Opinion

Entergy Gulf States, Inc. v. United States

125 Fed. Cl. 678
2016 U.S. Claims LEXIS 296

Court: United States Court of Federal Claims
Filed: Apr 14, 2016
Status: Published
Author: Williams
On the bench: Mary Ellen Coster Williams
Cited by: 6 cases
Authority: More cited than 67.9%

The opinion

In the United States Court of Federal Claims

No. 03-2625C

(Filed: April 14, 2016)1

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* Spent Nuclear Fuel; Partial

ENTERGY GULF STATES, INC., and * Breach of Contract; Damages;

ENTERGY GULF STATES * Causation; Cask Loading Costs;

LOUISIANA, L.L.C., * Cask Drop Analysis; Fuel

* Handling Building Modification

Plaintiffs, *

Costs; Payroll Loaders;

v. * Materials Loaders; NRC Fees;

* Allegedly Unsupported

THE UNITED STATES, * Transactions; Partial Stay.

Defendant. *

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Alexander D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman LLP, 1650 Tysons

Boulevard, McLean, VA 22102, for Plaintiffs. Jay E. Silberg, and Clare M. Cavaliero, Pillsbury

Winthrop Shaw Pittman LLP, 1200 17th Street NW, Washington, D.C. 20036, Of Counsel. L.

Jager Smith, Jr., Jager Smith LLC, 1340 Echelon Parkway, Jackson, MS 39213, Of Counsel.

Benjamin C. Mizer, Robert E. Kirschman, Jr., Bryant G. Snee, and Eric P. Bruskin, U.S.

Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box 480, Ben

Franklin Station, Washington, D.C. 20044, for Defendant. Christopher J. Carney, Christopher K.

Wimbush, and Anand R. Sambhwani, U.S. Department of Justice, Civil Division, Commercial

Litigation Branch, P.O. Box 480, Ben Franklin Station, Washington, D.C. 20044, Of Counsel.

Jane K. Taylor, U.S. Department of Energy, Office of General Counsel, 100 Independence

Avenue, SW, Washington, D.C. 20585, Of Counsel.

The Court issued this opinion under seal on March 31, 2016, and directed the parties to

file any proposed redactions by April 14, 2016. Neither party has proposed redactions.

Accordingly, the Court publishes this Opinion correcting errata.

________________________________________________________________________

OPINION AND ORDER ENTERING PARTIAL JUDGMENT

________________________________________________________________________

WILLIAMS, Judge.

This spent nuclear fuel (“SNF”) case comes before the Court following a trial on

damages.2 Because the Government’s liability for partial breach of contract has been

established, the only issue before this Court is the quantum of damages owed to Plaintiffs.

Plaintiffs Entergy Gulf States, Inc., and its successor-entity, Entergy Gulf States Louisiana,

L.L.C., (“Plaintiffs”) seek $49,687,975 in damages incurred from January 1, 1999 through

December 31, 2010, stemming from the Department of Energy’s (“DOE”) partial breach of the

1983 Standard Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive

Waste (“Standard Contract”). The Government challenges $13,707,636 of Plaintiffs’ claim.

Based on the record developed at trial, the Court awards Plaintiffs $42,341,604 in damages.3

Findings of Fact4

The Nuclear Waste Policy Act and the Standard Contract

In 1982, Congress enacted the Nuclear Waste Policy Act (“NWPA” or “the Act”) in

response to safety and environmental concerns about the accumulation of radioactive waste. 42

U.S.C. §§ 10101-270 (2012). The Act authorized the Secretary of Energy “to enter into

Congress defined spent nuclear fuel (“SNF”) as fuel that “has been withdrawn from a

nuclear reactor following irradiation, the constituent elements of which have not been separated

by reprocessing.” 42 U.S.C. § 10101(23) (2012). SNF contains toxic uranium and byproducts,

such as plutonium, and “remains radioactive after it is removed from a nuclear reactor and must

be isolated in safe disposal facilities for thousands of years.” Sacramento Mun. Util. Dist. v.

United States, 63 Fed. Cl. 495, 496 n.2 (2005).

Like many spent nuclear fuel cases, this case was stayed pending appellate consideration

of governing legal issues. The stay was in effect from January 19, 2007 until January 19, 2010,

and reinstated from March 16, 2010 until July 22, 2010, and again from December 12, 2011 until

June 12, 2013.

The Court stays resolution of Plaintiffs’ claims for fuel characterization costs and cask

loading costs pending the Federal Circuit’s decision in System Fuels, Inc. v. United States, Nos.

2015-5094, 2015-5095 (Fed. Cir. filed Sept. 2, 2015).

These findings of fact are derived from the evidence adduced at trial and stipulations.

The Court uses “PX,” “DX,” and “JX” to designate exhibits admitted during trial and “Tr.” to

cite trial testimony. The cited exhibit page numbers are the last four digits of the Bates number

assigned to a given page or to the document’s internal page numbers or section numbers as

appropriate. Demonstrative exhibits are cited as “PDX” and “DDX.” The Court does not correct

grammatical or typographical errors in quotations from the record.

contracts with any person who generates or holds title to high-level radioactive waste, or spent

nuclear fuel [SNF] of domestic origin for the acceptance of title, subsequent transportation, and

disposal of such waste or spent fuel.” Id. at § 10222(a)(1), held unconstitutional on other

grounds by Ala. Power Co. v. U.S. Dep’t of Energy, 307 F.3d 1300, 1307-08 (11th Cir. 2002).

Pursuant to section 302 of the NWPA, utilities would enter into a Standard Contract with the

Government acting through DOE. In return for fees assessed against the utilities contracting

with DOE for disposal of spent nuclear fuel, Congress imposed on DOE the unconditional

obligation to take title to, transport, and dispose of the spent nuclear fuel generated by these

utilities no later than January 31, 1998. Id. at § 10222(a)(5)(B); JX 1, Art. II. The Act

prohibited the Nuclear Regulatory Commission (“NRC”) from issuing or renewing licenses to

utilities that had not “entered into a [Standard Contract] with the Secretary” or who were not

“actively and in good faith negotiating with the Secretary for a contract,” effectively making

such contracts mandatory for the industry. Me. Yankee Atomic Power Co. v. United States, 225

F.3d 1336, 1337 (Fed. Cir. 2000). As a result, the entire nuclear electric industry entered into

individual contracts with the Government for the disposal of spent nuclear fuel. See NWPA §

10222(b)(1)(A)(i)-(ii); see also Maine Yankee, 225 F.3d at 1337.

Pursuant to the Standard Contract, DOE is responsible for taking title to the utilities’

spent nuclear fuel and transporting the spent nuclear fuel to its facility, and each utility is

responsible for preparing and loading the spent nuclear fuel for transportation. JX 1, Art.

IV.A.2, B.1-2.; see also Energy Nw. v. United States, 641 F.3d 1300, 1302-03 (Fed. Cir. 2011)

(“Energy Northwest III”). The Standard Contract provides:

The Purchaser [the utility] shall arrange for, and provide, all preparation,

packaging, required inspections, and loading activities necessary for the

transportation of [spent nuclear fuel] and/or [high-level radioactive waste] to the

DOE facility.

JX 1, Art. IV.A.2(a).

The Standard Contract further provides:

DOE shall arrange for, and provide, a cask(s) and all necessary transportation of

the SNF and/or HLW [high-level radioactive waste] from the Purchaser’s site to

the DOE facility. Such cask(s) shall be furnished sufficiently in advance to

accommodate scheduled deliveries. Such cask(s) shall be suitable for use at the

Purchaser’s site, meet applicable regulatory requirements, and be accompanied by

pertinent information including, but not limited to, the following:

(a) written procedures for cask handling and loading, including specifications on

Purchaser-furnished cannisters for containment of failed fuel;

(b) training for Purchaser’s personnel in cask handling and loading, as may be

necessary;

and consumables needed to use and perform incidental maintenance on the

cask(s); and

(d) sufficient documentation on the equipment supplied by DOE.

JX 1, Art. IV.B.2.

The Standard Contract did not set forth the rates at which, or the order in which, DOE

would accept spent nuclear fuel from nuclear facilities. Instead, the contract required DOE to

issue annual capacity reports (“ACRs”) to establish how much fuel DOE was obligated to accept

each year, and annual priority rankings to establish the order in which DOE would allocate the

projected capacity across the nuclear facilities. Id. at Art IV.B.5(b). Pursuant to the Standard

Contract, DOE issued its first report on the acceptance rate in June 1987, and subsequent reports

in June 1988, December 1990, and December 1991. The Federal Circuit later designated the

1987 Annual Capacity Report as the official report on SNF acceptance rates for calculating rate

commitments and damages because it more accurately depicted the parties’ intent for complete

contract performance. See Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1274 (Fed.

Cir. 2008). The 1987 Annual Capacity Report included DOE’s spent nuclear fuel acceptance

rates for the first 10 years of DOE’s SNF acceptance - - from 1998 through 2007. Additionally,

as stated in the Standard Contract, the spent nuclear fuel acceptance priority among contract

holders was on an “oldest fuel first” basis - - determined by the date of permanent fuel discharge

from a licensee’s nuclear power plant. JX 1, Art. VI.B.1(a).

On August 28, 1984, Plaintiffs entered into a contract with DOE to collect and dispose of

spent nuclear fuel at River Bend Nuclear Generating Station (“River Bend”) beginning in 2006.

Second Am. Compl. ¶ 9; see JX 1. The Purchaser listed in the Standard Contract was Gulf States

Utility - - Entergy Gulf States’ name at the time the parties signed the Standard Contract.

Second Am. Compl. ¶ 2, n.3.

DOE’s Partial Breach of the Standard Contract

In 1987, Congress amended the NWPA to require DOE to develop only one permanent

geologic repository for nuclear waste - - Yucca Mountain in Nevada - - and to forbid DOE from

constructing an interim storage facility until the NRC authorized the permanent facility. Nuclear

Waste Policy Amendments Act of 1987, Pub. L. No. 100-203, §§ 5001-65, 101 Stat. 1330, 1330-

227 (codified at NWPA § 10172(a)-(b)). On February 17, 1993, DOE issued a statement

asserting that it did not have a legal obligation to accept spent nuclear fuel prior to the operation

of a permanent fuel repository. Sys. Fuels, Inc. v. United States, 125 Fed. Cl. 331, 336 (2016).

At this point, the utilities estimated that DOE would not have a functioning repository until 2010.

Id.

On April 28, 1995, DOE issued its “Final Interpretation” of its obligation under the

Standard Contract that it would not begin accepting spent nuclear fuel by the January 31, 1998

deadline and did not have an unconditional obligation to commence performance on that date.

Office of Civilian Radioactive Waste Mgmt; Nuclear Waste Acceptance Issues, 60 Fed. Reg.

21,793, 21,794-95 (May 3, 1995). Utilities challenged this Final Interpretation in the United

States Court of Appeals for the District of Columbia (“D.C. Circuit”). Ind. Mich. Power Co. v.

Dep’t of Energy, 88 F.3d 1272, 1274 (D.C. Cir. 1996). Finding that the NWPA created an

unconditional obligation for DOE to commence acceptance of spent nuclear fuel by 1998, the

D.C. Circuit vacated and remanded DOE’s Final Interpretation. Id. at 1277.

Nevertheless, DOE notified utilities that it would not timely accept spent nuclear fuel

because it was bereft of a permanent or temporary repository. DOE asserted that under Article

IX of the Standard Contract, the “unavoidable delays” clause, its delay in collecting SNF was not

compensable. Utilities subsequently petitioned the D.C. Circuit for review and a writ of

mandamus to compel DOE to fulfill its statutory obligation. In Northern States Power Co. v.

United States Department of Energy, the D.C. Circuit reaffirmed that DOE had an unconditional

obligation to accept spent nuclear fuel by 1998, and issued a limited writ of mandamus

“precluding DOE from advancing any construction 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.” 128 F.3d 754, 756 (D.C. Cir. 1997). This order did not require specific

performance or impose any contractual remedies, which remained within the purview of the

United States Court of Federal Claims. Neb. Pub. Power Dist. v. United States, 590 F.3d 1357,

1376 (Fed. Cir. 2010) (en banc). The Federal Circuit later afforded this ruling res judicata effect

on the issue of liability. Id. at 1363-65, 1376.

On August 31, 2000, the Federal Circuit held that the Government breached every

Standard Contract it had entered into upon failure to commence the collection of spent nuclear

fuel on January 31, 1998. Maine Yankee, 225 F.3d at 1342-43. This failure to begin collecting

spent nuclear fuel in 1998 constitutes a partial breach of the Standard Contract. Yankee Atomic,

536 F.3d at 1280.

Nevertheless, the Government has continued to push back the date it would collect and

dispose of spent nuclear fuel, and in the Fiscal Year 2010 federal budget, announced that the

program to construct a federal repository for spent nuclear fuel disposal at Yucca Mountain was

terminated. The Government continued to collect the fees required by the Standard Contract

from the utilities until November 19, 2013, when the D.C. Circuit ordered the Secretary of

Energy to submit a proposal to Congress to change the fee to zero. See Nat’l Ass’n of

Regulatory Util. Comm’rs v. U.S. Dep’t of Energy, 736 F.3d 517, 521 (D.C. Cir. 2013).

Plaintiffs allege that they paid more than $152.5 million into the Nuclear Waste Fund as of

December 31, 2010. Second Am. Compl. ¶ 9.

River Bend Power Plant

River Bend is a boiling water reactor (“BWR”) located in Saint Francisville, Louisiana.

The NRC issued an operating license to River Bend in November 1985. Id. at ¶ 2. A BWR

produces electricity by using the heat generated by nuclear reactions within the reactor core to

convert water to steam, which is passed through a series of turbines to produce electricity. Tr.

160, 1677. River Bend’s nuclear reactor holds 624 fuel assemblies. Id. at 114. A fuel assembly

is a group of approximately 14-foot zirconium rods that contain uranium fuel pellets. Id. at 50,

160-61. Every 24 months, River Bend must replace one-third to one-half of the fuel assemblies

in the reactor to remove spent fuel and load new fuel. Id. at 51. The reactor cannot continue to

generate electricity if spent fuel is not unloaded. Id.

The spent fuel assemblies are stored underwater in stainless-steel racks in a spent fuel

pool. Id. at 560. Spent fuel must be kept underwater because it contains highly radioactive

fission products. Id. at 51-52. River Bend has two pools for underwater or “wet” spent fuel

storage: the main spent fuel pool and a second “upper” pool used for full core off-loads. Id. at

560. The main spent fuel pool is connected to a third, separate pool by a gated channel. Id. at

576. This third pool, called the “cask pool,” is used to load spent fuel assemblies into casks for

storage or transportation. The cask pool has two levels of elevation, or “shelves” - - the upper

shelf, which is at a depth of 20 feet, and the lower shelf, which is at a depth of 43 feet. Id. at

1121; PDX 30.

River Bend is equipped with a cask handling crane located in the eastern end of the fuel

handling building. PX 29 at 9.1-39. This cask handling crane, which was included in the plant’s

original design, is capable of lifting 125 tons on its main hook and travels in a north-south

direction. Id. The crane was designed to be operated from an operator’s cab built under the

main trolley. Id. The primary function of the cask handling crane is to lift and transfer spent

fuel transportation casks. Id.

In 1999, upon realizing that DOE would not begin collecting spent fuel by 2006,

Plaintiffs began evaluating options to increase the capacity of the River Bend spent fuel pool.

Tr. 559-60. River Bend forecasted running out of storage space in its spent fuel pool by 2006.

PX 320 at 8599. Plaintiffs considered several options, including reracking the upper pool,

reracking the main pool, fuel consolidation, extending the storage pool, and dry fuel storage, and

ultimately determined that dry fuel storage was the most prudent route. Id. at 8600-05. Dry fuel

storage is “a method of spent fuel storage that removes older spent fuel from the pool and stores

it in metal canisters with a concrete overpack. This method permanently removes the fuel from

the pool enabling continued operation without modifications to the pool or its associated

systems.” Id. at 8604. Plaintiffs increased their storage capacity by designing, constructing, and

operating a 10 C.F.R. Part 72 storage facility, otherwise known as an Independent Spent Fuel

Storage Installation (“ISFSI”), which was ready for use in 2005.5 Tr. 1380.

Plaintiffs selected Holtec International (“Holtec”) to supply the cask system that

Plaintiffs used for dry fuel storage. Id. at 93. Specifically, Holtec supplied Plaintiffs with the

HI-STORM 100 MPC-68 cask system.6 Id. at 1574. The HI-STORM overpack is a steel shell

filled with concrete that holds the Multi-Purpose Canister - - a steel enclosure with a welded lid

that holds 68 spent fuel assemblies - - and provides radiation shielding and protection. Id. at 131,

204. The HI-STORM lid is also made of steel and concrete and is bolted to the body of the HI-

STORM. PX 63 at 1.2-6-7. The HI-TRAC is used inside the fuel handling building to protect

the Multi-Purpose Canister while it is being moved into the cask storage area to be loaded with

fuel. The HI-TRAC is also used to transfer the Multi-Purpose Canister into the HI-STORM. Id.

at Table 1.0.1. The HI-TRAC has lifting trunnions that attach to a device called a lift yoke,

which can be attached to the fuel handling building’s cask handling crane. Tr. 173. Another

feature of the HI-TRAC is a removable “pool lid” bottom that allows the Multi-Purpose Canister

to be moved out of the HI-TRAC and into the HI-STORM. Id. Plaintiffs use their existing cask

handling crane to lift and move the Holtec casks during loading operations. PX 3 at 15.

