System Fuels Inc. v. United States

66 Fed. Cl. 722, 2005 U.S. Claims LEXIS 224, 2005 WL 1804314
United States Court of Federal Claims·Decided July 29, 2005·No. No. 03-2642C·Published·Cited by 10 cases

Opinion

MEMORANDUM OPINION AND ORDER REGARDING SUMMARY JUDGMENT MOTIONS

BRADEN, Judge.

FACTUAL BACKGROUND1

A. The Nuclear Waste Policy Of 1982 Act Required The Federal Government To Provide For The Permanent Disposal Of High Level Radioactive Fuel.

In 1982, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. § 10101 et seq. (“NWPA”), pursuant to which the federal government assumed the legal duty to “provide for the permanent disposal” of spent nuclear fuel2 and/or high-level radioactive waste3 from utilities across the country by providing for the long-term storage of such material. See 42 U.S.C. § 10131(a)(4) (“Congress finds that — ... the Federal Government has the responsibility to provide for the permanent disposal of high-level radioactive waste and such spent nuclear fuel as may be disposed of in order to protect the public health and safety and the environment!!.]”); see also 42 U.S.C. § 10131(b)(2) (“[T]o establish the Federal responsibility, and a definite Federal policy, for the disposal of such waste and spent fuel[.]”). Congress imposed the cost of such acceptance and disposal on SNF [724]*724and HLW “generators” and “owners.” See 42 U.S.C. § 10131(a)(4) (“Congress finds that — ... the costs of such disposal should be the responsibility of the generators and owners of such waste and spent fuel.”).

By June 30,1983, the Department of Energy (“DOE”) was required to enter into contracts with the generators and owners of SNF and HLW that required DOE to accept, transport, and dispose of such SNF and HLW. See 42 U.S.C. § 10222(b)(2) (“No [SNF or HLW] may be disposed of by the Secretary ... unless the generator or owner of such [SNF or HLW] has entered into a contract with the Secretary under this section by not later than — June 30, 1983[.]”). Accordingly, DOE established a Standard Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste and set the fee amounts to be paid by utilities into the Nuclear Waste Fund to fund acceptance and disposal of SNF (hereinafter the “Standard Contract”). See 42 U.S.C. § 10222(a)(1) (“[T]he Secretary is authorized to enter into contracts with any person 4 who generates or holds title to high-level radioactive waste, or spent nuclear fuel, of domestic origin for the acceptance of title, subsequent transportation, and disposal of such waste or spent fuel. Such contracts shall provide for payment to the Secretary of fees pursuant to paragraphs (2) and (3) sufficient to offset expenditures described in subsection (d) of this section.”); see also 10 C.F.R. § 961.11 (setting forth “the text of the standard contract for disposal of spent nuclear fuel and/or high-level radioactive waste[.]”).

The Standard Contract provided, in return for the payment of fees from a utility,5 that DOE would commence disposal of SNF no later than January 31, 1998 and continue such services until disposal of all SNF and HLW was completed. See 42 U.S.C. § 10222(a)(5)(B) (“[I]n return for the payment of fees established by this section, the Secretary, beginning not later than January 31, 1998, will dispose of the high-level radioactive waste or spent nuclear fuel involved as provided in this subchapter.”); see also 10 C.F.R. § 961.11 at Art. II (“The services to be provided by DOE under this contract shall begin, after commencement of facility operations, not later than January 31, 1998 and shall continue until such time as all SNF and/or HLW from the civilian nuclear power reactors ... has been disposed of.”). To ensure that all utilities that utilized nuclear power participated in the system, Congress required that the utilities must either enter into a Standard Contract or forfeit their nuclear license to operate. See 42 U.S.C. § 10222(b)(1)(A) (prohibiting the Nuclear Regulatory Commission from renewing or issuing an operator’s license unless such operator “has entered into a contract with the Secretary” or “is actively and in good faith negotiating with the Secretary for a contract.”).

The priority of SNF and/or HLW acceptance was to be determined by the material’s age, calculated as of the date of discharge from a nuclear power reactor. See 10 C.F.R. § 961.11 at Art. VI(B)(l)(a) (“[A]cceptance priority shall be based upon the age of the SNF and/or HLW as calculated from the date of discharge of such material from the civilian nuclear power reactor.”); see also Gov’t Resp. at 8. DOE’s acceptance of SNF and/or HLW would be prioritized, pursuant to Delivery Commitment Schedules (“DCSs”) submitted by each utility and approved by DOE. See 10 C.F.R. § 961.11 at Art. V(B)(1) (“After DOE has issued its proposed acceptance priority ranking ... the Purchaser shall submit to DOE the delivery commitment schedule(s) which shall identify all SNF and/or HLW the Purchaser wishes to deliver to DOE beginning sixty-three (63) months thereafter.”); see also Gov’t Resp. at 8-9. The Standard Contract further provided that DOE first would accept the oldest SNF and/or HLW. See 10 C.F.R. § 961.11 at Art. VI(B)(1)(A) (“DOE will first accept from Purchaser the oldest SNF and/or HLW for disposal in the DOE facility, except as otherwise provided for in paragraphs B and D of Article V.”). A utility, however, had the right to [725]*725exchange approved DCSs with any other utilities that may hold a priority ranking for pickup of SNF and/or HLW, subject to DOE’s approval. See 10 C.F.R. § 961.11 at Art. V(E) (“Purchaser shall have the right to exchange approved delivery commitment schedules with parties to other contracts with DOE for disposal of SNF and/or HLW; provided, however, that DOE shall, in advance, have the right to approve or disapprove, in its sole discretion, any such exchanges.”). The Standard Contract also, provided that DOE may grant priority for removal of SNF and/or HLW from nuclear reactors that are no longer operating and accept emergency deliveries prior to the date of acceptance. See 10 C.F.R. § 961.11 at Art.

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System Fuels Inc. v. United States, 66 Fed. Cl. 722, 2005 U.S. Claims LEXIS 224, 2005 WL 1804314 (uscfc 2005).

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