Northern States Power Co. v. United States Department of Energy

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 1997 Decided November 14, 1997

No. 97-1064

Northern States Power Company, et al.,

Petitioners

v.

United States Department of Energy and

United States of America,

Respondents

IES Utilities, Inc., et al.,

Intervenors

Consolidated with

Nos. 97-1065, 97-1370, 97-1398

On Petitions for Writs of Mandamus Directed to the

United States Department of Energy

Jay E. Silberg argued the cause for utility petitioners, with

whom David J. Cynamon and Mindy A. Buren, were on the

briefs.

Don L. Keskey, Assistant Attorney General, argued the

cause for state petitioners, with whom Frank J. Kelley,

Attorney General, Thomas L. Casey, Henry J. Boynton and

Larry G. Watterworth, Assistant Attorneys General, Michi-

gan, Robert S. Golden, Jr., Assistant Attorney General, Con-

necticut, Robert D. VanDiver, General Counsel, Florida Pub-

lic Service Commission, Judith S. Yogman and Leslie Greer,

Assistant Attorneys General, Massachusetts, Rolayne Ailts

Wiest, Assistant Attorney General, South Dakota, Greg

Huwe, Assistant Attorney General, Minnesota, Michael A.

Gross, Assistant Attorney General, Florida, Mary W. Coch-

ran, General Counsel, Arkansas Public Service Commission,

Bryan G. Moorhouse, General Counsel, and Susan S. Miller,

Assistant General Counsel, Maryland Public Service Commis-

sion, Roger W. Steiner, Assistant General Counsel, Missouri

Public Service Commission, Charles F. Walker and Kevin P.

Maloney, Deputy Attorneys General, Delaware, Carla J.

Stovall, Attorney General, and John W. Campbell, Deputy

Attorney General, Kansas, Diane Munns, Acting General

Counsel, Iowa Utilities Board, Conrad Smith, Vermont, Law-

rence F. Barth, Assistant Counsel, Veronica A. Smith, Depu-

ty Chief Counsel, and John F. Povilaitis, Chief Counsel,

Pennsylvania Public Utility Commission, Steven M. Schur,

Chief Counsel, and David Ludwig, Attorney, Public Service

Commission of Wisconsin, Edward W. O'Neill and Robert C.

Cagen, Public Utilities Commission of California, Lawrence G.

Malone, Solicitor, New York State Public Service Commis-

sion, Lester M. Bridgeman, Alabama Public Service Commis-

sion, James J. Grawe, Assistant Attorney General, Kentucky,

M. Brent Hare, Assistant Attorney General, Maryland, Caro-

line Vachier and Helene S. Wallenstein, Deputy Attorneys

General, New Jersey, James R. Anderson, Assistant Consum-

er Advocate, New Hampshire, Jeffrey B. Pine, Attorney

General, Paul J. Roberti and Alan M. Schoer, Special Assis-

tant Attorneys General, Rhode Island, Shirley E. Guntharp,

Deputy Attorney General, and Charles L. Moulton, Assistant

Attorney General, Arkansas, George M. Fleming, Mississippi

Public Service Commission, L. Steven Grasz, Deputy Attor-

ney General, Nebraska, Frank Spencer, Special Assistant

Attorney General, Mississippi, Wynn E. Arnold, Assistant

Attorney General, New Hampshire, Ben Stead, Iowa, Carl

Josephson, Assistant Attorney General, Virginia, F. David

Butler, General Counsel, Public Service Commission of South

Carolina, Thomas D. Warren, State Solicitor, Maine, Charles

E. Johnson, Special Assistant Attorney General, North Dako-

ta Public Service Commission, Daniel B. Dovenbarger, Depu-

ty Attorney General, Indiana, Sammy R. Kirby, Deputy

General Counsel, North Carolina Utilities Commission,

Duane W. Luckey and Steven T. Nourse, Assistant Attorneys

General, Public Utilities Commission of Ohio, Joel H. Peck,

Senior Counsel, and C. Meade Browder, Jr., Attorney, Virgi-

nia State Corporation Commission, Gary J. Newell and Fran-

ces E. Francis, Public Systems Group, Michael R. Fontham,

and Noel J. Darce, Louisiana Public Service Commission,

Charles D. Gray, General Counsel, and James Bradford

Ramsay, Assistant General Counsel, National Association of

Regulatory Utility Commissioners, and Eric A. Eisen, Ari-

zona Corporation Commission, were on the briefs.

