mr. Mills asserted (12) to youthat that's the rate that shouldbe in the (13) contract, the repository designreceipt rate? A I don't - I'm sure that he could have. I (14) (15) don't know. Q Okay, sir. Hadhe done so at the time, (~6) a (17) wouldyou havemade representation to him that the (18) contract receipt rate wouldbe the rapository design (19} receipt rate? (20) A Absolutely not. Q And why was that? Whywould you not have (2~) (22) done so? (23} A Becausewe dealt with that in the (24) rule-making process. Andthere wasno waythat I (25) wouldgo through a ruts*makingprocess without, you

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Page 3655 Okay.By the way, after you took over the program,did Mr. Brewer, Mr. Coffman,did they have anything to do with decision makingon the program? A No. Q All right. Soyou and your newstaff in the - in the office werethe - wereyouthe sole individuals responsiblefor implementing act? the I wasresponsible A Q You were? the A - for implementing act, Q Thebuckstoppedwith you; is that correct, sir? A Yes,sir. Q I'm sorry? A Yes,sir. Q Andyou reported to Secretary Hedel; is that correct? A That's correct, Q Okay. Betweenthe time the draft contract waspublished and the final contract waspublished, had you begunto developthe design for the repository?

Page 3657 (1) know,in the contract, and denyinga receipt rate and otherwise. (2) turn around and makea - an agreement (3) That'sludicrous. (4) QAll dght, sir. Doyourecall if the in would (5) contract did address the manner which DOE (6) acceptspent nuclearfuel trara the utilities? (7) A Yes. In the appendices. Q All right. And do you recall what the (8) (9) contract said aboutit in general? i(10) A That there would be a process that would be (11) an acceptancerate that would be negotiated with DOE (~2) at a later point in time. Q All dght, sir. At the time the contract (13) whatthat rate woufdbe? (14) wasfinalized, did you know A No. (15) (16} MR.MILLER: All right, sir. Just one (17) moment,Your Honor, to makesure (18) THECOURT: Take all the time you need. (19) MR, MILLER:All right, Your Honor, due to of (2o) the lateness the hour, is it all right that we (21) breakfor tonight? It may I havea few edditional be sort of like to, especially (22) questions.I would (23) consideringthe hour, to considerthat. THE COURT: Sure. Wecan do that. (24) MR. MILLER:All right. Thanks, Your Honor. (25)

(17) (18) (19) (20) (21) (22) (23) A That was in the process. So, yes, we would of (24) have staded development a design. (25) Q Okay. What about specific design-

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Yankee Atomic Electric Nos.: 98-126C, Case 1:01-cv-00115-SGBv.U.SDocument 164-698-154C, 98-474C August Filed 02/01/2005 Page 3665 Q, Sir.if you con,justreading fro~the basic strategy." youseethat? do A. Yes. Q. If youcould just readthat theendof to

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(1) A, T~at's correct_ Q. And after your approximately one-year (2) (3) tenure as eating director of the NuclearWaste (4) Project Office, youdidn't follow whethappened with after that time, did you? (5) the nuclear wasteprogram A. No, I wasbusywith other activities, (6) Q. And you didn't subsequently consult wRh (7/ (8) any entity on issues that involved commercial spent (9) nuclear fuel? (10) A. I think that whenMr. Ruechewas appointed, (11) weshared an apertmentin Washington,D.C. and to say Policy (12) that we never talked about the Nuclear Waste (13) Act wouldbe incorrect. (14) (15) (iS) (17) (18) (19) (20} (2t (22) (23) (24) (25) O. But other ~han),our informalinteractions with Mr. Rueche? A. That's correct. Q. Now, you spoke a numberOf times in your direct examination, Mr. Morgan,about what you did net agreeto in termsof putting into the contract, but actually, while you wereat the NuclearWaste Pr@ect Office, the Depadment Energynever really of defined how the scheduling processfor accepting spent fuel wouIdwork, isn't that true? A. 1 believe that wasin the appendices the of contract.

Page 3666 Q. Afl right, sir, and so that's what youwere as (2) trying to convey a result of your, of the last peal of your statementthere? (3) (4) A. Yes. (1) is) Q, All righl, sir. (6) MR. MILLER:No further questions at this (7) time, YourHonor. (8) THE COURT: Okay, Cross-examination. (9) MR. MILLER: Mr. Morgan, do you need some (10) water upthere? THEWITNESS: would appreciate it. I (11) {12) MR. MILLER: AIIdghL (13) CROSS-EXAMINATION BY MR. SHAPIRO: Q. Goodmorning, Mr. Morgan, Good morning. (16) A. (17) Q, I havea few" questionsfor you, Let me (18) start off about, andI just wantto confirmsomething (lg) I think I understood from your direct testimony. You (20) first got a copy andread the NuclearWaste Policy (21} Act after the Secretary askedyouto take your (22) deposition, is that dght? (23) A. That's correct. f24) Q. SOyOU weren't involved at a/~ in the (25} development that Act? of (14) (15)

Page 3668 Q. But while you werethere, did the project (2) office define howthe scheduling processwould work? A. Well, that wasdefined in the contraoL (3) Q, I want to ask you a few questions about the (4) (5/ contract in ~ust a moment. Morgan,while you Mr, (6) wereacting director, did youdeal with actual (7) pickups of spent nuclear fuel andhigh-level waste? A. Did I deal with the acceptance fuel? of (B) (e) Q. Right. A. We acceptedno fuel during the time that I (10) was there. (11) Q. So you didn't have occasion to dea~with (12) those issues? (13) (1) (14) A. That's correct. (15) Q. Now,you were not actually involved in the (16) decision to developthe standard contract on (17) rule-making, were you? Youweren't the one who (18) decided to use a notice and comment rule-making (19) process to developthe project? (20) A. No, that had started before I ardved. (21) Q. Andin fact, you don't knowwhy, in fact, Policy Act evenspecified that the (22) the Nuclear Waste (23) programwould be pursuedthrough contracts, do you? (24} A. t didn't, I don't understand quesf(on. ~he (25) Q. The Nuclear WastePolicy Act directs that

