ENTERGY NUCLEAR FITZPATRICK, LLC et al v. USA
Filing
131
ORDER granting 107 Plaintiffs' Motion for Partial Summary Judgment re acceptance rate. Signed by Judge Edward J. Damich. (jsb) Copy to parties.
In the United States Court of Federal Claims
No. 03-2627 C
(Filed: May 13, 2011)
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ENTERGY NUCLEAR FITZPATRICK, LLC ,
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ENTERGY NUCLEAR INDIAN POINT 3, LLC,
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and ENTERGY NUCLEAR OPERATIONS, INC.,
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Plaintiffs,
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v.
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THE UNITED STATES,
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Defendant.
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OPINION AND ORDER
On January 28, 2011, Defendant filed a motion for partial summary judgment “on the rate
at which Defendant the United States (the „Government‟), acting through the U.S. Department of
Energy („DOE‟), was required to accept spent nuclear fuel („SNF‟) from plaintiff utilities under
the Standard Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste
(„Standard Contract‟).” In its motion, Plaintiff argues that the U.S. Court of Appeals for the
Federal Circuit (“Federal Circuit”), via its decision in Pacific Gas & Elec. Co. v. United States,
536 F.3d 1282 (Fed. Cir. 2008) (“PG&E”), established “as a matter of law that DOE was
obligated to accept SNF from utilities at annual aggregate rates set forth in the 1987 Annual
Capacity Report (“1987 ACR”) and the 1987 Office of Civilian Radioactive Waste Management
(“OCRWM”) Mission Plan Amendment (“Mission Plan Amendment” or “MPA”).
Accordingly, Plaintiff asks this Court to adjudicate issues of causation and the calculation
of damages in this action based on the rates of the 1987 ACR and Mission Plan Amendment.
For the reasons stated below, the Court GRANTS Plaintiff‟s motion for partially
summary judgment on the acceptance rate.
I.
Standard of Review
Summary judgment “is appropriate if the movant can show both the absence of genuine
issues of material fact and entitlement to judgment as a matter of law.” Wellman, Inc. v.
Eastman Chemical Co., -- F.3d -- , 2011 WL 1601994 at *4 (Fed. Cir. 2011).
II.
Discussion
A. 1987 ACR
In PG&E, the Federal Circuit reviewed the process under the Standard Contract whereby
DOE was to issue annual capacity reports (ACRs) beginning not later than July of 1987. “These
reports set forth projected annual receiving capacity for DOE facilities and annual acceptance
rankings, including projected capacity information for the first ten years of operations for the
[SNF] repository.” 536 F.3d at 1285-86. The court referred to the entire process of ACRs,
acceptance priority rankings (APRs), and delivery commitment schedules (DSCs) as “the
acceptance capacity schedule or ACS process.” Id. at 1286. The reason for its extensive review
of the ACS process was that the “damages analysis” for DOE‟s partial breach of the Standard
Contract “requires some minimum acceptance rate.” Id. at 1289. “[W]ithout an acceptance rate,
the contract would be meaningless and nonsensical . . ..” Id. It held that “[t]he acceptance rate is
thus an essential term of the contract.” Id.
Determining which ACS to use was deemed the “salient question.” Id. at 1290. The
court determined that “[t]he 1987 ACR process therefore provides the best available pre-breach
snapshot of both parties‟ intentions for an acceptance rate,” id. at 1292, because that was when
“both parties still anticipated timely and full performance of the contract.” Id. at 1291.
Accordingly, it held that the 1987 report “presents the most reasonable measure of the
contractual acceptance rate.” Id. at 1292.
Defendant does not dispute that in PG&E the Federal Circuit “defined the rate of
acceptance of spent nuclear fuel and high-level radioactive waste („SNF/HLW‟) required under
the Standard Contract through 2007.” Def.‟s Response at 1.1 It opposes Plaintiff‟s request for
summary judgment on the rate through 2007, however, as “an unnecessary advisory opinion on a
matter of unambiguous appellate precedent.” Because, as Plaintiff points out, the parties are
nevertheless engaged in a concrete dispute as genuinely adverse litigants, the Court finds it more
than merely “advisory” to grant Plaintiff‟s motion in this respect.
B. 1987 Mission Plan Amendment
Plaintiff‟s motion additionally requests summary judgment in favor of the acceptance
rates identified in the 1987 Mission Plan Amendment, which sets forth rates through the year
2038.2 Plaintiff acknowledges, however, that because NYPA‟s damages include its costs
through September 30, 2009, “only the rates through 2009 are necessary for adjudication of this
issue in this case.” Pl.‟s Reply at 3 n.1. Even so, Defendant argues that “neither the Standard
Contract, the 1987 ACR, or the 1987 Mission Plan imposed upon DOE any rate-related
obligations beyond 2007.” More specifically, it explains that the 1987 Mission Plan Amendment
merely set out “aspirational rates” beyond 2007 and that the PG&E decision “did not hold
otherwise.” The rates of acceptance for 2008 and 2009, it argues therefore, are genuine issues of
material fact and inappropriate for summary judgment. Resp. at 4-5.
1
Table 2.1 of the 1987 ACR itemized the “Waste Acceptance Schedule” for the first 10 years, 1998 through 2007,
of the commencement of DOE SNF acceptance.
2
Table F-1 of the MPA reflects acceptance only of SNF during the first 10 years; it reflects acceptance of HLW as
well beginning in 2008.