John A. Bryson, Attorney, U.S. Department of Justice,

argued the cause and filed the brief for respondents. Martin

W. Matzen, Attorney, entered an appearance.

William H. Chambliss, Senior Counsel, and C. Meade

Browder, Jr., Attorney, were on the brief for intervenor

Virginia State Corporation Commission.

Michael A. Bauser was on the brief for intervenor North-

east Utilities Service Company.

Before: Williams, Ginsburg and Sentelle, Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: In Indiana Michigan Power Co.

v. Department of Energy, 88 F.3d 1272 (D.C. Cir. 1996), we

held that the Nuclear Waste Policy Act ("NWPA") imposes

on the Department of Energy ("DOE") an unconditional

obligation to begin disposing of high-level radioactive waste

and spent nuclear fuel (collectively, "SNF") by January 31,

1998. After we issued our decision, DOE nonetheless in-

formed various utilities and state commissions ("petitioners")

that it would not accept the SNF for disposal by the 1998

deadline. Petitioners now seek a writ of mandamus requiring

DOE to comply with Indiana Michigan and begin disposing

of the SNF by the statutory deadline. We hold that the

Standard Contract between DOE and the utilities provides a

potentially adequate remedy if DOE fails to fulfill its obli-

gations by the deadline, and thus do not grant in full the writ

requested by petitioners. We do agree, however, that DOE's

current approach toward contractual remedies is inconsistent

with the NWPA and with our prior decision in Indiana

Michigan. We thus grant the petition in part, and issue a

writ of mandamus precluding DOE from advancing any con-

struction of the Standard Contract that would excuse its

delinquency on the ground that it has not yet established a

permanent repository or an interim storage program.

I. Background

In the NWPA, Congress, confronting the "national prob-

lem" posed by the accumulation of spent nuclear fuel and

radioactive waste produced by various domestic sources, 42

U.S.C. s 10131(a)(2), created a scheme whereby the federal

government would have the responsibility to provide for the

permanent disposal of the SNF, and the costs of such disposal

would be borne by the owners and generators of the waste

and spent fuel. 42 U.S.C. s 10131(a)(4). The plan provided

that the owners and generators of the SNF would have the

primary responsibility to provide and pay for its interim

storage until the Secretary of Energy accepts the material "in

accordance with the provisions of this chapter." 42 U.S.C.

s 10131(a)(5).

As part of this regulatory program, Congress authorized

the Secretary to enter into contracts with the owners and

generators for the acceptance, transportation, and ultimate

disposal of the SNF. 42 U.S.C. s 10222(a)(1). Congress left

open many of the terms of the contracts, but specifically

dictated, inter alia, the deadline by which DOE must begin

disposing of the SNF. In the language of the statute, the

"[c]ontracts entered into under this section shall provide that

... in 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." 42

U.S.C. s 10222(a)(5)(B). "Payment of fees" referred to hefty

contributions into a so-called Nuclear Waste Fund by owners

and generators of the SNF.

In accordance with the NWPA, DOE adopted the final

Standard Contract after notice and comment. The language

of the Standard Contract is slightly different than that of the

statute, but does include the requirement that disposal begin

by January 31, 1998: "[t]he services to be provided by DOE

under this contract shall begin, after commencement of facili-

ty operations, not later than January 31, 1998 and shall

continue until such time as all SNF and/or HLW [high-level

radioactive waste] from the civilian nuclear power reactors

... has been disposed of." 10 C.F.R. s 961.11, Art. II (1996).

In 1993, various utilities and state agencies became con-

cerned about DOE's ability to meet the 1998 deadline, and

thus asked the Department to address how it would go about

performing its responsibilities. The Department, apparently

anticipating that it would not be ready to take the SNF by

the deadline, took the position that it did not have a clear

legal obligation to accept the SNF absent an operational

repository or other facility. In its Final Interpretation of

Nuclear Waste Acceptance Issues, issued in 1995, DOE an-

nounced that it "does not have an unconditional statutory or

contractual obligation to accept high level waste and spent

nuclear fuel beginning January 31, 1998 in the absence of a

repository or interim storage facility constructed under the

[NWPA]." 60 Fed. Reg. 21,793-94. The Department also

took the position that "it lacks statutory authority under the

Act to provide interim storage." 60 Fed. Reg. at 21,794.