During the claim period, Plaintiffs procured a total of 15 Holtec HI-STORM 100 MPC-

68 dry fuel storage casks. Tr. 136-37. In December of 2005, Plaintiffs loaded the first dry cask

The NRC regulations at 10 C.F.R. Part 71 govern the transportation of nuclear fuel, while

Part 72 governs the storage of spent fuel.

HI-STORM is an acronym for Holtec International storage module. Tr. 131.

with fuel from the pool, and subsequently loaded two more casks in 2006. PX 126. In addition,

Plaintiffs loaded four casks in 2007, another four casks in 2008, and four more casks in 2010. Id.

Discussion

Damages for Partial Breach of Contract

The remedy for breach of contract is an award of “damages sufficient to place the injured

party in as good a position as it would have been had the breaching party fully performed.”

Indiana Michigan Power Co., 422 F.3d at 1373. Mitigation damages are intended to reimburse a

non-breaching party for the expenses it incurred in attempting to rectify the injury caused by the

breach. In particular, mitigation damages are available to compensate plaintiffs for “efforts to

avoid damages in contemplation of a partial breach.” Id. at 1375 (“Mitigation is appropriate

where a reasonable person, in light of the known facts and circumstances, would have taken

steps to avoid damage.”); see generally Restatement (Second) of Contracts § 347 cmt. c (Am.

Law Inst. 1981) (“[T]he injured party is entitled to recover for all loss actually suffered . . .

includ[ing] costs incurred in a reasonable effort, whether successful or not, to avoid loss.”).

Damages should not place the non-breaching party “in a better position . . . than if there had been

no breach.” Bluebonnet Sav. Bank, FSB v. United States, 339 F.3d 1341, 1345 (Fed. Cir. 2003)

(per curiam); see also San Carlos Irrigation & Drainage Dist. v. United States, 111 F.3d 1557,

1563 (Fed. Cir. 1997). Damages for a breach of contract are recoverable if they were reasonably

foreseeable, were substantially caused by the breach, and are shown with reasonable certainty.

Indiana Michigan Power Co., 422 F.3d at 1373. In an action for partial breach of contract, any

damages claimed must be reasonably foreseeable by the defendant at the time the contract was

executed. See Citizens Fed. Bank v. United States, 474 F.3d 1314, 1321 (Fed. Cir. 2007); see

also Indiana Michigan Power Co., 422 F.3d at 1373.

Plaintiffs may recover damages for partial breach of the Standard Contract if they can

show that “but for the breach, the alleged damages would not have been suffered.” San Carlos

Irrigation & Drainage Dist., 111 F.3d at 1563. The Federal Circuit has expressed a preference

for this traditional “but-for” test in spent nuclear fuel cases. See Yankee Atomic, 536 F.3d at

1272-73. Although a plaintiff must show that the claimed losses “would not have occurred but

for the breach,” the breach need not be the sole cause of the incurred damages. Cal. Fed. Bank v.

United States, 395 F.3d 1263, 1268 (Fed. Cir. 2005); Anchor Sav. Bank, FSB v. United States,

81 Fed. Cl. 1, 60 (2008).

In order to establish that the breach caused their damages, Plaintiffs must present a

“comparison between the breach and non-breach worlds.” Yankee Atomic, 536 F.3d at 1273.

The plaintiff bears the burden of proving “the extent to which his incurred costs differ from the

costs he would have incurred in the non-breach world.” Energy Northwest III, 641 F.3d at 1306.

Therefore, “a plaintiff seeking damages must submit a hypothetical model establishing what its

costs would have been in the absence of breach.” Id. at 1305 (citing Glendale Fed. Bank, FSB v.

United States, 239 F.3d 1374, 1380 (Fed. Cir. 2001) (“Glendale I”)). “It is only by comparing

this hypothetical ‘but-for’ scenario with the parties’ actual conduct that a court can determine

what costs were actually caused by the breach, as opposed to costs that would have been incurred

anyway.” Id. (citing Glendale I, 239 F.3d at 1380); see also Yankee Atomic, 536 F.3d at 1273.

To show damages with reasonable certainty “it is not essential that the amount [of

damages] be ascertainable with absolute exactness or mathematical precision: ‘It is enough if the

evidence adduced is sufficient to enable a court or jury to make a fair and reasonable

approximation.’” Bluebonnet Sav. Bank, FSB v. United States, 266 F.3d 1348, 1355 (Fed. Cir.

2001) (quoting Elec. & Missile Facilities, Inc. v. United States, 189 Ct. Cl. 237 (1969)).

Recovery for speculative damages is precluded. Indiana Michigan Power Co., 422 F.3d at 1373;

see also Glendale Fed. Bank, FSB v. United States, 378 F.3d 1308, 1313 (Fed. Cir. 2004).

“[T]he defendant may eliminate or reduce the alleged damages by showing either that the

‘[p]laintiffs did not undertake reasonable mitigation efforts, or that the efforts they did undertake

were unreasonable.’” Entergy Nuclear Vt. Yankee, LLC v. United States, 95 Fed. Cl. 160, 184

(2010), aff’d in part, rev’d in part on other grounds sub nom. Vt. Yankee Nuclear Power Co. v.

Entergy Nuclear Vt. Yankee, LLC, 683 F.3d 1330 (Fed. Cir. 2012) (“Vermont Yankee I”) (citing

Carolina Power & Light Co. v. United States, 82 Fed. Cl. 23, 44 (2008)) (alteration in original).

Categories of Challenged Damages

Defendant asserts that Plaintiffs’ claimed damages of $49,687,975 should be reduced by

the following unrecoverable costs:

1) $3,122,653 for site modifications to handle a heavy load;

2) $1,075,196 for site modifications to handle a dry storage cask;

3) $5,702,669 for cask loading costs;

4) $267,289 in payroll loader costs;

5) $98,548 in materials loader costs;

6) $210,444 in allegedly unsupported costs;

7) $1,644,251 in additional security costs; and

8) $1,586,586 in NRC Part 171 fees.

The parties stipulated that, except for the category of allegedly unsupported costs, Plaintiffs’

damages claims are “supported by adequate contemporaneous documentation to demonstrate that

such costs were incurred for the particular activity to which they have been assigned in

Plaintiffs’ accounting system.” Joint Stip. ¶ 4.

Site Modifications to Handle a Heavy Load

In order to implement dry storage, Plaintiffs made certain modifications to the plant

equipment and fuel handling building, including site modifications to handle a heavy load and

site modifications to handle a Holtec cask. Defendant contests $3,122,653 in costs that Plaintiffs

incurred for modifications to the River Bend plant to handle heavy loads. These modifications

entailed:

1) Updating River Bend’s safety analysis report;

2) Performing a cask drop analysis;

3) Purchasing and installing impact limiters and redundant rigging;

4) Performing a seismic analysis of the cask handling crane;

5) Performing “commercial grade dedication,” or special quality control tests, to

River Bend equipment;

6) Procuring a cask lift yoke extension; and

7) Installing a remote control system for operation of Plaintiffs’ fuel handling

building cask handling crane.

Defendant contends that Plaintiffs would have made these modifications in the non-breach

world.

Plaintiffs’ Updated Safety Analysis Report, Cask Drop Analysis, Impact

Limiters and Redundant Rigging

Plaintiffs seek $1,680,170 for costs incurred to amend their Updated Safety Analysis

Report (USAR), perform a cask drop analysis, and purchase and install impact limiters and

redundant rigging at River Bend in 2005.7 Plaintiffs argue that they undertook these activities to

accommodate the Holtec cask system but that these activities would not have been necessary if

an NRC-licensed transportation cask had been provided by DOE. The parties agreed that these

three activities should be analyzed together for the purpose of assessing damages. Joint Stip. ¶

6(a).

USAR

The USAR is the original licensing basis document for the plant. The USAR contains

descriptions of the plant’s design and equipment, and any calculations and analyses supporting

the plant’s compliance with governing NRC regulations and recommendations. Tr. 1747. When

Plaintiffs implemented dry storage at River Bend, they submitted an application to update their

USAR so that their license would reflect that no drop of a Holtec cask would have unacceptable

consequences on the integrity of the fuel, the structure of the cask, or the structure of the plant

itself. Plaintiffs updated their license in accordance with NUREG-0612, the NRC guideline that

governs control of “heavy loads” - - including spent fuel casks and cask lids - - at nuclear power

plants. Id. at 586. Specifically, NUREG-0612 provides that a plant can demonstrate its ability to

handle a “heavy load” by testing the consequences of a cask drop on the equipment and

structures that effectuate a safe shutdown of the nuclear reactor. DX 3 at 5.1.1. The parties

referred to this equipment alternately as “safe shutdown equipment,” “safety-related equipment,”

or “safety-related structures, systems, and components.” See, e.g., Tr. 605, 650, 1720.

NUREG-0612 provides that a nuclear plant can demonstrate compliance either by lifting

a heavy load using a single-failure-proof crane, or by installing appropriate safety equipment

The parties stipulated that Plaintiffs’ claim for these activities consists of $1,680,170 in

adequately supported costs plus $138,984 in allegedly unsupported costs. Joint Stip. ¶¶ 4, 6(a).

where a cask drop analysis indicated that a drop of the cask would cause damage to the cask,

fuel, or “safety related equipment” of the plant.8 Id. at 1723; JX 26, Attach. 4 at 1. Plaintiffs’

cask handling crane is not single-failure-proof. JX 26, Attach. 1 at 1. Plaintiffs chose not to

upgrade the existing cask handling crane to make it single-failure-proof, but instead updated their

USAR by performing a cask drop analysis for a Holtec cask. Id. Based on the results of that

cask drop analysis, Plaintiffs employed mitigation measures - - installing impact limiters in two

places in the plant and attaching redundant rigging links to the cask handling crane where

necessary. Tr. 1111-14.

Cask Drop Analysis

Plaintiffs performed a cask drop analysis in 2005, to evaluate potential drops of a Holtec

cask in support of their application to amend their USAR. To qualify for their original operating

license, Plaintiffs had conducted an original cask drop analysis in 1985, to determine the effect

that a dropped transportation cask would have on their plant structure at three locations along the

haul path. Id. at 1773. This 1985 cask drop analysis assumed a hypothetical drop of a

transportation cask with a diameter of 10 feet, weighing between 75 and 125 tons. PX 871 at

1202-03. The conclusion of the 1985 cask drop analysis was that a drop of a 10 C.F.R. Part 71

certified DOE transportation cask within these dimensions would not have caused unacceptable

damage to either the fuel or the plant’s structure and equipment. PX 29 at 9.1-70. Plaintiffs used

the results of this cask drop analysis to substantiate the statement made in their USAR that the

River Bend fuel handling building design was based upon a cask with the approximate

dimensions of 12 feet in diameter and 18 feet in length, with a maximum loaded weight of

approximately 125 tons. PX 3 at 19. Despite the apparent discrepancy between the diameters of

the hypothetical casks in the 1985 cask drop analysis and the hypothetical cask in Plaintiffs’

USAR, the NRC approved River Bend to handle heavy loads based on the 1985 cask drop

analysis. PX 230.

The 1985 cask drop analysis did not address potential drops of the Holtec cask or the

Holtec cask lid over sensitive plant equipment. Tr. 605. Although the total weight of a loaded

Holtec cask and lid did not exceed 125 tons - - the maximum weight Plaintiffs’ existing cask

handling crane could handle - - Ms. Eve Clevenger,9 a senior engineer at River Bend, and Ms.

Eileen Supko,10 Plaintiffs’ technical expert, explained that the HI-STORM system is more

Single-failure-proof means that the crane is made so that no single component could fail

and allow the load to drop. Tr. 1108.

Ms. Clevenger is employed by Entergy Operations, Inc. as a senior engineer and has

worked in this position since 2005. Id. at 536-37. Ms. Clevenger began working at the River

Bend plant in 1992, as an engineer in the licensing department. Id. at 540.

Ms. Supko was qualified as an expert in nuclear fuel management, spent nuclear fuel

storage and transportation, and associated nuclear plant modifications and regulatory

requirements. Id. at 1079. Ms. Supko is currently employed as the president of Energy

Resources International (“ERI”), a nuclear fuel cycle consulting company. Id. at 1048. She

received a bachelor of science in nuclear engineering from Pennsylvania State University in

1985, and worked as a fuel projects engineer and in-core analysis engineer for the Carolina

vulnerable than a shipping or transportation cask. Id. at 593, 605-06, 1183, 1194-95. As Ms.

Clevenger testified, “[t]he HI-TRAC is not as robust as a transportation cask. It can’t take that

high of a drop. It would damage the cask itself.” Id. at 593. In a similar vein, Ms. Supko

testified that “the HI-TRAC transfer cask is not a transportation cask and . . . can’t . . .

necessarily withstand certain drops because of . . . the way that it is designed. It’s not meant to .

. . withstand the same kinds of drops as a transportation cask.” Id. at 1194-95. As a result,

Plaintiffs had to conduct an additional cask drop analysis to determine how a Holtec cask and its

fuel would be affected if that cask were dropped. Id. at 238-39.

Ms. Clevenger testified that Plaintiffs had not performed this analysis as part of their

original USAR, because in the non-breach world, DOE would have supplied Plaintiffs with a 10

C.F.R. Part 71 transportation cask that was required under NRC regulations to be capable of

withstanding a 30-foot drop onto an unyielding surface without damage to the cask or the fuel.

Id. at 584-85. As such, Plaintiffs had to update their USAR to reflect their ability to lift a Holtec

cask without an accidental drop damaging the fuel, the cask, or the plant.

Upon conducting a cask drop analysis for the Holtec cask system, Plaintiffs discovered

that there were two points along the haul path where the drop of a Holtec cask would cause an

unacceptable amount of damage to the cask and the fuel inside, requiring Plaintiffs to install

impact limiters and redundant rigging. Id. at 587-88.

Impact Limiters and Redundant Rigging

Because there was insufficient room to install impact limiters along the entirety of the

haul path, Plaintiffs installed impact limiters at the points of the biggest drops: in the lower shelf

of the cask pool and at the bottom of the cask washdown pit. Id. at 1103. Impact limiters are

rectangular cushioning devices made of energy-absorbing material that are used to protect a

surface from a drop or sudden deceleration. Id. at 202, 207. Because a Holtec cask is generally

not as robust as a transportation cask, the impact limiters function to “absorb or cushion the

drop” of the cask to avoid damaging the fuel inside the cask. Id. at 207.

Where Plaintiffs were not able to install impact limiters, they attached “redundant

rigging” links to their cask handling crane. Redundant rigging links are load-bearing structural

connections capable of holding the full 125-ton load of the crane in the event the crane is unable

to hold the load. JX 22 at 9151. Redundant rigging effectively makes the River Bend cask-

handling crane temporarily single-failure-proof while the links are engaged. Tr. 1113.

Defendant contends that Plaintiffs would have incurred the costs for amending the

USAR, performing a cask drop analysis, and installing impact limiters and redundant rigging in

the non-breach world and challenges Plaintiffs’ model of the non-breach world for three reasons.

Power & Light Company. Id. at 1048-49; PX 3 at B-4. Ms. Supko began working for ERI in

1990, as a consultant. Tr. 1048; PX 3 at B-3. Ms. Supko provides consulting services associated

with nuclear fuel management, spent nuclear fuel management, radioactive materials and spent

fuel transportation, and radioactive materials and spent fuel disposal. Tr. 1052. From 1990 to

2004, Ms. Supko “was a direct participant in technical exchanges between the nuclear industry

and DOE . . . .” PX 1 at 3.

First, Defendant argues that Ms. Supko failed to evaluate whether any of the DOE-supplied casks

that she identified as “suitable for use” at the River Bend plant would fall within the parameters

of the 1985 cask drop analysis. According to Ms. Supko, River Bend’s licensing documents

certified that River Bend could handle up to an 18-foot long, 125-ton transportation cask with a

12-foot diameter without the need for facility modifications or revisions to the plant license - -

including the 1985 cask drop analysis. PX 3 at 11-12. Ms. Supko opined that in the non-breach

world, Defendant would have brought a Part 71-certified transportation cask to River Bend that

met the cask parameters in River Bend’s USAR and identified four examples of such DOE-

supplied transportation casks. Id.