2
In Energy Northwest v. United States, 91 Fed. Cl. 531, 549 n.16 (2010), reversed on other
grounds, No. 2010-5112, 2011 WL 1312306 (Fed. Cir. Apr. 7, 2011), this Court, however, has
already endorsed the proposition that the 1987 ACR process incorporates both the 1987 ACR
and the 1987 MPA. The 1987 ACR references the MPA in several instances. For example, in
the 1987 ACR Summary, it states, “The system configuration used as the basis for this report is
defined in the Mission Plan Amendment.” In Section 2.0, “Projected Waste Acceptance
Capacity,” it states, “The waste acceptance schedule in this ACR is consistent with the schedule
from the Mission Plan Amendment.” Table 2.1, specifying the receipt rate for SNF in MTUs
(metric tons of uranium) for the years 1998 through 2007, notes that the data was extracted from
Appendix F, Table F-1, of the MPA. As such, the 1987 ACR is inextricably linked with the
1987 MPA as part of the ACR “process” endorsed by the Federal Circuit in PG&E. This linkage
is consistent with the PG&E court‟s endorsement of the 1987 ACR as a “snapshot” of the
parties‟ intent when the parties were still contemplating timely and full performance of the
contract.
C. GTCC Waste
A more complicating matter is Defendant‟s opposition to Plaintiff‟s motion as it applies
to the issue of DOE‟s acceptance of Greater-Than-Class-C (“GTCC”) waste. In Yankee Atomic
Electric Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008), a companion case to PG&E, the
Federal Circuit held that GTCC counted as high level waste (“HLW”) and was thus part of
DOE‟s contractual acceptance obligation. Although the first 10 years of waste acceptance as
specified in the 1987 ACR, Table 2.1, did not include HLW, the court determined that, had DOE
begun timely performance in 1998, it would have accepted the Yankee plaintiffs‟ GTCC waste
“with the SNF.” 536 F.3d at 1278.
Defendant argues, therefore, that “[a]dding previously unaccounted for material to the
waste acceptance queue would necessarily extend the queue, delaying the acceptance of
materials previously scheduled for removal in accordance with how many materials were added
as a consequence of Yankee Atomic.” Resp. at 6. Plaintiff maintains, however, that the 1987
ACR and MPA “contemplated separate HLW and SNF acceptance queues.” Reply at 4.
The Federal Circuit‟s decisions in PG&E and in Yankee Atomic appear to be in conflict
with respect to the timetable for acceptance of GTCC waste. At the very least, in PG&E, the
Federal Circuit endorsed the acceptance rates found in Table 2.1 of the 1987 ACR. Table 2.1
includes a footnoted clarification that “[t]he waste acceptance schedule for HLW is not included
since the Mission Plan Amendment does not specify acceptance of HLW during the 10-year
period covered by this report.” Table 2.1 also specifically cites as the source for those rates
Appendix F, Table F-1, of the “OCRWM Mission Plan Amendment.” These comments strongly
suggest that GTCC waste would not have been accepted prior to 2008.3 GTCC waste therefore
would not have contributed to “extending” the SNF queue at least until that 11th year of
acceptance (and even then, not at all, if, as Plaintiff maintains, the 1987 ACR and MPA
“contemplated separate HLW and SNF acceptance queues.”).4
3
The court in Boston Edison Co. v. United States, 93 Fed. Cl. 105, 117 (2010) was even more emphatic in this
conclusion: “The 1987 annual capacity report („ACR‟) explicitly states that HLW (of which GTCC waste is a part)
would not be accepted prior to 2008.”
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Plaintiff also suggests that GTCC generated by all the nuclear utilities “would have had no effect on the pick-up
rates even if GTCC were factored into the SNF queue.” Reply at 5 (citing, e.g., S. Cal. Edison Co. v. United States,
93 Fed. Cl. 337, 354 (2010)).
3
Table F-1 of the MPA is consistent with that view, showing SNF-only acceptance for the
first 10 years of DOE performance at specific yearly quantities, with HLW acceptance in specific
additional quantities beginning in 2008. Yet the Federal Circuit in Yankee Atomic found that
“the record shows that the Government planned to (and would have) removed the GTCC with
the SNF.” 536 F.3d at 1278. The court affirmed the trial court‟s findings “that conclusions
reached with respect to recoverability of SNF storage expenses are equally applicable to GTCC
waste.” Id. at 1279. The trial court based its opinion on record evidence of damages incurred
only through 2001 for two of the Yankee plaintiffs and through 2002 for the third Yankee
plaintiff. This was, obviously, well within the 10-year period in which the 1987 ACR acceptance
rates, as endorsed in PG&E, indicate there was to be no HLW pick-up.
This Court holds that, pursuant to the 1987 ACR, DOE‟s obligation for the period 1998
through 2007 was to accept SNF only and at the acceptance rates specified. Under the 1987
MPA, the acceptance of HLW, in addition to SNF, was not an obligation of the Government
until 2008 and was to begin in that year at the rates specified therein specifically for HLW. The
determination by the Federal Circuit in Yankee Atomic that the Government would have picked
up GTCC “with the SNF” can only be explained as a finding specific to the facts of that case
(“The parties‟ intentions and actions, as revealed by these documents and numerous others in the
record, provide firm footing for the trial court‟s conclusion that „it is very unlikely that DOE
would remove all SNF without also taking plaintiffs‟ GTCC waste.‟” 536 F.3d at 1278).
III.
Conclusion
Plaintiff here is making no claim for damages for GTCC waste acceptance. There are no
genuine issues of material fact and Plaintiff is entitled to summary judgment based on the
acceptance rates set forth in the 1987 ACR and the acceptance rates through 2009 set forth in the
1987 MPA. Plaintiff‟s motion is hereby GRANTED.
s/ Edward J. Damich
EDWARD J. DAMICH
Judge
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