The utilities and the states promptly filed petitions for

review. The question before us in Indiana Michigan was

whether the legal obligation of DOE to accept SNF by

January 31, 1998, was conditioned on the presence of an

operational repository or interim storage facility. Reviewing

DOE's construction of the NWPA under the two-step analysis

of Chevron U.S.A. Inc. v. Natural Resources Defense Coun-

cil, 467 U.S. 837 (1984), we concluded that DOE's interpreta-

tion was contrary to the unambiguously expressed intent of

Congress. We reached this conclusion after analyzing the

plain language of the statute, which mandates that DOE

assume a contractual obligation to start disposing of the SNF

by January 31, 1998. We took special care to emphasize the

reciprocal nature of the obligations. DOE's duty to dispose

of the SNF in a timely manner is "in return for" the payment

of fees into the Nuclear Waste Fund. 42 U.S.C.

s 10222(a)(5)(B). We held that DOE's obligation to meet the

1998 deadline is "without qualification or condition," and

identified DOE's duty to "perform its part of the contractual

bargain." 88 F.3d at 1273. We therefore remanded the

matter to DOE for "further proceedings consistent with" our

opinion. Id. at 1277. DOE neither sought rehearing of that

decision nor petitioned the Supreme Court for further review.

After issuing our decision in Indiana Michigan, we would

have expected that the Department would proceed as if it had

just been told that it had an unconditional obligation to take

the nuclear materials by the January 31, 1998, deadline. Not

so. Quite to the contrary, the Department informed the

utilities and the states that it would be unable to comply with

the statutory deadline that this court had just reaffirmed. In

late 1996, the utilities and the states initiated discussions with

DOE and asked about the procedure and schedule that the

Department would follow to comply with the court's decision.

DOE responded to the utilities by announcing that it "will be

unable to begin acceptance of spent nuclear fuel for disposal

in a repository or interim storage facility by January 31,

1998." Utility Petitioners' Pet. at Tab 1; see also Tab 2.

The Department recognized that the delay would affect "large

number[s]" of contract holders, but nonetheless expressed

"uncertainty as to when DOE will be able to begin spent fuel

acceptance." Id. The letter ended by cordially inviting "the

views of all contract holders on how the delay can best be

accommodated." Id.

In a similar letter to the states, DOE wrote that it "under-

stands that states are concerned about the Department's

delay," and expressed an interest in talking with the states

about how to mitigate the harm caused by the delay. State

Petitioners' Pet., Att. D. DOE's letter also revealed one of

its asserted reasons for the delay: "The Administration con-

tinues to believe that interim storage siting should not pro-

ceed until the Department has the benefit of the information

resulting from the Yucca Mountain Project Viability Assess-

ment." Id. By the Department's own estimates, this Yucca

Mountain facility will not be operational until the year 2010.

Exhibits to Resp. Response, Tab 6, at 8.

On January 31, 1997, the utilities and state agencies sepa-

rately petitioned for a writ of mandamus, seeking to compel

DOE to comply with Indiana Michigan and begin disposal of

the nuclear materials by January 31, 1998. Petitioners also

requested that their payments to the Nuclear Waste Fund be

placed in escrow unless and until DOE meets its obligations

to dispose of SNF, and asked that the court prohibit DOE

from taking any punitive action toward those who suspend

payments to the Fund.

On June 3, 1997, DOE responded to comments submitted

by contract holders regarding the anticipated delay. The

Department began by recognizing that "Section 302 [of the

NWPA] specifies that the contracts shall provide for the

Department to begin to dispose of spent fuel not later than

January 31, 1998." Exhibits to Resp. Response, Tab 6, at 4.