Defendant points out that, while the River Bend USAR reflects that the plant is licensed

to handle a transportation cask of up to 12 feet in diameter, the 1985 cask drop analysis used a

hypothetical cask with a diameter of 10 feet. Defendant appears to argue that the discrepancy

between the cask diameter described in the USAR - - a maximum of 12 feet - - and the cask

diameter tested in the 1985 cask drop analysis - - 10 feet - - somehow created an obligation for

Plaintiffs to evaluate any cask with a diameter of less than 12 feet against the 1985 cask drop

analysis. In her expert report, Ms. Supko identified four possible transportation casks that DOE

could have brought to River Bend in the non-breach world, all of which had a diameter of less

than 12 feet. PX 3 at 12. Defendant contends that because Ms. Supko did not evaluate these

four hypothetical casks against the 1985 cask drop analysis, Plaintiffs have not proven that the

River Bend license covers a drop of a transportation cask with a diameter of less than 10 feet. As

such, Defendant contends that Plaintiffs would need to conduct additional analyses and plant

modifications to safely load casks in the non-breach world. Id. at 14. However, Defendant cites

no evidence supporting its speculation that the 10-foot diameter casks would not fall within the

River Bend design basis.

In contrast, Ms. Clevenger testified:

Q: If the cask were smaller in diameter, would the River Bend design basis still

bound the handling of that cask?

A: Yes.

Q: Why?

A: Because of the way the analysis is done. The diameter of the cask is

insignificant compared to the design of the facility. We have a lot of margin in

our concrete. We put a lot of concrete into the fuel building. It’s designed with a

large factor of safety. You only get one shot at pouring your concrete and, so,

you want to make sure that there’s no future concerns with that.

Tr. 585-86.

Given this testimony and the record as a whole, Defendant’s vague suggestion that

Plaintiffs would be required to conduct additional cask drop analyses in the non-breach world is

not borne out by the record. Moreover, as Plaintiffs argue, because DOE agreed to supply a

transportation cask “suitable for use” at River Bend under the Standard Contract, Plaintiffs

would not have needed to amend the plant’s licensing basis or make modifications to the

structure of the plant in the non-breach world. JX 1, Art. III.B.1. Plaintiffs argue that the

Standard Contract term “suitable for use” means that the transportation cask may be used without

modifications to the site. In support of this interpretation, Plaintiffs rely on the testimony of Mr.

Frank Rives,11 Entergy’s manager for the Standard Contract, who testified that a cask “suitable

for use” at River Bend is one that “does not require plant modifications, does not require - - it

doesn’t require to add things, to change things at the site in order to deal with it.” Tr. 78. To that

end, Ms. Supko opined that DOE would have been able to select one of at least four

transportation casks that were suitable for use at the River Bend site and also fell within the cask

handling parameters identified in River Bend’s licensing basis. PX 3 at 12.

The Court credits Mr. Rives’ testimony that a cask that is “suitable for use” does not

require plant modifications, as well as Ms. Supko’s opinion that a DOE-supplied transportation

cask “suitable for use” at River Bend would not have required Plaintiffs to make revisions to the

plant license or facility modifications. Id. at 19; Tr. 78; see also Ala. Power Co. v. United States,

119 Fed. Cl. 615, 634 (2014) (“The term ‘suitable for use,’ read along with the government’s

obligation to provide equipment ‘needed to use’ the casks, implies that the casks chosen would

not require major building renovations.”) (alteration in original). As a result, Plaintiffs would

not have needed to conduct an additional cask drop analysis or install impact limiters or

redundant rigging or amend their USAR in the non-breach world.

Second, Defendant argues that Ms. Supko’s opinion is flawed because she misunderstood

that there were “no safety related structures, systems, or components in the [cask’s] load path

associated with cask loading operations,” and she erroneously concluded that “[t]herefore, the

[1985] load drop analysis concerns only the impacts of a drop on the cask and its contents.” PX

3 at 19; Def.’s Post-Trial Br. 15. However, the record indicates that there are two safety-related

structures - - one safety-related pipe and some safety-related electrical cables that run underneath

the floor of the cask washdown pit, which are on the cask’s haul path during loading operations.

Tr. 649-50. According to Defendant, this mistake led Ms. Supko to conclude erroneously that

Plaintiffs would not have been required to analyze the effect of a cask drop on the plant itself in

the non-breach world.

However, regardless of whether the cask’s haul path traverses safe shutdown equipment,

Plaintiffs’ witnesses testified that a drop of a DOE-supplied transportation cask would not cause

unacceptable harm to any of the plant’s safe shutdown structures or equipment. Mr. Jerrell

Campbell,12 a senior project manager for Plaintiffs, credibly testified that, based on his review of

the 1985 cask drop analysis, the River Bend plant “was designed to handle the drop of a cask

weighing up to 125 tons, or 250,000 pounds, without damage to the structures underneath.” Id.

at 414. Ms. Eve Clevenger, a senior engineer, elaborated:

Our [1985 cask drop] analysis showed that the floor was unaffected and that the

structure in the bottom of the cask washdown pit -- that the drop onto the bottom

Mr. Rives is employed by Entergy Services, Inc. as the Director of Nuclear Fuels and has

worked in this position for approximately 27 years. Tr. 46-48. Mr. Rives is the contract

manager for Entergy’s contracts with DOE. Id. at 48.

Mr. Campbell is employed by Entergy Operations, Inc. as the senior project manager for

dry fuel storage and has worked in this position since 2003. Id. at 97. Mr. Campbell has worked

at the River Bend plant since 1979. Id.

of the cask washdown pit was acceptable. Why would we need to analyze

something past that? If the cask can’t damage the floor, there’s no way it can get

to the pipe tunnel below or affect any of that equipment below.

Id. at 652.

The Court credits Ms. Clevenger’s and Mr. Campbell’s testimony that, since the original

cask drop analysis showed that the floor of the cask washdown pit would be unaffected by a

transportation cask drop, Plaintiffs would have no reason to analyze whether a transportation

cask drop could damage equipment underneath the floor. Id. at 414, 652. Ms. Supko’s

misunderstanding that there were no safe shutdown components along the cask’s haul path does

not affect her conclusion that the drop of a DOE-supplied transportation cask would have

acceptable results at the River Bend plant. Thus, Plaintiffs would not have had to conduct

additional cask drop analyses in the non-breach world to test the effects of a drop on the safe

shutdown equipment.

Third, Defendant argues that Ms. Supko’s non-breach world model is flawed because

Plaintiffs would be required in the non-breach world to conduct a cask drop analysis to account

for the consequences of a transportation cask drop when the cask is not in its transportation ready

configuration. The parties do not dispute that DOE would have provided Plaintiffs with a Part

71-certified transportation cask in the non-breach world. Id. at 556, 1848. However, Defendant

submits that a transportation cask’s Part 71 certification only addresses the effects of a cask drop

on the fuel and the cask itself when the cask is in its “transportation ready configuration” - - that

is, when the cask lid is closed and bolted, with all cask closures secured and any DOE-supplied

impact limiters installed. The parties do not dispute that, in the non-breach world, the Part 71-

certified, DOE-supplied transportation cask would not be in the transportation ready

configuration throughout the loading process at River Bend. Id. at 1243; DX 98 at 7.

Defendant contends that it would be Plaintiffs’ responsibility to ascertain that no drop of

a DOE-supplied transportation cask from the cask handling crane would unacceptably damage

the cask itself or the fuel inside the cask. In support of its argument, Defendant cites a 1999

NRC Information Notice stating: “[w]hen a cask is moved in other than the transportation ready

configuration, a plant-specific analysis would be necessary to determine that the consequences

[to the cask and fuel] are bounded by the current design basis of the plant.” DX 23 at 0359.

Defendant relies on the interpretation of its technical expert, Mr. Warren Brewer, 13 that “the Part

71 licensing analysis done is not done for the cask being other than a transportation ready

configuration. So, again, the analysis of Part 71 is . . . an analysis of the cask in its transportation

ready configuration. Any other configuration has not been demonstrated . . . .” Tr. 1745. Thus,

Defendant argues that a plant cannot rely on a DOE-supplied transportation cask’s Part 71

certification to satisfy the requirements of NUREG-0612 and must conduct its own analysis of

Mr. Brewer was qualified as an expert in nuclear engineering, including nuclear power

plant systems, operations, regulations, and modifications. Id. at 1709-10. Mr. Brewer has a

master of science degree in nuclear engineering from Massachusetts Institute of Technology, and

a bachelor of science degree in electrical engineering from Louisiana Tech University. Id. at

1675. He also completed a course of study at the Bettis Reactor Engineering School. Id. Mr.

Brewer has worked in the nuclear industry for approximately 40 years. Id. at 1676. He is a

founder and owner of ABZ, Inc., an engineering management consulting company. Id. at 1675.

the impact of a transportation cask drop on the fuel and the cask itself when the cask is not in the

transportation ready configuration.

In response, Plaintiffs state, “[u]nder the Standard Contract, DOE would have brought a

cask to River Bend that was suitable for the River Bend site and thus was within River Bend’s

original licensing basis and would not require Plaintiffs to conduct additional cask drop

analyses.” Pls.’ Post-Trial Reply 16. The Court agrees. Defendant attempts to impose too

heavy a burden on Plaintiffs in using a DOE-supplied transportation cask when it was DOE’s

responsibility under the Standard Contract to provide a transportation cask that had features that

fell within the cask handling parameters identified in River Bend’s USAR and that was suitable

for use at River Bend.

Plaintiffs are awarded $1,680,170 for costs incurred to amend their Updated Safety

Analysis Report (USAR), perform a cask drop analysis, and purchase and install impact limiters

and redundant rigging.

Seismic Analysis of Plaintiffs’ Cask Handling Crane

Plaintiffs claim $361,845 for correcting an error in the original seismic analysis that they

performed on their cask handling crane to determine the effect of an earthquake on cask loading

operations.14 Tr. 36.

In 2005, in preparation for implementing the dry fuel storage system at River Bend,

Plaintiffs conducted a comprehensive review of River Bend’s original design and construction

documents. JX 22 at 9147. During their review, Plaintiffs discovered that the seismic analysis

included in the plant’s original design documents analyzed the effect of an earthquake on the

cask handling crane without a load hanging from the hook. Id. at 9149. Although the NRC did

not require Plaintiffs to have documentation proving that their cask handling crane could hold a

cask during an earthquake, Plaintiffs were concerned that if a loaded cask fell from a crane

during an earthquake, any leaking fuel could potentially release radiation into the plant. Tr. 594,

612. Therefore, Plaintiffs redid their seismic analysis. Id. at 613. In Ms. Clevenger’s words,

Plaintiffs redid their seismic analysis because “[i]t provided additional assurance to the regulator

that the crane was suitable” for lifting dry fuel storage casks. Id. As a result of this seismic

analysis, Plaintiffs concluded that two structural welds on their cask handling crane had to be

upgraded to hold a dry storage cask during an earthquake. Id. at 612-13. Plaintiffs therefore

upgraded the two welds on their crane where the main girt is attached to the two end trucks. JX

22 at 9149.

Plaintiffs contend that they would not have performed a new seismic analysis or

upgraded the two welds in the non-breach world because River Bend’s original 1985 cask drop

analysis accounted for the drop of a Part 71-certified transportation cask during an earthquake.

Thus, if Defendant provided a transportation cask “suitable for use” at River Bend, Plaintiffs

would not have needed to review the seismic qualifications of the crane. Tr. 611-12.

The parties stipulated that Plaintiffs’ claim for performing the seismic analysis

calculations and replacing two welds in the cask handling crane consists of $361,845 in

adequately supported costs, plus $6,557 in allegedly unsupported costs. Joint Stip. ¶¶ 4, 6(b).

Defendant argues that Plaintiffs would have re-performed the seismic analysis in the non-

breach world because the River Bend USAR contains a statement that Plaintiffs’ cask crane is

seismically qualified, and Plaintiffs would have needed to bring their crane into compliance with

their USAR. Defendant points to Plaintiffs’ March 8, 2005 License Amendment Request to the

NRC, in which Plaintiffs identify the deficiency in their original cask crane analysis, stating:

During the review of design documents for the [River Bend Site] dry cask storage

project it was discovered that the seismic analysis was performed with no load on

the crane hook. This is contrary to the [River Bend Site] USAR, which states that

the crane is qualified to maintain the load during a design basis seismic event.

This issue was entered into the [River Bend Site] corrective action system and a

re-analysis was performed which concluded that, with the exception of two welds,

the crane system is qualified to hold the maximum critical load during a design

basis seismic event.

JX 22 at 9149 (emphasis added). According to Defendant, this statement shows that Plaintiffs

performed the corrected analysis and modified the welds for the specific purpose of bringing the

crane into compliance with the statements in the River Bend USAR, which would have been

necessary in the non-breach world as well. Defendant ignores the fact that Entergy was

reviewing documents for “the dry cask storage project,” and in doing so, unearthed an erroneous

representation in their USAR. In Plaintiffs’ view, this erroneous statement was not required for a

compliant design and could have simply been removed.

The record demonstrates that if Plaintiffs had discovered the incorrect statement in their

USAR in the non-breach world, they would simply have updated their USAR to remove the

statement that the cask handling crane was seismically qualified, rather than re-performing a

seismic analysis. Tr. 612. As Ms. Clevenger testified, no NRC regulations require the cask

handling crane to be seismically qualified to handle a spent fuel transportation cask, and any

drop of a DOE-supplied transportation cask during an earthquake would not have had

unacceptable adverse results. Id. at 611-12.

As the Court credits Ms. Clevenger’s testimony, Plaintiffs are awarded $361,845 for

costs incurred to conduct a new seismic analysis of their cask handling crane.

Commercial Grade Dedication

Plaintiffs seek $811,885 for “commercial grade dedication” of River Bend’s cask

handling crane and the crane trolley outside the fuel handling building.15 The existing cask

handling crane at River Bend was “commercial grade,” or manufactured for commercial use, and

it was unclear whether it met the engineering requirements that would make it “safety-related” or

suitable for use during the safe shutdown of a nuclear power plant. Id. at 606-07. As such,

Plaintiffs performed tests and inspections of the cask handling crane and the crane trolley outside

the fuel handling building, in an effort to certify that equipment as either “safety-related” or

otherwise sufficiently quality-controlled to achieve “commercial grade dedication.” Id. at 607-

The parties stipulated that Plaintiffs’ claim for commercial grade dedication activities

consists of $811,885 in adequately supported costs. Id. at ¶¶ 4, 6(c).

08. Ms. Clevenger testified that Plaintiffs performed this commercial grade dedication on their

cask handling crane “to provide additional assurance . . . to the NRC” that Plaintiffs could safely

load dry fuel storage casks. Id. at 608.

Plaintiffs’ commercial grade dedication efforts entailed reviewing the original

documentation for the cask handling crane and trolley, using ground-penetrating radar to

examine the spacing of the steel reinforcements in the footings for the crane structure, examining

the welds in the crane structure, and contacting the manufacturer for more information on the

crane and trolley to determine how they were fabricated. Id. at 607-08. In the course of

performing the commercial grade dedication inspections, Plaintiffs discovered that the root weld

on the header beam of their crane “was observed to have a lack of fusion in a number of areas.”

JX 22 at 9148. As a result, Plaintiffs upgraded that weld and performed “ultrasonic inspection”

on all load-bearing welds. Id. The NRC approved the use of the cask handling crane at River

Bend for handling the Holtec cask system on December 1, 2005. PX 50 at 1.

Plaintiffs argue that they would not have performed the commercial grade dedication of

the crane and crane trolley in the non-breach world because the NRC had already approved the

use of River Bend’s cask handling crane for handling DOE-supplied transportation casks as part

of its decision to issue River Bend an operating license. See Tr. 609-10; JX 22 at 9144.

Therefore, Plaintiffs would not have needed to provide any additional assurance that their cask

handling crane was suitable for use in the non-breach world. Tr. 609-10. However, in the

breach world, Plaintiffs are loading Holtec casks, which are more vulnerable than shipping or

transportation casks. Id. at 605-06.

Defendant argues that Plaintiffs would have undertaken commercial grade dedication of

their cask handling crane in the non-breach world. In support of its position, Defendant relies on

Ms. Clevenger’s candid generalized acknowledgment that the NRC would have had concerns

about the suitability of Plaintiffs’ cask handling crane to handle fuel in transportation casks in the

non-breach world. Although Defendant construes Ms. Clevenger’s testimony as a concession

that Plaintiffs would have undertaken a commercial grade dedication of the cask handling crane

structure and trolley in the non-breach world, her testimony does not go that far. Rather, when

asked if the NRC “would have the same concern with handling fuel in a transportation cask,”

Ms. Clevenger replied, “I mean, they would have those concerns.” Id. at 608.

Nor does Defendant’s technical expert, Mr. Brewer, offer a persuasive opinion that

Plaintiffs would have undertaken commercial grade dedication in the non-breach world. Id. at

1735-36; DX 98 at 7-8. When asked whether Plaintiffs would have performed commercial grade

dedication in the non-breach world, Mr. Brewer testified, “I can see no reason why not. You’re

handling spent fuel in either case. So, there’s no reason to conclude that suddenly because it’s a

transportation cask rather than a storage cask that you would not want this same level of

assurance that the crane had a high quality.” Tr. 1844. Mr. Brewer’s testimony ignores the fact

that Plaintiffs, due to Defendant’s partial breach, are loading more vulnerable Holtec casks for

dry fuel storage instead of DOE-supplied casks for transport.

