Delmarva Power & Light Co. v. United States

79 Fed. Cl. 205, 2007 U.S. Claims LEXIS 360, 2007 WL 4022890
CourtUnited States Court of Federal Claims
DecidedNovember 13, 2007
DocketNos. 04-34C, 04-36C
StatusPublished
Cited by16 cases

This text of 79 Fed. Cl. 205 (Delmarva Power & Light Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delmarva Power & Light Co. v. United States, 79 Fed. Cl. 205, 2007 U.S. Claims LEXIS 360, 2007 WL 4022890 (uscfc 2007).

Opinion

MEMORANDUM OPINION AND ORDER

CHRISTINE O.C. MILLER, Judge.

This matter is one of many that are pending in, and that have been before, the United States Court of Federal Claims involving contracts between the Department of Energy (“DOE”) and commercial operators of nuclear power plants concerning the disposal of spent nuclear fuel (“SNF”). Both Delmarva Power & Light Co. (“Delmarva”) and Atlantic City Electric Co. (“ACE”) (collectively “plaintiffs”) were owners, until September 27, 1999, of minority interests in two commercially operated nuclear power plants: the Salem Nuclear Generation Station Units 1 and 2 (“Salem”) and the Peach Bottom Atomic Power Station Units 2 and 3 (“Peach Bottom”). ACE was also an owner of a minority interest in a third nuclear plant, the Hope Creek Nuclear Generating Station (“Hope Creek”). In the instant action, plaintiffs assert three causes of action. First, plaintiffs allege that DOE has committed a partial breach of its contractual obligation to receive SNF. Secondly, plaintiffs allege that DOE breached the implied covenant of good faith and fair dealing by failing to accept SNF. Finally, plaintiffs allege that DOE’s failure to meet its obligations under both the Nuclear Waste Policy Act of 1982, 42 U.S.C. §§ 10101-10270 (2000) (the “NWPA”), and its contracts with plaintiffs forced plaintiffs to store SNF on their property, consequently reducing the value of their property and causing substantial economic harm that constituted a Fifth Amendment taking of property for which plaintiffs have received no just compensation.

Pending before the court are two separate motions. The first motion is plaintiffs’ Motion To Vacate Arbitration Ruling filed July 2, 2007. PSEG Nuclear LLC and Public Service Electric and Gas Co. (collectively “PSEG”) intervene as defendants in this case for the limited purpose of opposing this motion. The second motion is defendant’s renewal of its motion to dismiss, originally filed May 12, 2004, or, in the alternative, its motion for summary judgment, originally filed April 28, 2005. These motions were renewed on September 12, 2007, upon inquiry by the court in its August 30, 2007 order requesting supplemental briefing concerning the Government’s acceptance of plaintiffs’ assignment of claims to the subsequent purchaser PSEG, which has intervened in these proceedings for the limited purpose of arguing its position on the issues addressed herein. Defendant’s renewed motion for dismissal or, in the alternative, for summary judgment, addresses plaintiffs’ amended complaints in both cases.

[207]*207BACKGROUND1

Plaintiffs filed separate complaints on January 13, 2004, seeking relief solely on a takings theory. Atl. City Elec. Co. v. United States, No. 04-36C (Fed.Cl. filed Jan. 13, 2004); Delmarva Power & Light Co. v. United States, No. 04-34C (Fed.Cl. filed Jan. 13, 2004). Plaintiffs later amended their complaints to include damages based on a partial breach of contract. Compare Compl. filed Jan. 13, 2004, No. 04-34C, at 1I1Í 56-63, and Compl. filed Jan. 13, 2004, No. 04-36C (alleging only uncompensated taking) with Am. Compl. filed Dec. 2, 2004, No. 04-34C, at 111176-91, and Am. Compl. filed Dec. 2, 2004, No. 04-36C (complaints with three counts including breach of contract, breach of implied covenant of good faith and fair dealing, and uncompensated taking). On January 21, 2005, Atl. City Elec. Co., No. 04-36C, was consolidated with Delmarva Power & Light and assigned to the undersigned. Both Delmarva and ACE were owners of minority interests in Salem and Peach Bottom; Atlantic held an ownership interest in Hope Creek, as well. They sold these ownership interests to PSEG and PECO Energy Company (“PECO”)2 by Purchase Agreements dated September 27, 1999. Plaintiffs seek damages, alleging that DOE’s failure to dispose of SNF reduced the value of their property and caused plaintiffs to receive a diminished price when they sold their interests to PSEG and PECO.

DOE’s failure to dispose of SNF has been the topic of several cases and generated a number of opinions before the Court of Federal Claims principally dealing "with the type and amount of damages that can be awarded. See, e.g., Sys. Fuels, Inc.v. United States, No. 03-2623C, 2007 WL 3033659 (Fed.Cl. Oct.16, 2007); S. Nuclear Operating Co. v. United States, 77 Fed.Cl. 396 (2007); Vt. Yankee Nuclear Power Corp. v. United States, 73 Fed.Cl. 236 (2006); Rochester Gas and Elec. Corp. v. United States, 65 Fed.Cl. 431 (2005); Boston Edison Co. v. United States, 64 Fed.Cl. 167 (2005). The history of DOE’s failure to dispose of SNF has been sufficiently chronicled in these and other cases. See also Me. Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1337-39 (Fed.Cir.2000).

Briefly restated, the relevant history began in 1982 when Congress acknowledged that the disposal of nuclear waste was a matter of nationwide concern implicating commercial, health, and national security concerns and enacted the NWPA. The NWPA authorized the Secretary of Energy to enter into contracts with utilities for the disposal of SNF and high-level radioactive waste. See 42 U.S.C. § 10222(a)(1). The Act effectively made entry into these contracts mandatory for the utilities by prohibiting the Nuclear Regulatory Commission from issuing licenses to any operator who has not “entered into a contract with the Secretary” or who “is [not] actively and in good faith negotiating with the Secretary for a contract.” Id. § 10222(b)(1)(A). The NWPA required that all such contracts “shall provide that” DOE will dispose of the waste “beginning not later than January 31, 1998.” Id. § 10222(a)(5)(B). DOE drafted a Standard Contract for Disposal of Spent Nuclear Fuel and promulgated it through the rule-making process. 10 C.F.R. § 961.11 (the “Standard Contract”) (1983). The Standard Contract required utilities to pay DOE fees, including a one-time fee and ongoing fees based on the amount of electricity generated, in exchange for SNF disposal service. As the Act required, the contract obligated DOE to take title to, transport, and dispose of the nuclear waste stored at the utilities’ facilities beginning “not later than January 31, 1998.” Id. at art. II. In 2000 the United States Court of Appeals for the Federal Circuit held that DOE’s failure to take SNF by January 31, 1998, constituted a partial breach of the Standard Contract. Maine Yankee, 225 F.3d at 1343. In effect, DOE is hable for partial breach of every contract into which it has [208]*208entered with every commercial operator of nuclear power plants in the United States. The various cases before the Court of Federal Claims generally are limited to determining the nature and extent of damages caused by DOE’s partial breach.

PROCEDURAL HISTORY

Plaintiffs filed their complaints on January 13, 2004. On May 12, 2004, before the undersigned took Atlantic City from Judge George W. Miller, defendant moved to dismiss for failure to state a claim in Delmarva Power & Light, arguing that no cognizable takings claim had been stated. In briefs supporting the motion to dismiss, defendant argued, inter alia,

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Bluebook (online)
79 Fed. Cl. 205, 2007 U.S. Claims LEXIS 360, 2007 WL 4022890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delmarva-power-light-co-v-united-states-uscfc-2007.