DOE then expressed its belief that "the Standard Contract

adopted by the Department pursuant to Section 302 and

entered into by the contract holders specifies the available

remedies in the event the Department is unable to meet the

January 31, 1998 date." Id. Under Article IX of the con-

tract, the Department asserted, the Department was "not

obligated to provide a financial remedy for the delay," be-

cause the delay, in the Department's estimation, was "un-

avoidable." Id. at 2. After conceding that the delay may

result in "hardship" to contract holders, DOE expressed its

willingness "to consider amendments to individual contracts

that would mitigate the impacts of the delay particular con-

tract holders will experience in the acceptance of their spent

fuel." Id.

II. Discussion

Petitioners assert that a writ of mandamus is necessary to

force DOE to comply with Indiana Michigan and begin

acceptance of the SNF by the 1998 deadline. Their argument

rests on our prior conclusion that "section 302(a)(5)(B) [of the

NWPA] creates an obligation in DOE, reciprocal to the

utilities' obligation to pay, to start disposing of the SNF no

later than January 31, 1998." 88 F.3d at 1277. DOE has not

only failed to undertake "further proceedings consistent with"

the court's opinion, petitioners argue, but has informed them

of its plans to default on its obligations. Petitioners draw

special attention to the fact that the Department currently

accepts SNF from 41 foreign countries, from which they

conclude that DOE is not unable but is simply unwilling to

meet the 1998 deadline. They submit that a writ of manda-

mus is an appropriate remedy for the Department's refusal to

comply with Indiana Michigan and perform its duties by the

deadline set by Congress.1

We start our consideration of the petition with the observa-

tion that "[t]he remedy of mandamus is a drastic one, to be

invoked only in extraordinary situations." Allied Chemical

Corp. v. Daiflon, Inc., 449 U.S. 33, 34 (1980). Mandamus is

proper only if "(1) the plaintiff has a clear right to relief; (2)

the defendant has a clear duty to act; and (3) there is no

other adequate remedy available to plaintiff." Council of and

for the Blind of Delaware County Valley v. Regan, 709 F.2d

__________

1 The state petitioners also contend that a writ of mandamus is

warranted, wholly apart from our decision in Indiana Michigan,

under Telecommunications Research & Action Center v. F.C.C., 750

F.2d 70 (D.C. Cir. 1984) ("TRAC"). State Petitioners' Pet. at 9-12.

Because we issue a writ of mandamus to effectuate our decision in

Indiana Michigan, we decline to reach the additional question of

whether issuance of the writ would have been proper under TRAC.

1521, 1533 (D.C. Cir. 1983) (en banc). The party seeking

mandamus has the burden of showing that "its right to

issuance of the writ is clear and indisputable." Gulfstream

Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289

(1988) (internal quotations and citations omitted).

Petitioners have established that they have a clear right to

relief, and thus have satisfied the first requirement for a writ

of mandamus. As we explained in Indiana Michigan, the

NWPA requires DOE, "in return for the payment of fees," to

begin disposing of the materials "not later than January 31,

1998." 42 U.S.C. s 10222(a)(5)(B). We specifically noted

that the payment of fees into the Nuclear Waste Fund is the

"only limitation placed on the Secretary's duties" found in the

text of the statute. 88 F.3d at 1276. The owners and

generators have dutifully complied with the NWPA, pouring

billions of dollars of payments into the Fund with the expecta-

tion that DOE would live up to its end of the bargain. The

Department, on the other hand, has tersely informed the

parties that it "will be unable to begin acceptance of spent

nuclear fuel for disposal in a repository or interim storage

facility by January 31, 1998." Utility Petitioners' Pet. at Tab

1. Petitioners' full compliance with the requirements of the

NWPA, taken in conjunction with DOE's refusal to perform

its reciprocal duties, compels the conclusion that petitioners

have established a clear right to relief in this case.

The second requirement is also satisfied. DOE's duty to

act could hardly be more clear. DOE argued in Indiana

Michigan that its obligations under the NWPA were contin-

gent on the existence of a repository or interim storage

facility. We held that DOE's interpretation was inconsistent

with the text of the NWPA, which clearly demonstrates a

congressional intent that the Department assume a contractu-

al obligation to perform by the 1998 deadline, "without qualifi-

cation or condition." 88 F.3d at 1276. DOE's duty to take

the materials by the 1998 deadline is also an integral part of

the Standard Contract, which provides that the Department

"shall begin" disposing of the SNF by January 31, 1998. 10

C.F.R. s 961.11, Art. II. The contractual obligations created

consistently with the statutory contemplation leave no room

for DOE to argue that it does not have a clear duty to take

the SNF from the owners and generators by the deadline

imposed by Congress.