The Court credits Ms. Clevenger’s testimony that Plaintiffs undertook commercial grade

dedication efforts of their cask handling crane and crane trolley in order to reassure the NRC that

Plaintiffs’ crane could safely load dry fuel storage casks, which are more vulnerable than

transportation casks. The Court further credits Ms. Clevenger’s testimony that, in the non-breach

world, Plaintiffs would not have needed to reassure the NRC of the suitability of their cask

handling crane, since the NRC had approved its use when granting River Bend an operating

license. Plaintiffs are awarded $811,885 for the commercial grade dedication efforts of the fuel

handling building cask handling crane and the cask trolley.

Cask Lift Yoke Extension

Plaintiffs seek $247,828 for procuring a cask lift yoke extension and a hangar to store this

yoke extension when it is not in use.16 Plaintiffs argue that they purchased the lift yoke

extension in order to lift the HI-TRAC transfer cask and Holtec Multi-Purpose Canister into and

out of the lower shelf of the cask pool during spent fuel loading operations. PX 3 at 15.

Plaintiffs purchased the storage hangar to house the yoke extension when it is not in use. Id. A

cask lift yoke is a device that attaches to both the cask handling crane and the cask itself,

allowing the crane to lift the cask. Plaintiffs’ cask lift yoke extension is a steel bar that extends

from the lift yoke up to the crane, enabling Plaintiffs to avoid dipping their crane hook and

cabling into the cask pool. Tr. 689-90, 1831.

Although Plaintiffs were not prohibited from dipping their crane hook and cabling into

contaminated water during cask loading, Plaintiffs would have needed to decontaminate the

crane and its cabling for every cask loaded before it could take the cask outside of the fuel

handling building. Id. at 690; DX 98 at 11. This would not only have been inefficient, but

would have resulted in a greater risk of spreading contamination outside of the fuel handling

building. Tr. 1280-81. As Ms. Supko explained, procuring a cask lift yoke extension to avoid

dipping the crane hook was a reasonable approach. Id. at 1279-81.

Plaintiffs established that, in the non-breach world, DOE would have brought a cask lift

yoke extension compatible with the DOE-supplied cask for Plaintiffs to use during loading, as

DOE was required to provide its own special tools and equipment needed for use of the DOE

cask. Accordingly, in the non-breach world, Plaintiffs would not have needed to purchase their

own lift yoke extension or hangar.

As Plaintiffs have demonstrated that, but for Defendant’s breach, they would not have

had to procure a lift yoke extension or a hangar, they are awarded $247,828 for these items.

Cask Handling Crane Remote Control

Plaintiffs claim $20,924 for the installation of a remote control system on their cask

handling crane to minimize the increased radiation exposure to the crane operator resulting from

loading Holtec casks.17 The cask handling crane at River Bend was constructed with the

operator cab positioned above the cask. Id. at 219; PDX 13. In the non-breach world, the crane

would be handling transportation casks, which have more shielding than the Holtec transfer cask.

The parties stipulated that Plaintiffs’ claim for cask yoke lift extension costs consists of

$247,828 in adequately supported costs. Id. at ¶¶ 4, 6(d).

The parties stipulated that Plaintiffs’ claim for installing the cask handling crane remote

control system consists of $20,924 in adequately supported costs. Id. at ¶¶ 4, 6(e).

Tr. 241. Thus, in the non-breach world, the crane operator, sitting above a loaded transportation

cask, would not be exposed to excessive radiation. Id. However, since the Holtec casks create a

much higher radiation field, Plaintiffs had to move the crane operator to the floor of the fuel

handling building, out of the way of the crane, and equip him with a remote control driving

apparatus. The Holtec transfer casks used at River Bend release a high dose of radiation because

the cask lids have a large hole in them. Id. at 630, 633; PX 670 at 3793.18 The resulting

radiation exposure from sitting above the Holtec casks - - approximately 60 millirem per hour - -

is about 6 times the permissible hourly dose.19 Tr. 219. Plaintiffs therefore installed the remote

control to allow the crane operator to stand on the floor, out of the way of the loaded cask, and

drive the crane remotely. PX 670 at 3799; see also Tr. 629, 1931.

Defendant does not contest that there is a higher risk of radiation exposure from the

Holtec casks. Instead, Defendant suggests that the installation of a remote control would have

been “reasonable” in the non-breach world, since a crane operator will always be exposed to less

radiation if he is not sitting in the crane cab directly above a loaded cask and since using a

remote control system allows the operator a better view of the cask handling crane’s movements.

Tr. 1931. Defendant’s reasonableness argument does not render Plaintiffs’ non-breach world

implausible or defeat Plaintiffs’ claim that Defendant’s partial breach required loading Holtec

casks with increased radiation exposure, requiring a mitigation measure.

Plaintiffs have shown that the unique structure of the Holtec cask lids required them to

move their cask crane operator out of the cab and away from the cask, and modeled a plausible

non-breach world where installing a remote control system on their cask handling crane would

be unnecessary. Plaintiffs are awarded $20,924 for installing this remote control system.

In total, the Court awards Plaintiffs $3,122,653 for site modifications to handle a heavy

load.

Site Modifications to Handle a Dry Storage Cask

The Government challenges $1,075,196 in costs Plaintiffs incurred to handle Holtec dry

storage casks - - costs attributable to:

1) Modification of the cask loading pit;

2) Modification of the cask washdown pit;

3) Modifications to handle and store cask lids and equipment; and

4) Installation of permanent demineralized water lines.

The hole in the Holtec cask lid allows the crane hook to attach to the lid so that the crane

can lift the Holtec cask. Tr. 630; PDX 21.

Ten millirem or less per hour is the acceptable dose of radiation exposure to personnel.

See Tr. 219.

Modification of Cask Loading Pit

Plaintiffs seek $475,846 in costs for removing an inclined fuel transfer system and a set

of test weights from the cask pool.20 Plaintiffs removed these items from the upper shelf of the

cask pool, where they were normally stored, to make room for the Holtec cask. Id. at 335, 1823-

24; DX 6 at 1698.

Plaintiffs use test weights to verify that the cask handling crane is functioning properly

before picking up irradiated fuel. Tr. 343. Mr. Campbell testified that “these test weights are

picked up in lieu of picking up a real fuel assembly,” so that if the crane is not functioning

properly, the crane will drop a load of test weights instead of irradiated fuel. Id. The inclined

fuel transfer system is an inclined tube designed to carry two fuel assemblies at a time between

the reactor building and the spent fuel pool. Id. 165-66. The inclined fuel transfer system is

used to move fuel from the reactor vessel down to the storage pool in the fuel handling building

during an outage when the plant is shut down, and to move fuel out of the fuel handling building

up to the reactor building during normal operations. Id. at 165-66, 575.

The parties agreed that Plaintiffs moved these items to make room for the Holtec cask in

the upper shelf of the cask pool. Id. at 1823. Mr. Campbell testified that Plaintiffs moved the

inclined fuel transfer system and test weights from the cask pool because, “due to the diameter of

the cask [Plaintiffs] were putting in the pool, there would have been interferences.” Id. at 335.

Similarly, Mr. Brewer testified, “the test weights had to be moved to allow setting the Holtec

cask on that upper shelf [of the cask pool].” Id. at 1823. In his expert report, Mr. Brewer

explained, “[t]he activities to remove the weight restraints included the use of divers to grind the

restraint brackets from the floor of the upper shelf.” DX 98 at 8 n.25.21

Defendant’s sole argument is that Plaintiffs should not recover costs for removing this

equipment because Plaintiffs would have removed the equipment in the non-breach world.

Defendant relies on Mr. Brewer’s nonspecific testimony that “[t]he Holtec cask, in fact, is not

particularly different in size than the cask described in the River Bend [U]SAR as being an

allowable cask for use in transportation at River Bend. Given that, there’s no reason you

wouldn’t also have to move those weights to load a DOE cask.” Tr. 1823-24. Based on this

testimony alone, Defendant argues that Plaintiffs would have moved the test weights and the

inclined fuel transfer system insert rack prior to loading DOE-supplied transportation casks in

the non-breach world.

The Court credits Mr. Campbell’s testimony that the test weights and inclined fuel

transfer system insert rack were removed from the upper shelf of the cask pool to make room for

the Holtec casks. The record does not support Mr. Brewer’s generalized assumption that

Plaintiffs would have needed to relocate the test weights for a hypothetical DOE-supplied

transportation cask. Of the four possible DOE transportation casks that Ms. Supko identified in

The parties stipulated that Plaintiffs’ claim for removing the inclined fuel transfer system

and test weights consists of $475,846 in adequately supported costs, plus $37,569 in allegedly

unsupported costs. Joint Stip. ¶¶ 4, 6(f).

Plaintiffs do not address the divers or restraint brackets.

her report, the largest transportation cask is still eight inches smaller in diameter than the Holtec

storage cask. Plaintiffs established that Defendant’s partial breach required moving equipment

from the upper shelf of the cask pool and that they would not have done this in the non-breach

world.

The Court awards Plaintiffs $475,846 for removing the test weights and inclined fuel

transfer system insert rack from the cask loading pit to accommodate the Holtec cask system.

Modification of Cask Washdown Pit

Plaintiffs seek $187,784 in damages for installing the following items in the cask

washdown pit: scaffolding, a work platform, lighting, a concrete pedestal, and an impact limiter

at the bottom of the cask washdown pit above the concrete pedestal. 22 Plaintiffs contend that

they installed these items to accommodate features of the Holtec cask.

Work Platform

Plaintiffs installed a work platform, including grating and handrails, over the cask

washdown pit to allow workers close access to the top of the Holtec HI-TRAC, so they could

weld the lid closed. Id. at 225-26, 1920. The work platform is an area of metal flooring

encircling the top of the cask washdown pit. DX 114 at 6. The metal flooring in turn is

surrounded by a large handrail. Id. The top of the cask washdown pit is covered by grating. Id.

Plaintiffs installed the work platform because the process of welding the Multi-Purpose Canister

lid to the canister is an involved process that requires continual contact with the top of the

canister. Tr. 227-29. Prior to loading Holtec casks, the top of the cask washdown pit consisted

of “a large open hole” with a narrow grating structure surrounding it. Id. at 226. Plaintiffs were

concerned that, without a work platform to stand on, Entergy employees risked falling through

the hole during the welding process required for the Holtec system. Id.

Mr. Campbell credibly testified that the cask washdown pit was originally designed to

accommodate a cask that needed to be washed off with a hose or miniature pressure washer after

loading. Id. at 226-27. Thus, the top of the cask washdown pit had been mostly open, and only

partially covered with some grating. Id. at 226. In the non-breach world, Entergy personnel

would have been able to hose down transportation casks through the open hole and the grating at

the top of the cask washdown pit. Id. at 227. Mr. Campbell testified that if Plaintiffs had

constructed a work platform in the non-breach world, the platform would have blocked the spray

of the water during washdown. Id. at 226-27. However, since the Holtec storage casks require

close and prolonged work to dry and weld and do not need to be washed down, Plaintiffs

installed a work platform for personnel to stand on during the drying and welding phase. Id. at

226.

The parties stipulated that the amount Entergy claimed for installing scaffolding, a work

platform, lighting, a concrete pedestal, and an impact limiter altogether is $187,784 in adequately

supported costs. Id. at ¶¶ 4, 6(g). However, in their post-trial briefs, the parties only discussed

the installation of the work platform, impact limiter, and concrete pedestal.

Defendant argues that Plaintiffs should not recover the cost of installing a work platform

because they would have constructed it in the non-breach world. In support of this argument,

Defendant relies on the testimony of Mr. Brewer that Plaintiffs installed the work platform so

that River Bend personnel could stand near the cask and perform work on it, which is not a

Holtec-specific activity. Id. at 1829-30. Defendant cites Mr. Brewer’s testimony that Plaintiffs

could have used scaffolding instead of a permanent platform, although at trial, Mr. Brewer

testified that scaffolding is ultimately more expensive to maintain and “the platform’s a very

simple solution for the problem.” Id. at 1924-25.

The Court finds that Plaintiffs have met their burden of proving that they installed the

work platform to dry and weld the Holtec cask and that they would not have constructed this

platform in the non-breach world. Plaintiffs are therefore awarded the costs of installing the

work platform.

Impact Limiter

Plaintiffs installed an impact limiter in the cask washdown pit to protect the fuel building

structure, safety-related items, and dry fuel storage components in the event of a load drop. JX 7

at 4722. This was one of the impact limiters that Plaintiffs installed as a mitigation measure in

response to the results of their additional cask drop analysis. As such, for the reasons discussed

above, the Court awards Plaintiffs the cost of installing this impact limiter in the cask washdown

pit.

Concrete Pedestal

Plaintiffs installed a concrete pedestal at the bottom of the cask washdown pit for the dry

fuel storage project. Tr. 205-06. The pedestal, constructed of safety-related concrete, replaced

three steel-covered beams at the bottom of the cask washdown pit, which were originally

designed to support the transportation cask. Id. at 616. These three beams were unable to

support the Holtec transfer cask, which was designed for placement on a solid surface. Id. at

616, 619, 647. The concrete pedestal is also used to raise the HI-TRAC cask up to a working

level to give workers access to the top of the cask for the welding and drying operations of the

canister. Id. at 206. According to Mr. Campbell, it would have been unnecessary to raise a

transportation cask in the non-breach world because “there wouldn’t be any welding operations

occurring on top” of a transportation cask. Id. Instead, workers would only need to be able to

access the bolts on the transportation cask lid with a torque wrench to close the lid. Id. at 206-

07.

Plaintiffs argue that they would not have installed a concrete pedestal in the non-breach

world because the bottom of the cask washdown pit was designed to accommodate a DOE-

supplied transportation cask. Ms. Clevenger testified that, in the non-breach world, the three

steel beams that originally supported the bottom of the cask washdown pit would have been

sufficient to support loading a transportation cask. Id. at 619. Mr. Campbell testified that, in the

breach world, the HI-TRAC cask required a flat surface at the bottom of the cask washdown pit.

Id. at 305.

Defendant argues that Plaintiffs should not recover the cost of installing the concrete

pedestal because Plaintiffs did not prove that a DOE-supplied transportation cask could have

been placed on the three steel beams in the non-breach world. Plaintiffs relied on their

interpretation of the “suitable for use” provision of the Standard Contract to argue that they

would not have needed to make expensive plant modifications to accommodate a DOE-supplied

cask if Defendant had performed.

The Court credits Mr. Campbell’s testimony that the cask washdown pit would have

accommodated a DOE-supplied transportation cask and would not have needed to be modified in

the non-breach world. The Court also credits Ms. Clevenger’s testimony that a DOE-supplied

transportation cask could have been placed on the steel-covered beams at the bottom of the cask

washdown pit. Because Plaintiffs established that they installed the pedestal to accommodate the

Holtec cask and that the pedestal would have been unnecessary in the non-breach world, they are

awarded the costs of installing the concrete pedestal.

The Court awards Plaintiffs $187,784 for modification of their cask washdown pit.

Modifications to Handle and Store Cask Lids and Equipment

Plaintiffs seek $386,674 for the installation of a jib crane near the cask washdown pit and

for a cask lid stand and cart to provide storage for the cask lid during loading operations.23 Of

this amount, Plaintiffs allocated $291,406 to the installation of the jib crane, $87,539 to the

design and construction of the cask lid stand and cart, and $7,729 to internal labor costs related

to the cask lid stand and cart. Id. at 2058. Plaintiffs acquired the jib crane in order to access and

store a forced helium dehydration system and welding equipment - - equipment necessary for

loading Holtec casks - - in an area they could not otherwise access in the cask pit. Id. at 266-67,

269.

After Plaintiffs load a Multi-Purpose Canister with spent fuel assemblies in the cask pool,

Plaintiffs remove the Multi-Purpose Canister from the cask pool and place it in the cask pit. Id.

at 192. In the cask pit, Plaintiffs use a dehydration system to force water out of the Multi-

Purpose Canister and a welding machine to secure the lid onto the loaded Multi-Purpose

Canister. Id. at 314-16. Plaintiffs store that equipment in a small shelf-like area 10 to 13 feet

above the cask pit. Since the cask handling crane inside the fuel handling building cannot

physically access the area where Plaintiffs keep the forced helium dehydration skid and welding

machine, Plaintiffs acquired a jib crane to access that area when Plaintiffs need to perform work

on the equipment. Id. at 186, 267. Mr. Campbell explained that, for example, Plaintiffs have

needed to remove some components of the forced helium dehydration skid to decontaminate

them, and Plaintiffs needed the jib crane to access those components. Id. at 267, 269.

Plaintiffs argue that they would not have used a jib crane in the non-breach world

because they would not have needed to store drying or welding equipment in the area above the

cask pit. Mr. Campbell testified that Plaintiffs would not have needed any welding equipment at

all, because DOE transportation casks would have been bolted shut instead of welded. Id. at 155.

