Entergy Nuclear Fitzpatrick, LLC v. United States

United States Court of Federal Claims·Decided December 15, 2015·No. 03-2627·Unpublished

Opinion

In the United States Court of Federal Claims No. 03-2627C (Filed: December 15, 2015) NOT FOR PUBLICATION

**************************** ENTERGY NUCLEAR FITZPATRICK, LLC, ENTERGY NUCLEAR INDIAN POINT 3, LLC, Spent Nuclear Fuel; and ENTERGY NUCLEAR OPERATIONS, INC., ISFSI; Dry fuel storage; Standard Plaintiffs, Contract; Damages; Partial breach; NRC v. fees. THE UNITED STATES,

Defendant. ****************************

ORDER AND FINAL JUDGMENT

On October 28, 2015, the court announced a bench ruling after trial. The parties subsequently stipulated to the correct amount of judgment due plaintiffs assuming the correctness of that ruling, and the court is now prepared to enter final judgment. The order which follows is drawn from an edited version of that bench ruling, but there are no substantive changes intended. See Tr., Oct. 28, 2015, ECF No. 238.

The court has already determined that the United States is liable for its breach of the Standard Contract for Disposal of Spent Nuclear Fuel. The sole purpose for trial with respect to plaintiffs’ operation of the Indian Point 3 and FitzPatrick nuclear plants was the quantum of damages to which plaintiffs are entitled for the continuing partial breach. Plaintiffs claim a total of $106,741,389 in damages incurred during the period Nov. 21, 2000 through June 30, 2013. The government does not contest $77,970,459 of the claim, leaving in dispute approximately $29 million. Plaintiffs are only seeking damages for the period subsequent to their acquisition of the two plants.

All of the cost claims relate to the consequences of the government’s failure to commence Spent Nuclear Fuel pickup (“SNF”) from FitzPatrick and

1 Indian Point 3 by the contractually required dates, prompting the otherwise unnecessary construction of dry a fuel storage facility at FitzPatrick and associated costs for operating that Independent Spent Fuel Storage Installation (“ISFSI”), making plant modifications, procuring dry fuel storage casks, and loading and moving the casks. Plaintiffs’ claims for Indian Point 3 relate to modifications to the existing facility to accommodate dry fuel storage, procuring storage casks and related equipment, moving the SNF from Indian Point 3 to Indian Point 2’s spent fuel pool using a shielded transfer canister (“STC”), then loading the SNF into dry storage casks, and moving them to the existing ISFSI at Indian Point.

It is undisputed that, under the applicable DOE acceptance rates, DOE would have commenced performance at FitzPatrick in 2000 and at Indian Point 3 in 2001. We accept the basic claim that, at FitzPatrick, the breach caused construction of the ISFSI, the procurement of dry storage casks, the loading of those casts from the wet pool to dry fuel storage, and, at Indian Point 3, that the breach caused plaintiffs to procure dry fuel storage casks, make an interim transfer from Indian Point 3 to Unit 2, then load those casks from the Unit 2 wet pool to dry fuel storage containers and to the Indian Point ISFSI.

There are 23 disputed items and our resolution of them listed below:

1. Upgrading the Indian Point 3 Fuel Storage Building Crane–Plaintiffs claim costs for upgrading the Indian Point 3 Fuel Storage Building Crane. The amount claimed by plaintiffs for this item is $10,070,149 ($10,068,838 plus the amount defendant challenges for payroll loader costs of $1,311). Conclusion: not recoverable

A. Stipulation 14 states that, “[i]n 1994, NYPA planned a capital project to upgrade the fuel storage crane at Indian Point 3 to be single-failure-proof. NYPA noted that the existing fuel storage building crane had insufficient lift capacity and was not single-failure- proof to safely lift spent fuel casks when shipment was required in the late 1990s.”

B. Stipulation 16 states that, “had DOE fully performed under the standard contract, NYPA would have upgraded the reactor building crane to be single-failure proof prior to the sale of the FitzPatrick plant to Entergy.”

C. The upgrade was not a result of DOE’s breach because it would

2 have happened in the but-for world. The fact that Entergy paid for it rather than NYPA does not make the cost attributable to the breach.

2. Loading of Holtec Dry Storage Casks–Defendant challenges certain of Entergy’s costs in loading of the Holtec dry storage casks: $4,083,915 for loading costs at Indian Point 3 and $2,554,157 of loading costs at FitzPatrick. Conclusion: recoverable

A. Although little is known regarding what DOE performance will look like when it eventually happens, this should not be held against plaintiffs as a deficiency in their construction of a non-breach world. The breach makes it impossible to know what that loading campaign will look like.

i. Plaintiffs posed a number of questions aimed at this problem in their interrogatories and requests for admission. The answers they received were either insufficient to allow them to model DOE performance and compare it with their own or the answers directly support plaintiffs’ assertion that this comparison is impossible. For example:

a. In response to an interrogatory number 2, defendant states that “When the standard contract was promulgated, it was contemplated by both utilities and DOE that bare fuel assemblies would be loaded into transportation casks provided by DOE,” but went on to admit that a contract amendment will be necessary to “define the terms and conditions of acceptance for canistered fuel.”

b. In interrogatories 3 and 4, plaintiffs inquired of specifics regarding the cask DOE would have provided for transport. The extent of the answer given was that, at Indian Point 3, a legal-weight truck cask would have been “suitable for use” unless Entergy allowed for loading to intermediate transport cask for subsequent loading to a larger final transport cask; and, for FitzPatrick, DOE stated that a larger rail cask would have been suitable for use. For both locations, it was admitted that, at the time that DOE was analyzing and planning for transport at these locations, “no DOE reference cask could have been used” at either site without further

3 analysis, administrative revisions, and possible site modifications. Defendant summed up its answer by saying that DOE had not selected a cask for use at either site.

c. Defendant argues that this assumes that plaintiffs are relying on the government’s refusal to answer interrogatories and that they should have asked the court to direct better answers. The opposite is true. Plaintiffs are relying on what defendant represented in its answers, not on the absence of answers.

B. The fact that plaintiffs will have to do a loading campaign in the future (to DOE) is no answer because we know now that plaintiffs will have had to load twice. The balance of the evidence shows that it is more likely than not that Entergy will have to re-perform these same tasks in a new loading campaign when it loads to DOE in the future.

C. The breach caused Entergy to have to load to a transport and then storage cask at least one more time than would have been the case had DOE performed. Plaintiffs would not have had to load to an ISFSI in the non-breach world. At Indian Point 3 we know that loading and unloading and reloading through the pool at Indian Point 2 is all extra work.

D. The common thread in the court’s resolution of the various items is that plaintiffs can recover for those work items that we either know will be done twice or which they have shown will probably have to be done twice. If plaintiffs cannot show that for a cost item, then they cannot recover for it.

3. Part 171 Nuclear Regulatory Commission Fees–Plaintiffs claim a portion of the Part 171 U.S. Nuclear Regulatory Commission (“NRC”) fees. The amount claimed by plaintiffs for these fees is $3,866,070.

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