Although petitioners have a clear right to relief, and the

Department has a clear duty to act, we decline to issue the

broad writ of mandamus sought by petitioners because they

are presented with another potentially adequate remedy.

Although the statute does not prescribe a particular remedy

in the event that the Department fails to perform on time, the

Standard Contract does provide a scheme for dealing with

delayed performance. 10 C.F.R. s 961.11, Art. IX. Specifi-

cally, Article IX of the Standard Contract outlines how the

parties are to proceed if one party is unable to fulfill its

obligations in a timely manner. Under Article IX, unavoid-

able delays are to be treated differently than avoidable de-

lays. A failure to perform is considered "unavoidable" only if

such failure "arises out of causes beyond the control and

without the fault or negligence of the party failing to per-

form." Id. at Art. IX.A. If a party's delay is determined to

be unavoidable, that party is not liable for damages caused by

the failure to perform in a timely manner. Id. An avoidable

delay, in contrast, is caused by "circumstances within the

reasonable control" of the delinquent party. Id. at Art. IX.B.

If a party's delay is avoidable, the charges and schedules in

the contract must be equitably adjusted to reflect additional

costs incurred by the other party. Id. The contract also

provides a mechanism for resolving disputes of fact that the

parties may encounter along the way. See id. at Art. XVI.

Petitioners have not convinced us that this contractual

scheme is inadequate to deal with DOE's anticipated delay in

accepting the SNF. Petitioners have suggested that the

contractual processes are inadequate, claiming that they will

"suffer additional billions of dollars in additional costs if DOE

fails to meet its January 1998 obligation," Utility Petitioners'

Pet. at 4, and that they will not be able to recover these costs

in the contract proceedings because the Department is excus-

ing its own default. See Utility Petitioners' Reply at 2. Such

costs may in fact ensue if DOE fails to perform on time, but

there is no reason to believe that these additional expenses

will not be taken into account if the contractual processes

operate as Congress intended. See infra at 11-13. Accord-

ingly, we conclude that petitioners must pursue the remedies

provided in the Standard Contract in the event that DOE

does not perform its duty to dispose of the SNF by January

31, 1998. This conclusion, we should note, comports with our

decision in Indiana Michigan. Even though we did not enter

a remedy at that time, we suggested that the provisions of

the Standard Contract would determine the appropriate rem-

edy for the Department's failure to perform its obligations.

88 F.3d at 1277.

A writ of mandamus is required, however, to compel DOE

to comply with our prior mandate in Indiana Michigan. See

Office of Consumers' Counsel v. FERC, 826 F.2d 1136, 1140

("A federal appellate court has the authority, through the

process of mandamus, to correct any misconception of its

mandate by a lower court or administrative agency subject to

its authority."); see also Potomac Electric Power Co. v.

Interstate Commerce Comm., 702 F.2d 1026, 1032 (D.C. Cir.

1983). We held in Indiana Michigan that the NWPA impos-

es an unconditional obligation, memorialized in the Standard

Contract, to begin disposing of the materials by January 31,

1998. We rejected the Department's attempt to water-down

its obligations, finding that DOE's interpretation would "de-

stroy[ ] the quid pro quo created by Congress" and would

mean that the payment of fees into the Nuclear Waste Fund

"was for nothing." 88 F.3d at 1276. To effectuate DOE's

duty, as we recognized in Indiana Michigan, petitioners must

be able to enforce the terms of the contract in a meaningful

way. Petitioners' ability to enforce the contract would be

frustrated if DOE were allowed to operate under a construc-

tion of the contract inconsistent with our prior conclusion that

the NWPA imposes an obligation on DOE "without qualifica-

tion or condition." Id.