Plaintiffs would not have needed a jib crane to access any drying equipment in the hard-to-reach

area above the cask pit, because they would have stored any drying equipment that a DOE

The parties stipulated that Plaintiffs’ claim for modifications to handle and store cask lids

and equipment consists of $386,674 in adequately supported costs. Id. at ¶¶ 4, 6(h).

transportation cask would require outside the fuel handling building. Phillips Dep. 156. Ms.

Jodi Lynn Phillips (formerly Ms. Jodi Furr),24 the senior engineer in charge of the dry fuel

storage project before Ms. Clevenger, testified that the jib crane was installed specifically as part

of the dry storage project at River Bend. During her deposition,25 she testified:

Q: And are there any other uses for the jib crane apart from the Dry Fuel Storage

Project?

A: No. It was to be installed specifically for dry fuel storage. It was not there or

needed prior to dry fuel storage.

Id. She further testified that, during cask loading operations, Plaintiffs would have stored the

DOE-supplied drying equipment outside the fuel handling building:

[W]e would have . . . stored and supported [the drying equipment] outside the fuel

building . . . . The cask would have been inside, but the equipment, support

equipment it was believed would have come with the cask system . . . when they

brought the cask, so it wouldn’t have been inside the building[.]

Id. at 157.

The parties do not dispute that DOE would have provided any necessary drying

equipment in the non-breach world. The parties also agree that Defendant has not described the

dimensions or characteristics of the drying equipment that DOE would have provided.

Defendant appears to contend that Plaintiffs would have taken the drying equipment into

the fuel handling building for “each DOE cask loading” and then removed it from the fuel

handling building along with the loaded transportation cask. Mr. Brewer testified:

Q: And it’s your view that River Bend would have to move . . . any DOE-supplied

drying equipment into the plant for each DOE cask loading and then out of the

plant again when DOE went away, correct?

A: That’s correct.

Tr. 1910.

Mr. Brewer further opined that Plaintiffs would have needed to keep DOE-supplied

drying equipment near the transportation cask during loading operations, so Plaintiffs would

Ms. Phillips began working at River Bend in August of 1996 as a design engineer.

Phillips Dep. 23. She worked on the dry fuel storage project from 1999-2003, at which point she

became an operations supervisor. Id. at 29, 35. Ms. Phillips received a bachelor of science

degree in nuclear engineering at the University of Maryland and an associate’s degree in nuclear

technology from Arkansas Tech University. Id. at 37-38.

Ms. Phillips was unavailable for trial. In lieu of hearing her testimony at trial, the parties

designated the relevant portions of her deposition, which were admitted into the record. Order

(May 20, 2015).

likely have stored that equipment in the same upper shelf area where they currently store their

drying and welding equipment. DX 98 at 9. This would necessitate the use of a jib crane. Id.

Thus, Defendant argues that Plaintiffs would have installed the jib crane even in the non-breach

world.

The Court credits Mr. Campbell’s testimony and Ms. Phillips’ informed opinion that

Plaintiffs would have kept any DOE-supplied drying equipment outside the fuel handling

building in the non-breach world. At her deposition, Ms. Phillips testified that, when DOE

arrived with an empty transportation cask for Plaintiffs to load in the non-breach world, DOE

would bring any necessary drying equipment. Phillips Dep. 157. Plaintiffs would store this

equipment outside the fuel handling building as necessary while Plaintiffs loaded the casks. Id.

Then, as Mr. Brewer testified at trial, DOE would leave River Bend with the loaded storage cask

and the drying equipment. Tr. 1910. This arrangement would not require Plaintiffs to install a

jib crane - - which, as Ms. Phillips testified, was specifically acquired for the dry fuel storage

project. Phillips Dep. 156.

Plaintiffs also purchased and installed a cask lid stand to store the lid of the Holtec Multi-

Purpose Canister while the Multi-Purpose Canister is loaded with spent fuel assemblies. Mr.

Campbell testified that, during loading operations in the non-breach world, Plaintiffs would have

stored the transportation cask lid in one of several possible places: the upper shelf of the cask

pool, the cask washdown pit, the floor between the cask washdown pit and the upper shelf of the

cask pool, or outside the fuel handling building doors. Tr. 211-12. However, in the breach

world, Plaintiffs needed to be able to attach a drain tube to the bottom of the Holtec Multi-

Purpose Canister lid before fitting it to the top of the canister. Id. at 212-13. Mr. Campbell

testified that Plaintiffs could not simply rest the Holtec lids on the upper shelf of the cask pool

because they would not be able to access the bottom of the lid to perform the drain tube

installation, and Plaintiffs needed “some kind of structure” to support the cask lid while they

attached the drain tube. Id. at 213.

Mr. Brewer objected to this model of the non-breach world, opining that Plaintiffs have

not addressed “where on the fuel building floor the cask lid would be staged during loading.”

DX 98 at 9. Defendant does not, however, address Plaintiffs’ need to use a cask lid stand to

facilitate installing a drain tube in the storage cask lid.

The Court credits Mr. Campbell’s testimony that in the non-breach world, Plaintiffs

would have staged the DOE-supplied transportation cask lids on the upper shelf of the cask pool,

in the cask pit, or on the floor of the fuel handling building during loading operations,

eliminating the need for a cask lid stand. The Court further credits Mr. Campbell’s testimony

that in the breach world, the cask lid stand enabled Plaintiffs to fulfill their need to stage the cask

lid so as to facilitate installation of the drain tube. Defendant does not dispute that a Holtec

storage cask lid must be fitted with a drain tube before it can be welded to the top of the cask.

Plaintiffs have established that they would not have installed a jib crane or a cask lid

stand but for Defendant’s breach of the Standard Contract. As such, they are awarded $386,674

for these activities.

Installation of Demineralized Water Lines

Plaintiffs seek $24,891 for installing permanent service lines to provide demineralized

water to the fuel handling building.26 Plaintiffs installed the demineralized water lines

specifically for the dry fuel storage project because the Holtec storage casks must be cleaned

before they can be stored in the ISFSI. Tr. 214. Installation of these lines began in 2004, and

was completed by 2006. PX 750 at 6008-09. The service lines are stainless steel piping, 2” in

diameter. Id. at 6016.

According to Mr. Campbell, once the Holtec cask is transferred to the fuel building,

before the cask loading process commences, Plaintiffs must inspect the canister and wash it with

demineralized water to ensure that it does not contain foreign materials. Tr. 214-15. The

cleanliness of the canister is vital, as Plaintiffs are preparing to store the Holtec storage casks

onsite “for a long time” and need to avoid any erosion of the canister to keep the spent fuel

safely stored. Id. at 214-15. Cleaning the cask with demineralized water is also a specific

requirement of the Holtec Certificate of Compliance. Id. at 214.

Defendant asserts that Plaintiffs would have installed these water lines in the non-breach

world because they “also support outage functions and other work unrelated to cask loading at

River Bend.” Def.’s Post-Trial Br. 34. Defendant cites Mr. Brewer’s testimony that regardless

of the type of cask Plaintiffs are loading, “there’s a benefit to having water available” for cask

loading, such as cleaning up a cask before taking it inside the plant. Tr. 1835. Since Plaintiffs

would have benefited from the water lines in the non-breach world, Mr. Brewer contended that

the installation of these water lines was not “exclusively for dry fuel storage.” Id. at 1836.

Defendant’s contention that Plaintiffs would have installed these water lines in the non-

breach world is mere speculation, and not borne out by the record. Plaintiffs established that

they would not have installed the permanent service lines in the non-breach world because they

would not have needed to employ this cleaning process for transportation casks, since DOE

transportation casks would be moving “from one location to another,” in contrast to dry storage

casks, which need to be stored over long periods of time. Plaintiffs are awarded $24,891 for the

installation of permanent service lines.

In total, the Court awards Plaintiffs $1,075,196 for site modifications to handle a dry

storage cask.

The parties stipulated that Plaintiffs’ claim for the installation of service lines consists of

$24,891 in adequately supported costs. Joint Stip. ¶¶ 4, 6(i).

Cask Loading Costs

Plaintiffs claim $5,702,669 in costs incurred to load SNF to Holtec dry fuel storage casks

at River Bend. The challenged costs include $562,020 for fuel characterization27 and $5,143,279

in preparing, packaging, and loading SNF.28

Fuel characterization, or fuel “sipping,” tests individual fuel assemblies to determine

whether the fuel is damaged or leaking excessive radioactive materials. Plaintiffs performed fuel

characterization because the Holtec cask system’s Certificate of Compliance required Plaintiffs

to load only fuel assemblies that were intact, i.e., fuel assemblies that did not pose a risk of

leaking. Id. at 108, 150-52.

Plaintiffs argue that they should recover the cost of characterizing the spent fuel that they

loaded into Holtec storage casks because they will most likely have to perform fuel

characterization again when they transfer their spent fuel into DOE-supplied transportation

casks. Plaintiffs contend that the fuel may degrade over time, as the long-term storage of SNF in

storage canisters “may or may not affect the condition of SNF in a way that would require

further assessment before delivery to DOE.” Id. at 1959; PX 960 at 8. Further, as Defendant has

not identified the cask system it will bring to River Bend, Plaintiffs do not know what fuel

characterization activities that cask system’s Certificate of Compliance will require. Plaintiffs

contend that in the non-breach world, they would only have to perform fuel characterization

once, to load a DOE transportation cask, and should therefore recover the cost of performing fuel

sipping for the Holtec system, as Plaintiffs will likely need to perform fuel sipping again when

DOE picks up the spent fuel. Defendant argues that since Plaintiffs would have to perform fuel

characterization in the non-breach world, they should not recover these costs.

Plaintiffs also argue that they should recover the costs of preparing, packaging, and

loading spent fuel into Holtec dry fuel storage casks, as loading dry fuel storage casks is a

“completely different” activity than loading DOE-supplied transportation casks. Pls.’ Post-Trial

Br. 46. Plaintiffs submit that they will have to incur the costs of unloading the SNF currently in

Holtec storage casks and reload that SNF into DOE transportation casks in the future. Thus,

Plaintiffs contend, if they are not awarded damages for loading SNF into dry fuel storage

canisters now, they will ultimately bear the costs of loading their spent fuel twice: first into the

Holtec dry storage canisters, and later into the DOE-supplied transportation casks.

Defendant argues that Plaintiffs would have incurred cask loading costs in the non-breach

world since the Standard Contract requires the utilities to bear the costs of preparing, packaging,

and loading spent fuel into DOE-supplied casks. JX 1, Art. III.A.2(a). According to Defendant,

Plaintiffs should not recover these costs because, even though they would have packaged and

The parties stipulated that Plaintiffs’ claim for fuel characterization consists of $562,020

in adequately supported costs, plus $2,631 in allegedly unrecoverable payroll loaders. Id. at ¶¶

4, 6(j).

The parties stipulated that Plaintiffs’ claim for preparing, packaging, and loading SNF

consists of $5,143,279 in adequately supported costs, plus $7,930 in allegedly unsupported costs

and $46,555 in allegedly unrecoverable payroll loaders. Id. at ¶¶ 4, 6(l), 7.

loaded spent fuel in the non-breach world, Plaintiffs failed to quantify the difference in costs

between loading a Holtec storage cask and loading a DOE-supplied transportation cask.

This Court will defer ruling on Plaintiffs’ claim for cask loading costs at this time, as the

United States Court of Appeals for the Federal Circuit is currently considering this precise legal

question in System Fuels, Inc. v. United States, Nos. 2015-5094, 2015-5095 (Fed. Cir. filed Sept.

2, 2015). The issue presented in the System Fuels appeal is

whether the United States Court of Federal Claims erred in declining to award

Plaintiffs-Appellants . . . costs incurred to load seventeen dry fuel storage casks at

the Grand Gulf nuclear power station (“Grand Gulf”) during the period September

2005 through July 2011, which costs Plaintiffs-Appellants would not have

incurred but for Defendant the United States’ (the “Government”) breach of the

Standard Contract.

Appellants’ Br. 1. “The trial court reasoned that Plaintiffs-Appellants failed to meet their burden

of proof in that Plaintiffs-Appellants did not establish the projected costs to load DOE’s

transportation casks had DOE performed.” Id. at 2. However, according to the appellants, “[t]he

trial court discounted the fact that Plaintiffs-Appellants will again incur costs to repackage the

SNF for loading to DOE if and when DOE performs” and “ignored that DOE’s failure to identify

the transportation casks (or the design of such transportation casks) that it would have provided

had it performed prohibited Plaintiffs-Appellants from determining what their loading costs to

DOE would have been.” Id. Finally, the appellants argue, “the trial court failed to credit the fact

that the activities that Plaintiffs-Appellants performed to load SNF to Holtec storage casks are

different from Plaintiffs-Appellants obligation under the Standard Contract to load SNF to DOE-

supplied transportation casks.” Id. at 2-3.

These arguments are identical to the arguments before this Court in this matter. Just as in

this case, the appellants in System Fuels argue that loading storage casks is a separate activity

from loading transportation casks, that the appellants would not have incurred storage cask

loading costs in the non-breach world, and that they were not required to model the cost of

loading a transportation cask that DOE has not yet identified. Compare id. at 17-34, with Pls.’

Post-Trial Br. 44-59. Because it appears that the outcome of System Fuels may be dispositive on

the question of whether Plaintiffs may recover their dry storage cask loading costs here,

including fuel characterization, the Court stays consideration of this issue pending the Federal

Circuit’s resolution of System Fuels.

Payroll Loaders

The Government challenges $267,289 in Entergy payroll loaders associated with

Resource Codes 19 and 60.29 Plaintiffs support their claim for payroll loaders with the trial

The parties stipulated that Plaintiffs’ claim for payroll loaders consists of $267,289 in

adequately supported costs. Id. at ¶¶ 4, 6(m). Of this amount, $265,576 is allocable to Resource

Code 19, and $1,713 is allocable to Resource Code 60. DDX 5 at 27.

testimony of Ms. Stephanie Barras.30 As Ms. Barras testified, a loader is an amount that is added

to a transaction to account for indirect costs attributable to the transaction. Tr. 440. Payroll

loaders are applied using an automated software system. Id. at 437. Entergy has six resource

codes for payroll loaders, numbered as follows: 2 for incentive compensation, 18 and 19 for

benefits, 60 for stock options, 810 for payroll taxes, and 890 for non-productive time. Id. at 450.

Resource Code 60 was introduced in 2010, as stock options had previously been captured under

Resource Code 19. Id. at 495. Entergy computes and charges these payroll loaders according to

generally accepted accounting principles (“GAAP”) and Federal Energy Regulatory Commission

(“FERC”) regulations. Id. at 455.

While Resource Code 18 is associated with “current year benefits,” such as medical and

dental, Resource Code 19 is associated with benefits that are considered to be “nonservice year

costs.” Id. at 451, 487. Resource Code 19 includes costs associated with a trust fund in which

Plaintiffs keep funds set aside for retired employee pensions, as well as prior period costs and

non-current benefit costs, and amortized transition costs due to Entergy’s implementation of

different accounting standards during the claim period. Id. at 456, 487, 492; see also DX 101.

Ms. Barras explained that Resource Code 19 costs were included in Plaintiffs’ claim

because

it’s a cost that we’re actually incurring, and . . . these are ongoing costs for the

company for the life of the trust from the time we initiated it to the time we are

finished paying our last bill out of it . . . . [T]he costs we are incurring today

could be associated with people currently working today or people who worked

15 years ago. In the same light, 15 years from now, we’ll be incurring the same

types of costs for people who are working today on different activities, whether it

be spent fuel or other activities. As they retire, they’ll receive the benefits and

they will be causing some of those costs.

Tr. 458. Resource Code 19 costs can be attributed to economic conditions, interest rates,

regulations, and other similar things outside of Entergy’s control. Id. at 451-52, 487-88.

Entergy’s increases or decreases in contributions to its trust during the period at issue would

cause increases or decreases in the Resource Code 19 payroll loader rate in the future. Id. at 488-

89. Variables in the trust funding due to interest rates, and gains and losses are attributed to

Resource Code 19. Id. at 489.

Plaintiffs included damages associated with Resource Code 60, the payroll loader for

stock options, in their damages claim because these charges are costs that they “incur as part of

the company business,” and they apply the indirect costs associated with labor to the correct

projects consistent with Entergy’s standard accounting practice. Id. at 459. Defendant

challenges Resource Code 60 charges because “Entergy failed to show that it would not have

Ms. Barras is employed by Entergy Services, Inc. as manager of property accounting. Tr.

433-34. She has a bachelor of science degree in accounting from the University of New Orleans

and is a certified public accountant licensed in Louisiana. Id. at 436. Ms. Barras began working

for Entergy in 1996, as an entry level accountant and worked her way up to the management

level. Id. at 437.

incurred these same stock option costs with DOE performance . . . .” Def.’s Post-Trial Br. 54.

With regard to Resource Code 60, Ms. Barras testified that stock options are only available to

certain levels of Entergy management, but she did not know whether individuals who worked on

the dry fuel storage project at River Bend received stock options. Tr. 496.