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v. UoS Nos.: 98-126C, 98-154C, 98-474C August 3, 2004 Document 164-6 Filed 02/01/2005 3695 Page 7 of 8 Page (1) A. Yes. there have a [itge bit of been (1} proceeding, might (2) Q. Was possiblefor DOE predict, in it to (2) confusion that point. on ratestheywould ableto usein be (3) 1983,what we'retalkingabout the (3) Butultimately, (4) accepting in 1998? fuel relevancy. Thank for yourtime. you (4) same A. No. (5) (5) THEWITNESS: You're welcome. Q, Based your understanding the Act, the on of (6) (6) THE COURT: Anyredirect? NWPA, ~t require that DOE did accept spentnuclear Honor. (7) (7) MR.MILLER; Shortredirect, Your fuel and high-level waste startingin '98 at a rate (8) moreroundhere. (8) THE COURT: One preclude utilities from adding further (9) that would EXAMINATION (9) REDIRECT stsrage lecilities on-site? (10) (10) BYMR. MILLER: (11) A. No,that was part of the Act. not (11) Q. Youthoughtyou weregoingto get away, (12) Q. Was that a program goal that you hadat the (12) didn't you, Mr. Morgan? (13) time youweredirector(13) THE COURT: don't blameyou, you want to I (14) A. Thatwas program that weidentified a goal (14) goback Oregon, think. to I plan. (15) in the mission (15) THE WITNESS:nowlive in Colorado. I (16) Q. And that a goal that DOE is specifically (16} THECOURT: Oh, Colorado. to (17) declined put in the contract? (17) BY MR.MILLER: (18) A. Yes.I mustsaythat wehadn'tidentified, (18) Q. Mr. Morgan, DOE did elect not to put a rate signed prapared, or we (19) at the timethe contractwas (19) of acceptance the standard in contract? hod identifiedthe ecceptance that welater not rates (2O) (20) A. Yes. in plan. We hadn'tgottecthat (21) included the mission (21) Q. Was a delibaratachoice your part? that on (22) far at the timeof the contract.The required Act (22) A. Yes. the by feel why (23) that wehave utilities sign a contract June (23) Q. Did DOE - well, canyoutell me and (24) 30th, 1983, webednot gottenta anydesign, (24) you didn't, that you didn't puta specific rate of design the repository that time. on at (25) conceptual (25) acceptance the contract? in

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Page3694 (1) A. I felt that it, because the of uncedainties the program, of which I've discussed (2) (3) eadier, the NRC licensingprocess characterization, (,~) the R&D otheractivities, that I thought was and it not prudent put anacceptance in the to rate (5) (6) contract. (7} Q. Andwhatabout your knowledge the of technical technological scientific capabilities or or (8) (9) that youwere goingto have have the to at (10) repository,did youknow whatthosewere that at time? (11) of (12} A. Notin total because the fact that NRC had identifiedthe requirements ticensing. not for (13) Q. Okay. (14) quite honestly(15) A. And (15) Q. I'msorry. (17) A. Geologists great,it's a historical are not and (18} science, a predictivesciesce, theycantall (19} youwhathappened miifion yearsago, but they tive (20) won'ttall youwhat'sgoingto happen tomorrow, and (21) that was problem wehadto dealwith. a that of (22) Q. Sothat wasa concern yours? (23) A. Yes,that was concern mine. a of I'm was (24) Q. In yourmind, sorry, in yourmind, {25) this program a first of its kindof project?

Rage3696 (1) Q. All right, sir. In yourmind, Morgan, Mr. (2) what'sthe differencebetween program anda a goal (3) contractualrequirement? (4) A. They weretotally separate.Thecontract (5) wasthe agreement between andthe utilities, and DOE goal our the (6) the program was best effodsat meeting (7) requirements the Act. They of were totally (8) d~fferent. (9) MR.MILLER: haveno further questions, I (10) YourHonor.Thank you, Mr. Morgan. Anything further? (11) THECOURT: (12) MR.SHAPIRO: Nothing further, Your Honor. COURT: right. You're excused,and All (13) THE (14) thankyouvery much your testimony. for Thankyou, sir. (15) THEWITNESS: (16) MR.MILLER: Your Honor, the government (17) calls, as its nextwithess,Mr. Benard Rusche. (18) WhereuponC. (19} SENARD RUSCHE a witness,called for examination, having been duly sworn, (20) (21) was examthed testified as follows: and Just take a seat. (22) THECOURT: (23) DIRECTEXAMINATION (24) BY MR. MILLER: (25) Q. Areyou allset, Mr. Rusche?

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CERTIFICATE OF FILING I certify that, on this 1st day of February, 2005, a copy of the foregoing "DEFENDANT'S 2004

SUPPLEMENTAL BRIEF IN RESPONSE TO THE COURT'S DECEMBER22, ORDER" filed electronically. was

I understand that notice of this filing will be sent to all parties

by operation of the Court's electronic filing system. Parties mayaccess this filing through the Court's system.

s/HaroldD. Lester. Jr.