Viewed in this light, DOE's current approach toward con-

tractual remedies violates our directives in Indiana Michi-

gan. As explained above, the Department has endeavored to

proceed according to Article IX of the Standard Contract, by

first informing the parties of its anticipated delay, and then

evaluating whether its own delay is "unavoidable." Article IX

describes an unavoidable delay as a party's "failure to per-

form its obligations ... aris[ing] out of causes beyond the

control and without the fault or negligence of the party failing

to perform." 10 C.F.R. s 961.11, Art. IX.A. The contract

goes on to list a few examples of circumstances "beyond the

reasonable control" of the delayed party: "acts of God, or of

the public enemy, acts of Government in either its sovereign

or contractual capacity, fires, floods, epidemics, quarantine

restrictions, strikes, freight embargoes and unusually severe

weather." Id. The Contracting Officer isolated six factors

that, taken together, supposedly support the conclusion that

DOE experienced an unavoidable delay in this case: technical

problems; regulatory delays; roadblocks to implementation

of interim or monitored retrievable storage; funding restric-

tions; litigation delays; and consultation requirements. Ex-

hibits to Resp. Response, Tab 6. Reaching the preliminary

conclusion that the delay was unavoidable, the Department's

Contracting Officer let DOE off the hook for monetary dam-

ages.

The most glaring problem with DOE's position is that it is

answering the wrong question: it is attempting to explain

why it will not have a "state-of-the-art, deep geologic facility

for the permanent disposal of the Nation's spent nuclear fuel

and high-level waste" ready by 1998. Id. Put another way,

DOE's position is that its delayed performance is unavoidable

because it does not have an operational repository, and does

not have the authority to provide storage in the interim.

DOE is simply recycling the arguments rejected by this court

in Indiana Michigan. DOE unsuccessfully argued in that

case that it does not have an obligation to take the SNF in

the absence of an operational repository or other facility;

here, DOE recycles that same argument in the slightly differ-

ent form that it does not have responsibility for the costs

resulting from its failure to perform that duty because it does

not have an operational repository or other facility. As we

pointed out in Indiana Michigan, the NWPA directs DOE to

undertake the duty to begin taking the SNF by January 31,

1998, whether or not it has a repository or interim storage

facility. DOE cannot now render its obligation contingent,

and free itself of the costs caused by its delay, by advancing

the same failed position that we rejected before.

Given DOE's repeated attempts to excuse its delay on the

ground that it lacks an operational repository or interim

storage facility, we find it appropriate to issue a writ of

mandamus to correct the Department's misapprehension of

our prior ruling. Accordingly, we order DOE to proceed with

contractual remedies in a manner consistent with NWPA's

command that it undertake an unconditional obligation to

begin disposal of the SNF by January 31, 1998. More

specifically, we preclude DOE from concluding that its delay

is unavoidable on the ground that it has not yet prepared a

permanent repository or that it has no authority to provide

storage in the interim.

This necessarily means, of course, that DOE not implement

any interpretation of the Standard Contract that excuses its

failure to perform on the grounds of "acts of Government in

either its sovereign or contractual capacity." 10 C.F.R.

s 961.11, Art. IX.A. We held in Indiana Michigan that the

NWPA imposes an unconditional duty on DOE to take the

materials by 1998. Congress, in other words, directed DOE

to assume an unqualified obligation to take the materials by

the statutory deadline. Under the Department's interpreta-

tion of the governing contractual provisions, however, the

government can always absolve itself from bearing the costs

of its delay if the delay is caused by the government's own

acts. This cannot be a valid interpretation, as it would allow

the Executive Branch to void an unequivocal obligation im-

posed by Congress. DOE has no authority to adopt a

contract that violates the directives of Congress, just as it

cannot implement interpretations of the contract that contra-

vene this court's prior ruling. We hold that this provision in

the Standard Contract, insofar as it is applied to DOE's

failure to perform by 1998, is inconsistent with DOE's statu-

tory obligation to assume an unconditional duty.

III. Conclusion

In conclusion, we do not grant petitioners' broad request

for a writ of mandamus because we conclude that the remedi-

al scheme of the Standard Contract offers a potentially

adequate remedy. We do, however, grant the petition in part

because DOE has not abided by our prior conclusion that the

NWPA imposes an unconditional obligation on the Depart-

ment to begin disposal of the SNF by January 31, 1998. We

therefore issue a writ of mandamus precluding DOE from

excusing its own delay on the grounds that it has not yet

prepared a permanent repository or interim storage facility.

We retain jurisdiction over this case pending compliance with

the mandate issued herewith.