The Government’s damages expert, Mr. Robert Peterson,31 challenged Plaintiffs’ claim

for payroll loaders in Resource Codes 19 and 60. Id. at 2117. Defendant does not challenge any

other payroll loaders. Mr. Peterson posited that Resource Code 19 included costs from prior

periods that became recognized when a change in the Financial Accounting Standards Board’s

accounting standards required Entergy to change how it accounted for pension adjustment and

post-employment adjustment in its books. Id. at 2028. As this change in standards, implemented

in December 1985 and December 1990, created an “enormous unfunded obligation” for Entergy,

the utility was allowed to amortize this cost over a 20-year window. Id. In Mr. Peterson’s view,

Entergy is claiming costs allocated to Resource Code 19 that it incurred “long ago,” such as costs

for personnel who retired prior to the claim period of this suit, and, in his opinion, could not be

connected with the dry fuel storage project. Id. at 2028-29.

The Government argues that Resource Code 19 includes costs incurred prior to the claim

period, and that the charges to this resource code “fluctuate based upon factors unrelated to

DOE’s performance, such as changes in the economy, or in the case of the amortization, driven

by changes in accounting methods.” Def.’s Post-Trial Br. 51. The Government concludes that

“[t]he underlying costs allocated through Resource Code 19 are not attributable to any delay in

DOE performance, or even work done to mitigate such delay.” Id. at 53. With regard to

Resource Code 60, the Government argues that because Ms. Barras was not aware of anyone

who worked on the dry fuel storage project at River Bend receiving stock options, these costs

were not incurred due to the Government’s breach. Tr. 496.

In Mr. Peterson’s view, while the Resource Code 19 amortized expense was included

over the claim period, it was “something that’s disconnected from anything having to do with the

work activities. It’s simply a financial mechanism probably driven more by changes in the

discount rate or other factors than it is having to do with anything having to do with the dry fuel

storage project.” Id. at 2029. Defendant further argues that because Resource Code 19 includes

other post-employment benefit costs for former employees - - costs for “prior years of service” -

- Entergy should have determined “which of the costs [were] associated with retired employees

versus active employees.” Def.’s Post-Trial Br. 53. Additionally, Defendant argues that any

change in the value of pension plans was not tied to work at the plant and did not increase or

decrease because of any dry fuel storage activities.

Mr. Robert Peterson was accepted by the Court as an expert in the “quantification of

monetary damages.” Id. at 1990. Mr. Peterson is a managing director of LitCon Group, LLC,

has a bachelor of science degree in mechanical engineering from Rensselaer Polytechnic Institute

and a master of business administration from the University of North Carolina at Chapel Hill. Id.

at 1980-81. Mr. Peterson has more than 20 years of engineering and consulting experience and

“has analyzed damages associated with delay, acceleration, disruption, changes in scope of work,

productivity losses, and contract termination, among others.” DX 97 App. A at 1. Mr. Peterson

has “lectured on the topic of identifying and pricing damages” and has testified in several spent

nuclear fuel cases. Id. at App. A at 3, App. B at 1-6.

With regard to Resource Code 60, Defendant argues that the costs associated with stock

options would be included in the loader whether or not the stock option was exercised. Tr. 495.

Defendant argues that at the time the stock options are issued, “Entergy’s actuary estimates the

expected costs of the stock options amortized over three years.” Def.’s Post-Trial Br. 54. Ms.

Barras testified:

Q: At the time of the grant of the . . . stock option, Entergy’s actuary would give

Entergy an anticipated cost of the stock option amortized over three years, is that

correct?

A: From what I understand, yes.

Q: And the costs associated with the stock options, whether exercised or not,

would be included within the loaders you described, is that correct?

A: Yes, the expense associated with that would be included.

Tr. 495. Defendant argues that because Plaintiffs cannot directly link these stock options costs

with dry fuel storage costs, Plaintiffs cannot recover Resource Code 60 charges as damages.

In System Fuels, Inc. v. United States (“System Fuels IV”), the Federal Circuit held that

the plaintiffs “may recover overhead costs incurred for mitigation-related work” and found that

the plaintiffs could recover their capital suspense loaders.32 666 F.3d 1306, 1312 (Fed. Cir.

2012). The Federal Circuit noted that the plaintiffs used an internal accounting system that was

FERC- and GAAP-compliant and that the trial court had “clearly erred” in finding that the

plaintiffs had not proven these damages with reasonable particularity. Id. The amount of

damages did not have to be “‘ascertainable with absolute exactness or mathematical precision.’”

Id. at 1311 (quoting Indiana Michigan Power Co., 422 F.3d at 1373). In Grand Gulf II, the

COFC followed System Fuels IV and granted the plaintiffs their payroll loaders associated with

Resource Codes 19 and 60. Sys. Fuels, Inc. v. United States, 120 Fed. Cl. 635, 663 (2015)

(“Grand Gulf II”). The Grand Gulf II court noted that the plaintiffs had established their

entitlement to these costs because they complied with GAAP. Id.; but see Sys. Fuels, Inc. v.

United States, 120 Fed. Cl. 737, 758-59 (2015) (“ANO II”) (awarding damages for Resource

Code 19, but not Resource Code 60).

Under System Fuels IV, utilities are entitled to receive overhead costs associated with

mitigation activities. 666 F.3d at 1312. The Federal Circuit found that the plaintiffs’ FERC- and

GAAP compliant accounting system “allocate[d] on a monthly basis the overhead associated

with [mitigation activities] and charge[d] accounts for the appropriate project.” Id. The Federal

Circuit has also found that estimating overhead costs related to mitigation activities using

“generally accepted accounting practices” was sufficient to show damages with “reasonable

particularity.” Id.; see also Energy Northwest III, 641 F.3d at 1309; Carolina Power & Light

Co., 573 F.3d at 1276-77. The Court credits Ms. Barras’ testimony that Entergy’s accounting for

In this case, the parties have stipulated that if a claimed damages item is recoverable, then

the associated materials loader and capital suspense loader is recoverable, with the exception of

materials loaders allocated to non-inventory purchases. Joint Stip. ¶ 5.

payroll loaders was FERC- and GAAP-compliant, and accepts that these costs were properly

accounted for and allocated by Entergy to the mitigation activities that were performed by

Plaintiffs due to the Government’s partial breach.33 See Tr. 455. These payroll loaders should

thus be considered part of the costs incurred by Plaintiffs as a result of the Government’s failure

to perform under the Standard Contract. The fact that Plaintiffs established these stock option

costs via an actuary’s estimate does not alter this result. See Indiana Michigan Power Co., 422

F.3d at 1373.

As the Court has stayed its consideration of Plaintiffs’ entitlement to damages related to

fuel characterization and cask loading costs pending the resolution of System Fuels, Inc. v.

United States, Nos. 2015-5094, 2015-5095 (Fed. Cir. filed Sept. 2, 2015), the Court does not

award Plaintiffs their claimed $49,186 for Resource Code 19 and 60 payroll loaders associated

with the labor component of these costs - - $2,631 for fuel characterization and $46,555 for cask

loading costs. Joint Stip. ¶¶ 6(j), 7. The Court awards Plaintiffs the remaining $218,103 in

payroll loader costs.

Materials Loaders

Defendant challenges $98,548 in materials loader charges applied to two Holtec invoices:

one for ancillary equipment and one for a milestone payment for the HI-TRAC transfer cask.34

A materials loader is an overhead cost that is intended to pool costs incurred for onsite

warehousing, inventory control, and other procurement functions, and to distribute them as an

added cost on items drawn from onsite inventory. Tr. 2014-16. A materials loader is intended to

capture costs associated mainly with two activities - - warehouse activities and “supply chain

functions.” Id. at 2149. Ms. Barras explained that “supply chain functions” refer to “costs that

are associated with procuring inventory items, relationships with vendors, contracts and entering

into those types of tasks.” Id. at 464. Ms. Barras also explained that transactions associated with

Entergy Resource Codes 52, 58, and 95 receive a materials loader allocation. Id. at 511; DDX 5

at 15. Resources Codes 52, 58, and 95 are associated with materials and supplies, specifically

chemicals (52), consumables (58), and inventory materials and supplies (95). PX 267 at 7550.

According to Mr. Peterson, during the claim period, Holtec issued approximately 200

invoices to Entergy for services and equipment provided to River Bend, totaling approximately

$20 million. Tr. 2016-17. Entergy accounted for all but two of the Holtec invoices using

resource codes that do not receive additional materials loader costs. DDX 5 at 17; DX 31; DX

34. The Government objects to two invoices that Entergy recorded to Resource Code 95 - -

inventory materials and supplies - - a designation that receives a materials loader.

The first materials loader charge, totaling $84,349, was assessed on an invoice from

Holtec for a milestone payment for the fabrication of the HI-TRAC transfer cask. Tr. 2020-21;

DX 34. Defendant argues that since the payment was actually for material arriving at the Holtec

Based upon the demeanor of the witness, the Court found Ms. Barras’ testimony to be

credible.

The parties stipulated that Plaintiffs’ claim for materials loaders consists of $98,548 in

adequately supported costs. Id. at ¶¶ 4, 6(n).

cask fabricator, U.S. Tool & Die, rather than in inventory or a warehouse at River Bend, this

invoice should not have been recorded to Resource Code 95, which is associated with

transactions related to inventory materials and supplies. Mr. Peterson testified that the material

wasn’t anywhere near the River Bend site. It wasn’t going through the River

Bend warehouse. It wasn’t being receipt-inspected by the River Bend personnel.

It was external to the system and does not fit the description of those types of

procurements to which a material loader, to my understanding, was intended to be

applied or were the mechanisms through which those were to be covered.

Tr. 2020.

The second materials loader charge, totaling $14,199, was assessed on an invoice from

Holtec for ancillary equipment needed for dry fuel storage at River Bend. DX 31. Mr. Peterson

testified that the ancillary equipment did not go through the normal warehouse receiving process

at River Bend and should not have been assigned Resource Code 95. Id. at 2022; DDX 5 at 20.

While Plaintiffs do not dispute that the ancillary equipment at issue did not go through the River

Bend inventory system, Plaintiffs argue that “supply chain personnel have to procure the

equipment, and supply chain personnel labor are a significant component of the cost pool

captured by Resource Code 095.” Pls.’ Post-Trial Reply 36; see also Tr. 463-64.

The two invoices at issue here reflect Plaintiffs’ acquisition of a dry storage cask and

related equipment from its cask vendor, Holtec. These activities fit within the definition of

“supply chain functions,” which are properly assigned materials loaders. Because Plaintiffs

apply materials loaders in a manner that is both GAAP- and FERC-compliant, they were

properly accounted for and allocated by Entergy to the mitigation activities performed due to the

Government’s partial breach. See System Fuels IV, 666 F.3d at 1312; Energy Northwest III, 641

F.3d at 1309; Carolina Power & Light Co., 573 F.3d at 1276-77. The Court therefore awards

Plaintiffs $98,548 in materials loader costs.

Allegedly Unsupported Costs

Defendant challenges $210,444 of Plaintiffs’ claim as unsupported. This amount

includes $183,111 for 10 transactions missing contracts or purchase orders, and $27,333 for three

transactions missing invoices. These transactions are associated with Plaintiffs’ update to their

USAR, performance of a new cask drop analysis, installation of redundant rigging and impact

limiters, performance of the seismic analysis of the cask handling crane, modifications to the

cask loading pit, and cask loading activities. The parties have stipulated that $7,930 of the total

amount of allegedly unsupported costs is associated with Plaintiffs’ cask loading costs, which

remain unresolved due to the Court’s stay.

The remaining $202,514 consists of outside vendor costs. Mr. Metcalfe testified that in

preparing his report on Plaintiffs’ claimed damages, he requested “invoices, checks, purchase

orders, contracts, [and] other payment information for electronic payments” for any item costing

$5,000 or more. Tr. 1385. Mr. Metcalfe, with the assistance of Entergy personnel, including Mr.

Campbell, reviewed these documents to ensure completeness and to establish a link to DOE’s

breach. Id. at 1385-86, 1405. Entergy personnel assisted Mr. Metcalfe in establishing a link

between DOE’s breach and the incurred costs by identifying “events or activities that were

related to the spent fuel storage and . . . mitigating the impact of the breach . . . .” Id. at 1384.

Mr. Metcalfe testified that the Government characterized some costs as unsupported because “in

some of the earlier years not all of the supporting documents were able to be located by Entergy .

. . .” Id. at 1390-91. Mr. Metcalfe was highly confident that Plaintiffs’ total claimed damages

are “supported to a reasonable certainty,” because he either performed the cost analyses himself

or directed his staff to do so and he reviewed the cost analyses with Entergy personnel. Id. at

1539.

Mr. Peterson testified that in reviewing Plaintiffs’ damages claim, the binders prepared

by Mr. Metcalfe and his staff, which included contracts, purchase orders, and invoices, were

merely a starting point for his analysis, and that he sought “additional accounting information” in

order to fill in any gaps. Id. at 2000. In order to consider a transaction to be supported, Mr.

Peterson sought the contractor purchase order identifying the scope of work, the purpose for

which something was procured, and the terms and conditions of the contract, and invoices to

identify what services were actually performed. Id. at 2001-02. Mr. Peterson and his staff also

looked to deposition testimony and the parties’ stipulations when documentation was missing.

Id. at 2002-03. Mr. Peterson testified that Defendant notified Plaintiffs of the missing

documentation Mr. Peterson was seeking, and that while Plaintiffs were able to provide most of

what he was looking for, there were “a handful of transactions” for which he did not have all of

the documentation he sought. Id. at 2001. It appears that this “handful” refers to these 13

transactions that he claims are missing documentation. However, even for these 13 transactions,

Mr. Peterson had project codes, resource codes, vendor names, contract or purchase order

numbers, transaction dates, and transaction amounts. Id. at 2169-72. The vendors for these

transactions were Enercon, Sargent & Lundy, Holtec, Citibank, and Lights Camera Action, and

these transactions spanned a timeframe within the claim period, from October 2000 through

December 2003.

The Court finds that Plaintiffs’ damages claim was supported with a reasonable degree of

certainty, because Mr. Metcalfe’s opinion was based on discussions with River Bend personnel,

who were able to identify what work was done in conjunction with the dry fuel storage project,

and because Mr. Peterson admitted that for both the group of transactions missing contracts or

purchase orders and the group of transactions missing invoices, he was provided with project

codes, resource codes, vendor names, contract or purchase order numbers, transaction dates, and

transaction amounts. Id. Therefore, the Court awards Plaintiffs $202,514 for these transactions.

Additional Security

Plaintiffs seek $1,644,251 in increased security costs as a result of DOE’s partial breach.

Because DOE did not pick up Plaintiffs’ spent nuclear fuel as planned, Plaintiffs constructed an

ISFSI to store their spent fuel. NRC regulations impose physical protection requirements for

stored spent nuclear fuel, including fuel stored in an ISFSI. Under NRC regulations, plant

licensees are required to maintain a security force to provide “high assurance that activities

involving spent nuclear fuel . . . do not constitute an unreasonable risk to public health and

safety,” and to protect “against loss of control of the facility that could be sufficient to cause a

radiation exposure” exceeding allowable levels. 10 C.F.R. § 73.51(b)(1), (3) (2001). This

security force is responsible for monitoring the “Protected Area,” where the spent fuel is stored,

and for monitoring all detection systems, conducting surveillance, and controlling access to the

protected area. Id. at § 73.51(d)(4)-(5). Plant licensees are also required to install two physical

barriers to control access to the spent fuel, one at the perimeter of the protected area and the

other “offering substantial penetration resistance.” Id. at § 73.51(d)(1).

Given those regulations, River Bend was required to provide physical protection for the

entire Protected Area at the plant. The ISFSI must be in the Protected Area, so installation of the

ISFSI necessitated Plaintiffs procuring and installing the equipment to protect the expanded

Protected Area. Tr. 2210. In particular, Plaintiffs installed additional fencing, gates, a vehicle

barrier system, and closed-circuit television and added armed responders and armed response

positions. Id. at 2210, 2216. Plaintiffs also procured and installed a concrete security barrier to

control vehicle access to the ISFSI and protect the movement of loaded casks from the fuel

handling building to the ISFSI. Id. at 2218-20. Plaintiffs purchased and installed an additional

bullet-resistant enclosure (“BRE”) to guard the ISFSI and provide physical protection for the

armed security officers. Id. at 2213.

Defendant does not contest that Plaintiffs were required to construct the BRE or

challenge the $79,301 in materials costs associated with the BRE. Id. at 1472. Rather,

Defendant challenges the $1,644,251 claimed by Plaintiffs for security labor costs contending

that Plaintiffs’ estimated costs are “unreliable and inaccurate.” Def.’s Post-Trial Br. 60.

Defendant argues that Plaintiffs should not recover their security labor costs because they failed

to provide a proper accounting of their increased costs, instead relying on an estimate.

Apparently, Plaintiffs did not retain daily shift charts and did not require Wackenhut to track the

hours of the guards assigned to the BRE. As explained below, the Court is not persuaded by

Defendant’s argument, and finds that Plaintiffs’ use of an estimate to calculate their security

labor costs was reasonable. See Grand Gulf II, 120 Fed. Cl. at 663-70 (finding that the plaintiffs

were entitled to the full amount of their claimed damages for security costs and that the use of an

estimate approximating such costs was permissible).

The NRC requires the BRE to be manned by security personnel 24 hours per day, seven

days per week. Because the River Bend security force consists of five shifts, the one new BRE

post required staffing of five additional officers. Tr. 153, 2226-27, 2238-39. Since 2004, this

BRE has been staffed continuously by five full-time equivalent security personnel. Mr. Metcalfe

testified that the amount claimed for security labor costs was based on “an estimate of the

security positions that are required for the manning of that additional bullet-resistant enclosure

on a 24/7 basis in order to monitor . . . the dry fuel storage site,” and that this estimate was

created based on information provided by River Bend personnel. Id. at 1468. Mr. Metcalfe

further explained that the cost of security labor was based on man-hours per year, both straight

time and overtime, as provided to him by River Bend personnel. Id. at 1471-72.

Specifically, Mr. Metcalfe calculated that each of the new guards would work 2,340

hours per year. PDX 33 at 60. Mr. Paul Gritton,35 the former Site Finance Manager at River

Bend, testified that until 2009, the security officers at River Bend were supplied by the

Mr. Gritton served as the site finance manager at River Bend from October of 2008 until

October of 2014. Tr. 726-27. Mr. Gritton is currently employed at the Tennessee Valley

Authority’s Brown’s Ferry nuclear plant, where he serves as the financial and business

operations manager of the nuclear power group. Id. at 725.

Wackenhut Corporation (“Wackenhut”). Tr. 733-34. Mr. Andre James,36 the Security Manager

for River Bend through 2011, and the Contract Manager during the time that River Bend’s

security staff was provided by Wackenhut, testified that when the Wackenhut contract ended in

mid-2009, the security officers became Entergy employees. Id. at 2231-32.

When Wackenhut sent an invoice for security work, Plaintiffs would allocate the costs in

that invoice to specific project charge codes. Id. at 734-35; see also PX 806 at 0388-89. Mr.

James testified that he reviewed the dollar figures that were allocated to the specific project

codes for the Wackenhut security invoices and verified their accuracy. Tr. 2233. The average

rates used in Mr. Metcalfe’s calculations are as follows: 2004, $19.43; 2005, $20.70; 2006,

$23.18; 2007, $24.03; 2008, $25.83; 2009, $23.67; 2010, $23.52. PDX 33 at 59. These averages

are similar to the average rate used in other spent nuclear fuel cases. Tr. 1477; see also Grand

Gulf II, 120 Fed. Cl. at 665, 669-70 (finding that an hourly wage rate of $21.23 was reasonable).

Defendant argues that Plaintiffs did not establish a litigation hold to preserve the daily

security shift schedules after the filing of Plaintiffs’ complaint, and that “by its own inaction,

Entergy spoliated evidence that would have provided the parties information for calculating the

actual security labor costs incurred by Entergy allegedly due to the addition of the ISFSI BRE.”

Def.’s Post-Trial Br. 61. As a remedy for such spoliation, Defendant asks the Court to deny

Plaintiffs’ claim for security labor costs in its entirety.

Although Mr. James testified that he was not instructed to keep copies of the shift

schedule or asked to collect them as part of this lawsuit, Defendant’s claim of spoliation is

without merit. Mr. James testified that while a shift schedule is used to assign security personnel

to a specific post, it does not necessarily indicate that a particular officer was in fact assigned to

that post, since rotations could change due to unforeseen circumstances, a fact that would not be

reflected in the shift schedule itself. Tr. 2258-59. Plaintiffs argue that even if the shift schedules

had been used to calculate their damages claim, an estimate would still have been required

because of this possibility for change. Nor did the Wackenhut invoices or Entergy’s internal

payroll system distinguish which officers were stationed at the BRE at any given time. Id. at

801. Mr. Gritton testified that he “wouldn’t have been able to tell from invoices or even once

they were in-house, I wouldn’t have been able to tell from our systems and from the invoices

who was in what BRE . . . .” Id.

Spoliation “‘refers to the destruction or material alteration of evidence or to the failure to

preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.’”

Micron Tech., Inc. v. Rambus, Inc., 645 F.3d 1311, 1320 (Fed. Cir. 2011) (quoting Silvestri v.

Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001)).

Spoliation requires that this Court draw an adverse inference when:

evidence has been destroyed and “(1) . . . the party having control over the

evidence had an obligation to preserve it at the time it was destroyed; (2) . . . the

records were destroyed with a culpable state of mind; and (3) . . . the destroyed

Mr. James is currently employed by Entergy Operations, Inc. as the security manager of

the Waterford Steam Electric Generating Station, Unit 3, where he has worked since 2013. Id.

at 2192. Mr. James was the security manager at River Bend from 2002-2011. Id. at 2194.

evidence was relevant to the party’s claim or defense such that a reasonable trier

of fact could find that it would support that claim or defense.”

Jandreau v. Nicholson, 492 F.3d 1372, 1375 (Fed. Cir. 2007) (quoting Residential Funding Corp.

v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002)) (omissions in original). The Federal

Circuit has not defined the level of culpability required to find that spoliation has occurred, and

the Court of Federal Claims is split between requiring a showing of bad faith or merely showing

that the party responsible for destroying evidence was blameworthy. Chapman Law Firm, LPA

v. United States, 113 Fed. Cl. 555, 610 (2013). Where bad faith is not required, “purposeful,

willful, or intentional conduct,” as well as negligence, have formed the basis of spoliation

sanctions. Lab. Corp. of Am. v. United States, 108 Fed. Cl. 549, 560 (2012) (quoting United

Med. Supply Co., Inc. v. United States, 77 Fed. Cl. 257, 266-67 (2007)). However, the intent of

the spoliating party “is relevant only in that it informs [] the court’s analysis of what, if any,

sanctions should be imposed.” Chapman Law Firm, 113 Fed. Cl. at 610-11.

Here, Defendant seeks to prevent this Court from considering Plaintiffs’ claim for costs

associated with an increase in Plaintiffs’ security force as a result of Plaintiffs’ failure to preserve

the daily shift schedules. The Court finds that Defendant has not established that Plaintiffs had

an obligation to preserve these schedules or destroyed these schedules “with a culpable state of

mind.” Neither the Protective Order nor the E-Mail Preservation Order issued in this case

imposed on the parties any preservation or retention requirements applicable to the shift

schedules. See Order Nov. 8, 2004 (Protective Order); Order Nov. 8, 2004 (E-Mail Preservation

Order).

Defendant has not provided any evidence that Plaintiffs acted purposefully, willfully,

intentionally, or negligently in failing to preserve the daily shift schedules. Nor has Defendant

provided any evidence that the schedules were destroyed. Rather, it appears that Plaintiffs,

following their normal business practice, failed to keep the schedules. Mr. James credibly

testified that he was not “required to retain shift schedules under any applicable regulation or

plant policies.” Tr. 2284. Mr. James also testified that there were no NRC or state regulations

requiring Entergy to track the work locations of individual officers, though he agreed that

nothing precluded Entergy from doing so. Id. at 2285. Although Plaintiffs should have placed a

litigation hold and maintained these schedules for purposes of trial, their failure to do so does not

rise to the level of spoliation or warrant the sanction of excluding all evidence on security labor

costs.

Defendant further argues that Plaintiffs’ estimated security labor costs are unreliable and

inaccurate. Defendant first argues that Plaintiffs overstated their calculation of the hours per

year that were needed to man the BRE during the 2004-09 period when Entergy contracted with

Wackenhut to supply security labor. Defendant contends that security labor costs should be

calculated based on the “bare hours needed to staff the BRE.” Id. at 2316. Since the BRE must

be manned 24 hours per day, 365 days a year, with shift work requiring an additional hour per

day, the hours needed to man the BRE in Defendant’s view would equate to 9,125 hours per

year. Plaintiffs, on the other hand, contend that security labor costs should be calculated based

on its reasonably estimated cost of hiring five additional employees. Plaintiffs submit that five

employees working 40 hours per week, 52 weeks per year (2,080 hours per year) straight time

and 260 hours per year overtime, minus an adjustment of 325 hours per year equates to 11,375

hours per year. PDX 33 at 60. Defendant has not established that Plaintiffs overestimated the

number of hours per year necessary for five employees to staff the BRE. The annual number of

hours worked reasonably includes overtime, and adequately reflects Plaintiffs’ labor costs.

Defendant also argues that Plaintiffs’ estimate used an inflated average labor rate because

supervisory personnel were included in the pool of officers whose wage rates were used to

determine the average wage rate. Mr. Peterson testified that the inclusion of supervisory

personnel resulted in an overstatement in the hourly rates used in Plaintiffs’ estimate from 2004

through 2009, when Wackenhut hourly rates were used to calculate the estimate. Mr. Peterson

asserted that there was “a miscommunication between the parties, in terms of what was to be

included,” and that the wage rate associated with River Bend’s use of an outside security force

was blended to include a higher rate for supervisors that “might . . . periodically have some type

of fill-in” for guards assigned to man the BRE. Tr. 2313-14. Mr. Peterson opined that this was

“irregular,” and “would be more [of] an as-needed basis; the exception, not the rule.” Id. at

2314. Defendant’s argument is unpersuasive. The Court finds that Mr. Metcalfe calculated the

estimated labor rate based on evidence provided to him by Messrs. James and Gritton. Mr.

James credibly testified that supervisors’ duties increased with the addition of the ISFSI post. Id.

at 2245. Specifically, Mr. James testified that a supervisor had to perform an inspection of every

post at least once per shift, including an inspection of the equipment the security officer was

guarding. Id. In addition, Mr. James testified that supervisors sometimes man security posts,

including when officers are sick, during shift rotations, and during officers’ meal breaks and

restroom breaks. Id. Mr. James also testified that he has seen supervisors take over entire 12-

hour shifts. Id. Given the integration of the supervisory staff into the security labor force, the

Court finds that it was reasonable for Plaintiffs to determine average yearly wage rates consisting

of both supervisory and non-supervisory wages.

Finally, Defendant argues that Plaintiffs’ estimate used an inflated number of working

hours for its 2010 estimate, when Entergy switched to an in-house security force, because

Plaintiffs included a “loader” for nonproductive time. Defendant contends that if the

nonproductive loader is included in the claimed hourly rate, the number of hours worked should

be reduced so that only active time, time spent manning the BRE, is reflected. Mr. James

testified that the total number of hours worked included “nonproductive” hours, like training and

vacation time. Id. at 2246. Mr. Peterson testified that these nonproductive hours were already

accounted for in the wage rate that Plaintiffs use. Id. at 2315-16. Thus, according to Mr.

Peterson, Plaintiffs account for nonproductive hours twice - - once in calculating the average

wage rate, and once in calculating the number of hours worked per year. Id. Defendant has not

established that Plaintiffs counted nonproductive hours twice. The full time employees’ salaries

reasonably included pay for nonproductive hours such as training and vacation, and the estimates

of wages paid for annual employee hours adequately reflect Plaintiffs’ labor costs.

Plaintiffs have proven their increased security labor costs with reasonable certainty.

Damages “need not be ‘ascertainable with absolute exactness or mathematical precision . . . .’”

Indiana Michigan Power Co., 422 F.3d at 1373 (quoting San Carlos Irrigation & Drainage Dist.,

111 F.3d at 1563). Therefore, this Court awards Plaintiffs their additional security costs in the

amount of $1,644,251.

Precedent Precludes Awarding Plaintiffs Part 171 Generic NRC Fees

Plaintiffs claim $1,586,586 in fees assessed by the NRC under 10 C.F.R. Part 171 (“Part

171”). The NRC “has long recovered a substantial portion of its operating budget through fees

levied on those that it regulates.” PX 870 at 5. The NRC uses two categories of fees - - fees for

specific benefits it provides to licensees, which fall under 10 C.F.R. Part 170, and since 1986,

annual fees under 10 C.F.R. Part 171 to recover other generic costs. Id. Site-specific fees are

license and inspection fees charged directly to the applicant or licensee involved and include fees

associated with the review of applications for new licenses, the review of renewal applications,

the review of license amendment requests, and inspections of licensees. 10 C.F.R. § 170.12

(2014).

In 1991, Congress passed the Omnibus Budget Reconciliation Act of 1990 (“OBRA-

90”), requiring the NRC to recover 100% of its annual budget through fees assessed to license

applicants and license holders, less amounts appropriated from the Nuclear Waste Fund. PX 870

at 5. OBRA-90 also required the NRC to establish a schedule of annual charges that “fairly and

equitably” allocated the total annual amount among licensees and had “a reasonable relationship

to the cost of providing regulatory services,” “to the maximum extent practicable.” Id.; 42

U.S.C. § 2214(c)(3) (2012).

In 1999, the NRC established a new fee under Part 171, the Spent Fuel Storage/Reactor

Decommissioning Fee (“SFS/RD fee”). PX 870 at 7. Prior to 1999,

the NRC charged an annual generic fee to all licensees operating nuclear reactors

to cover the NRC’s general expenses related to wet storage and nuclear plant

decommissioning. Before 1999, the NRC also charged a separate annual generic

fee to all licensees with dry storage facilities to cover the NRC’s generic expenses

related to dry storage. The 1999 rule change eliminated the separate generic fees

for (1) dry storage, and (2) wet storage and decommissioning, and created a new

annual Spent Fuel Storage/Reactor Decommissioning (“SFS/RD”) fee, which

covered the NRC’s generic costs related to both dry storage and wet storage as

well as decommissioning. Specifically, the annual SFS/RD fee covered “the costs

of the NRC’s generic and other research activities directly related to reactor

decommissioning and spent fuel storage (both [wet and dry] storage options), and

other safety, environmental, and safeguards activities directly related to reactor

decommissioning and spent fuel storage.”

***

The 1999 rule change combined the previously separate categories for wet storage

and dry storage, and covered the NRC’s generic wet-storage costs with a single

SFS/RD fee that applied to all licensees with either wet storage or dry storage on

site.

Consol. Edison Co. of N.Y., Inc. v. Entergy Nuclear Indian Point 2, LLC, 676 F.3d 1331, 1338

(Fed. Cir. 2012) (internal citation omitted). In the proposed rulemaking, the NRC observed that

the existing policy raised the following concerns about the equitable allocation of generic fees:

(a) [t]he fee structure could create a disincentive for licensees to pursue dry

storage; (b) [t]he fairness of assessing multiple annual fees if a licensee holds

multiple [dry storage] licenses for different designs; and (c) [n]ot all affected

licensees are being assessed the costs of NRC’s generic decommissioning

activities.

Revision of Fee Schedules; 100% Fee Recovery, FY 1999, 64 Fed. Reg. 15,876, 15,881 (Apr. 1,

1999).

During the notice-and-comment rulemaking process, one commenter observed that a fee

change would have been unnecessary had DOE honored its obligations under the Standard

Contract. The NRC responded in the Final Rule:

The NRC recognizes that sites will be required to continue to store spent fuel

onsite until another solution becomes available. The fact that DOE has not taken

possession of the spent fuel does not relieve NRC of the OBRA-90 [Omnibus

Budget Reconciliation Act of 1990] requirement to recover approximately 100

percent of its budget authority through fees, including those costs associated with

generic spent fuel storage activities . . . . The current policy has raised concerns

that the fee structure could create a disincentive for licensees to pursue dry

storage. The spent fuel storage/reactor decommissioning annual fee will give

equivalent fee treatment to both storage options [wet storage and dry storage].

Revision of Fee Schedules; 100% Fee Recovery, FY 1999, 64 Fed. Reg. 31,448, 31,455 (June

10, 1995).

Plaintiffs proffered Mr. Jesse Funches37 to provide an expert opinion to support their

claim for NRC fees. Mr. Funches was admitted as an expert in NRC annual fee assessment,

including the Spent Fuel Storage/Reactor Decommissioning Fee (“SFS/RD fee”) adopted in

1999. Tr. 862-63. Mr. Funches opined that because DOE did not begin accepting fuel in

accordance with the Standard Contract, the majority of utilities would eventually require

additional storage, and “therefore the NRC’s generic activities for reactor spent fuel pool storage

and dry spent fuel storage would benefit all power reactors . . . .” PX 870 at 7. Therefore, the

NRC concluded that its “costs associated with generic spent fuel storage activities should be

included in the cost of providing services to all power reactors.” Id. Mr. Funches indicated that

the NRC would not have been complying with OBRA-90 if it had changed the fee structure in

Mr. Funches joined the NRC in 1978, as an advisor to Commissioner John Ahearne and

continued this role when Mr. Ahearne was appointed Chairman, providing advice on budgetary

and other financial and administrative matters. PX 870 at 3. From 1997 until 2007, Mr. Funches

served as Chief Financial Officer (“CFO”) of the NRC and reported directly to the NRC

Chairman. Id. at 4; Tr. 846-47. Mr. Funches also was the Director of Planning and Program

Analysis Staff in both the NRC’s Office of Nuclear Reactor Regulation and the Office of

Nuclear Materials and Safeguards, as well as serving as the Deputy Controller of the NRC. PX

870 at 4. Mr. Funches “was assigned the lead responsibility for developing the first 10 CFR Part

170 and 10 CFR Part 171 fee rules” to implement the new OBRA-90 requirements. Id.

the non-breach world, because most reactors would not have needed dry fuel storage had DOE

picked up the spent nuclear fuel. Id. at 8; Tr. 929-33.

In providing this opinion, Mr. Funches relied on several documents:

 Excerpts of the March 1995 Congressional testimony of former NRC Chairman Ivan

Selin concerning the assessment of annual fees. PX 864;

 A February 2, 1998 memorandum from NRC Secretary John Hoyle to NRC Chairman

Shirley Ann Jackson and NRC Commissioner Edward McGaffigan, Jr. (“Feb 1998

Memorandum”), on which Mr. Funches was copied. DX 9;

 Mr. Funches’ February 27, 1998 “Policy Issue” memorandum to the NRC

Commissioners (“Sec’y 98-034”), which requests that the Commissioners consider

whether to use rebaselining or a percent change as the methodology for calculating fiscal

year 1998 annual fees. DX 10;

 A March 9, 1998 Staff Requirements Memorandum (“SRM”) from NRC Secretary Mr.

Hoyle to Mr. Funches and Executive Director for Operations, L. Joseph Callan

(COMSAJ-98-001).38 JX 3;

 Mr. Funches’ November 5, 1998 “Policy Issue” memorandum to the NRC

Commissioners (“Sec’y 98-260”), which included the October 1998 Spent Fuel Storage

and Decommissioning Study.39 DX 14;

 Commissioner Merrifield’s December 4, 1998 Comments on Sec’y 98-260 (FY 1999 Fee

Rulemaking). JX 4;

 Commissioner McGaffigan’s December 14, 1998 Comments on Sec’y 98-260 (FY 1999

Fee Rulemaking). Id.;

 A February 2, 1999 SRM - - drafted in response to Sec’y 98-260 - - from NRC Secretary

Annette Vietti-Cook to Mr. Funches and General Counsel Karen Cyr, with all five

Commissioners copied on the memorandum. PX 868;

 The 10 C.F.R. Parts 170 and 171 June 1999 final fee rule, containing a comment from a

nuclear utility about the SFS/RD fee and the NRC’s response. PX 969.

A SRM reflects a Commission decision that requests the NRC staff to perform a specified

task. Tr. 875.

In October 1998, in response to the Commission’s request, Mr. Funches’ staff provided a

Spent Fuel Storage and Decommissioning Fee Study, which recommended the establishment of

the Spent Fuel Storage/Reactor Decommissioning Fee. PX 870 at 7.

Plaintiffs assert that DOE’s breach was a “substantial causal factor” of the NRC’s

decision to change the fee rule in 1999, arguing that many utilities were required to implement

dry fuel storage, which had previously been utilized by only a few utilities. In Consolidated

Edison, the Federal Circuit held that the plaintiffs had not provided sufficient evidence to prove

this theory of causation, based upon the NRC’s public statements in its proposed and final

rulemaking and the comments of NRC Commissioners Merrifield and McGaffigan in internal

NRC memoranda accompanying their votes on the 1999 fee rule change. 676 F.3d at 1338-40.

The court reasoned that although the NRC briefly acknowledged DOE’s breach in the final

rulemaking, “the only public statements in the record that were made on behalf of the NRC

express a concern over the fairness of the generic fee assessment, and do not establish any direct

link between DOE’s breach and the 1999 rule change.” Id. at 1339. In the final rulemaking, the

NRC addressed the DOE breach as follows:

The NRC recognizes that sites will be required to continue to store spent fuel

onsite until another solution becomes available. The fact that DOE has not taken

possession of the spent fuel does not relieve NRC of the OBRA-90 requirement to

recover approximately 100 percent of its budget authority through fees, including

those costs associated with generic spent fuel storage activities.

Revision of Fee Schedules; 100 % Fee Recovery, FY 1999, 64 Fed. Reg. 31,448, 31,455 (June

10, 1995).

The Consolidated Edison court found that NRC Commissioner Merrifield’s

memorandum accompanying his vote on the fee change was insufficient to prove causation. In

relevant part, Commissioner Merrifield commented:

[I]t is unfortunate that the federal government has not provided for permanent

disposal of high-level waste. Because of the delay in the DOE high-level waste

repository program, I believe the Commission should seek legislation for FY2000

to amend the Nuclear Waste Policy Act so that generic costs associated with the

NRC’s spent fuel storage activities can be derived from the Nuclear Waste Fund.

676 F.3d at 1339 (internal citation omitted) (alteration in original). The court reasoned that

Commissioner Merrifield’s comments simply mirrored the NRC’s objective to facilitate

equitable fee treatment that would not penalize licensees for the fuel storage option utilized, and

concluded that his comment on amending the NWPA did not directly link the DOE’s breach to

the fee change. Id.

Consistent with Consolidated Edison, in order to recover NRC fees in the instant action,

Plaintiffs must establish a direct link between DOE’s breach and the 1999 rule change.

However, the evidence proffered by Mr. Funches in the instant case was similar to that

previously analyzed by the Federal Circuit in Consolidated Edison and found to be insufficient.

The internal NRC documents in evidence in the instant action - - specifically, Sec’y 98-304, the

February 1998 memorandum, and the March 1998 SRM - - emphasized the NRC’s need to

change the fee structure in order to address concerns about unequal fee treatment creating a

disincentive to use dry fuel storage, but did not expressly attribute the need to change the fee

structure to DOE’s breach of the Standard Contract. See, e.g., DX 10 at 4 (noting the “possible

disincentive for licensees to pursue spent fuel storage under Part 72 versus spent fuel storage

under Part 50”); DX 9 at 2 (recommending that the CFO “be directed to ensure that the fee

policy gives equal treatment” to both dry and wet storage); JX 3 (directing NRC staff to revise

the Part 171 fee rule to give “equivalent fee treatment” to both wet and dry storage). Other NRC

documents, Sec’y 98-260 and the October 1998 Spent Fuel Storage and Decommissioning Study,

also contained similar reasoning about eliminating a potential disincentive to use dry storage.

See DX 14 at 9 (noting concerns about the creation of a disincentive to pursue dry storage and

the fairness of assessing multiple fees for licensees with multiple ISFSI licenses); Id. Attach. 2 at

1 (stating that staff were directed to “revise 10 CFR Part 171 to provide equivalent annual fee

treatment to both wet storage . . . and dry storage”).

In the Spent Fuel Storage and Decommissioning Fee Study, Mr. Funches’ team

ultimately recommended the adoption of an SFS/RD fee to eliminate any disincentive to use dry

fuel storage, and secondarily recommended that, in the long term, the NRC seek an amendment

to the Nuclear Waste Policy Act allowing the recovery of increased regulatory costs from the

Nuclear Waste Fund. Id. at i-ii. The Commission responded to these recommendations in the

February 2, 1999 SRM, informing Mr. Funches and General Counsel Karen Cyr that the rule

imposing the SFS/RD fee could be issued for public comment, and requesting that the study team

brief the Commission on the advisability of amending the NWPA.

Therefore, the NRC internal documents supporting Mr. Funches’ testimony connect the

fee change to the NRC’s commitment to eliminate any disincentive to store dry fuel, echoing the

NRC’s public statements in the Federal Register, which the Federal Circuit in Consolidated

Edison held were insufficient to prove causation.

While a member of Congress questioning Chairman Selin linked the need to build ISFSIs

to DOE’s breach, Chairman Selin did not affirm that sentiment in his March 3, 1995 testimony

before the House Subcommittee on Energy and Water Development. When asked by

subcommittee Chairman John Myers:

Since utilities are being forced to build these ISFSI facilities because DOE has

been unable to take possession of spent fuel, why doesn’t the NRC include these

costs in the budget request to be derived from the Nuclear Waste Fund?

Chairman Selin responded:

We do not include the costs for independent spent fuel storage installations at

commercial reactor sites in the part of the budget appropriated from the Nuclear

Waste Fund (NWF) because we understand such funding is not authorized at

present under the Nuclear Waste Policy Act, as amended. This Act gave DOE

responsibility to administer the fund and specified the purposes of expenditures

from it. In particular, section 302 of the NWPA, which established the [Nuclear

Waste Fund], indicates that expenditures from the [Nuclear Waste Fund] are for

purposes of radioactive waste disposal activities under certain provisions of the

NWPA . . . . An [ISFSI] licensed to and operated by utilities would not appear to

fall within the purview of this definition.

PX 864 at 1213-14. This testimony mirrored the sentiments of NRC Commissioner Merrifield in

his memorandum accompanying his vote sheet, which the Consolidated Energy court held was

insufficient to prove causation. JX 4.

The testimony of Mr. Funches did not cure this evidentiary deficit. The Court qualified

Mr. Funches as an expert in NRC annual fee assessment, including the SFS/RD fee, due to his

extensive experience working for the NRC and his involvement in the formulation of the

SFS/RD fee. Mr. Funches opined that as a result of “DOE’s not picking up the fuel,” the

SFS/RD fee “followed the principle of allocating the costs [of the breach] fairly and equitably to

those licenses that would benefit.” Tr. 1046.

While Mr. Funches’ testimony regarding the allocation of the fee is an appropriate expert

opinion under FRE 702, based upon his specialized financial knowledge, his testimony about

why the Commission imposed the fee in the first place was in essence factual, and based more

upon his personal knowledge of DOE’s breach and his understanding that the fee change was

predicated on that breach. Id. at 905-07. However, the record does not support a factual finding

that Mr. Funches had, or was privy to, the knowledge of why the Commission voted to impose

this fee:

 Mr. Funches was not one of the five NRC Commissioners who voted for the SFS/RD fee.

Id. at 952, 968-69.40

 Mr. Funches did not have authority to speak on behalf of the NRC when he testified at

trial. Id. at 954.

 Mr. Funches could not recall any specific meetings or conversations he had with the

Commissioners in which any Commissioner stated that DOE’s delay caused utilities to

implement dry storage or that this delay was the reason the Commissioners voted for the

SFS/RD fee. Id. at 975-76.

 Mr. Funches was never directed to look at revising the Part 171 fee structure because of

DOE’s delay in accepting spent nuclear fuel. Id. at 1006.

 Mr. Funches acknowledged that no contemporaneous NRC document links the potential

disincentive to implement dry fuel storage under the pre-SFS/RD fee structure to DOE’s

delay, and no document or public statement of the NRC explicitly links its 1999 fee rule

change to DOE’s delay. Id. at 1041-42.

 Leading up to the 1999 fee change, there was discourse within the NRC about the DOE’s

breach and the resulting increase in dry fuel storage and the associated costs. Id. at 930;

PX 864 at 1213-14; DX 10 at 4; DX 14 Attach. 2 at 1-4.

NRC rules are issued by a five-person Commission, including the NRC Chairman. 42

U.S.C. § 5841(a)(1) (2012). The Commission members are appointed by the President and

confirmed by the United States Senate. Id. at § 5841(b)(1). Mr. Funches testified that he never

served as a Commissioner or as Chairman. Tr. 952, 967.

 The nuclear industry’s increased use of ISFSIs - - resulting from DOE’s breach - - and

the associated costs were of concern to the NRC while it considered changing its existing

fee structure. PX 864 at 1213-14; DX 14 Attach. 2 at 4.

 The Commission considered the option of diverting funds from the Nuclear Waste Fund

to recover costs associated with increased dry fuel storage. JX 4.

 The NRC chose to modify 10 C.F.R. Part 171 fees, or annual fees, instead of licensee-

specific fees because the NRC recognized that eventually most licensees in the industry

would be using dry fuel storage due to the absence of a federal facility as a result of

DOE’s breach. Tr. 1028-31.

The Consolidated Edison court emphasized the absence of an NRC-issued public

statement in the Federal Register identifying DOE’s breach as the cause for the fee change. The

court stated:

[Plaintiff] has failed to show that the 1999 rule change was the result of DOE’s

breach. The NRC’s public statements do not suggest that the 1999 changes were

the result of DOE’s breach . . . . [T]he only public statements in the record that

were made on behalf of the NRC . . . do not establish any direct link between

DOE’s breach and the 1999 rule change.

Consolidated Edison, 676 F.3d at 1338-39. Mr. Funches’ testimony, although informed by his

experience as the NRC’s CFO and his awareness of the impact DOE’s well-known delay had on

the regulatory climate, does not meet the stringent legal requirement for causation established in

Consolidated Edison - - that the NRC itself attribute DOE’s breach as the reason for

implementing the 1999 SFS/RD fee.41 Nor did Mr. Funches recall any NRC member making

such an explicit statement. However, Mr. Funches provided detailed and extensive testimony

regarding the portion of the SFS/RD fee attributable to dry spent fuel storage, which the Court

would credit if there had been a causation finding.

Mr. Metcalfe’s attempt to find the “correct economic answer” to explain why the NRC

changed its fee structure cannot on its own form a basis to award Plaintiffs NRC fees under

Consolidated Edison. See Tr. 1519-20. Mr. Metcalfe based his testimony on the belief that it

would not have made sense “from an economics standpoint” for the NRC to have considered

recouping its additional regulatory costs from the Nuclear Waste Fund if these costs were not

related to DOE’s delay in accepting spent nuclear fuel. Id. at 1503. However, in Consolidated

Edison, the Federal Circuit expressly rejected the trial court’s finding that Commissioner

Consolidated Edison’s requirement that the public record on the rulemaking contain an

express statement directly linking DOE’s breach and the fee change imposes a heavy causation

burden on the non-breaching party. Factors which inform an agency’s exercise of discretion in

rulemaking are deliberative and not readily susceptible to probing by the litigation process. The

published federal rulemaking process - - notice and comment - - while transparent, is not an ideal

vehicle for assessing whether a partial breach of contract by a fellow government agency was the

driving force behind a fee change.

Merrifield’s comment that the NRC should seek legislation to amend the NWPA to allow the

NRC to recoup its generic spent fuel storage costs from the Nuclear Waste Fund, “‘confim[ed]

the existence of a direct link between DOE’s breach and the NRC’s 1999 fee change.’”

Consolidated Edison Co., 676 F.3d at 1339 (quoting Consol. Edison Co. of N.Y., Inc. v. United

States, 92 Fed. Cl. 466, 515 (2010), aff’d in part, reversed in part sub nom. Consol. Edison Co.

of N.Y., Inc. v. Entergy Nuclear Indian Point 2, LLC, 676 F.3d 1331 (Fed. Cir. 2012)). In light

of Consolidated Edison, Mr. Metcalfe’s similar suggestion would be “insufficient as a matter of

law to demonstrate that the new NRC rules were the result of the government breach.” Id.

Therefore, the Court denies Plaintiffs’ claimed $1,586,586 in NRC Part 171 fees.

The Court Awards Plaintiffs the Remainder of Their Claimed Damages

With the exceptions of the categories discussed above, the Government concedes that the

remainder of Plaintiffs’ damages incurred in implementing dry fuel storage was caused by the

Government’s breach of the Standard Contract.

In the non-breach world, Plaintiffs would not have had to store their spent fuel on site. It

is uncontroverted that had DOE performed, Plaintiffs would not have been required to store

spent fuel on an ISFSI in Holtec canisters. The Court credits the testimony of Messrs. Rives and

Metcalfe and Ms. Clevenger that River Bend would not have implemented dry storage activities

had DOE performed. The Court finds that Plaintiffs’ remaining claimed and uncontested

damages were reasonably foreseeable to the Government at the time of contracting, were caused

by the breach, and were shown with reasonable certainty. See Indiana Michigan Power Co., 422

F.3d at 1373 (citing Energy Capital Corp., 302 F.3d at 1320). Therefore, Plaintiffs are entitled to

damages for these mitigation efforts in the amount of $35,980,339.

Conclusion

Of the $13,707,636 contested by Defendant, the Court awards Plaintiffs the following

damages:

Site Modifications to Handle a Heavy Load $3,122,653

Site Modifications to Handle a Dry Storage $1,075,196

Cask

Payroll Loader Costs $218,103

Materials Loader Costs $98,548

Allegedly Unsupported Costs $202,514

Additional Security Costs $1,644,251

Total $6,361,265

The Court also awards Plaintiffs their uncontested damages in the amount of

$35,980,339. In total, the Court awards Plaintiffs $42,341,604 in damages. Pursuant to Rule

54(b), there being no just reason for delay, the Clerk is directed to enter partial judgment for

Plaintiffs in this amount.

This Court’s adjudication of Plaintiffs’ claim for damages resulting from cask loading

activities, including fuel characterization and preparation, packaging, and loading costs, is stayed

pending the Federal Circuit’s resolution of System Fuels, Inc. v. United States, Nos. 2015-5094,

2015-5095 (Fed. Cir. filed Sept. 2, 2015). The parties shall file a Notice to the Court upon the

issuance of the Federal Circuit’s decision in System Fuels.

s/Mary Ellen Coster Williams

MARY ELLEN COSTER WILLIAMS

Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.