# Wisconsin Electric Power Co. v. United States

> United States Court of Federal Claims · December 18, 2009 · 90 Fed. Cl. 714

URL: https://www.frixlaw.com/law-library/cases/6659852

## Case

- **Full name:** WISCONSIN ELECTRIC POWER COMPANY v. United States
- **Court:** United States Court of Federal Claims
- **Decided:** December 18, 2009
- **Citations:** 90 Fed. Cl. 714; 71 ERC (BNA) 1473; 2009 U.S. Claims LEXIS 697; 2009 WL 5178375
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Merow
- **Judges:** Merow
- **Cited by:** 24 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/6659852

## How later opinions describe it (automated extraction)

- concluding that the charging of employee hours to dry storage project account numbers established plaintiffs internal labor costs with reasonable certainty
- explaining that an injured party’s recovery from third parties does not decrease the breaching party’s liability
- holding nuclear utility’s mitigation costs dating back to 1988 recoverable when the complaint was filed in November 2000

## Opinion text

OPINION
MEROW, Senior Judge.
Wisconsin Electric Company (“WE”) claims damages in excess of $90 million representing costs incurred in mitigating the government’s failure to perform its contractual obligations to collect, remove, transport and dispose of spent nuclear fuel (“SNF”) discharged from WE’s Point Beach nuclear generating facility on the shores of Lake Michigan. Electricity rates charged WE’s customers have included over $215 million dollars in fees WE paid to the government for this disposal service, which was to commence not later than January 31, 1998, but which has yet to occur.
The court has jurisdiction over these claims. 28 U.S.C. § 1491 (a); PSEG Nuclear, L.L.C. v. United States, 465 F.3d 1343 (Fed.Cir.2006). The Department of Energy’s (“DOE’s”) partial breach of its Standard Contract with nuclear utilities is well established. Carolina Power & Light Co. v. United States, 573 F.3d 1271, 1273 (Fed.Cir.2009) (“Carolina Power II”) (citing Ind. Mich. Power Co. v. United States, 422 F.3d 1369, 1376-77 (Fed.Cir.2005) (“Ind. Mich. II”) and Me. Yankee Atomic Power Co. v. United States, 225 F.3d 1336 , 1343 (Fed.Cir.2000)); Pac. Gas & Elec. Co. v. United States, 536 F.3d 1282, 1284 (Fed.Cir.2008) (“PG & E II ”) (“A series of eases has established that *721 DOE has partially breached the contract by failing to begin its performance on January 31, 1998.”) (citing cases); Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1272 (Fed.Cir.2008) (“Yankee II”) (“[DOE’s] failure to perform beginning on January 31, 1998 constituted a partial breach of the contract.”); Sacramento Mun. Util. Dist. v. United States, 293 Fed.Appx. 766, 769 (Fed.Cir.2008) (“SMUD II”); Me. Yankee, 225 F.3d at 1342 (“The breach involved all the utilities that had signed the contract — the entire nuclear electñc industry”) (emphasis added). On October 8, 2004, this court granted WE’s Motion for Partial Summary Judgment on Liability, to the extent that DOE’s failure timely to begin disposal activities with respect to WE’s SNF and/or high-level radioactive waste (“HLW’) covered by the Standard Contract comprised a partial breach. Accordingly, this Opinion concerns mitigation damages.
DOE never commenced performance of its contractual disposal obligation, but the contract was not repudiated. At all relevant times DOE continued to collect the fees required under the contract. Accordingly, nuclear utilities may recover appropriately established incurred costs in mitigating DOE’s partial breach, but may not recover future expenses. Ind. Mich. II, 422 F.3d at 1375-77 . “ ‘If the breach of an entire contract is only partial, the plaintiff can recover only such damages as he or she has sustained, leaving prospective damages to a later suit in the event of future breaches.’ ” Yankee II, 536 F.3d at 1282 (citing Ind. Mich. II., 422 F.3d at 1376 ). Indeed, such “later” suits have begun to be filed. 1 WE’s claim in this litigation is limited to costs incurred through February 28, 2007. In September of 2007, WE sold the Point Beach plant to a Florida Power and Light Company (“FP & L”) subsidiary. As a result, WE will not incur any “future damages” and this litigation comprises WE’s entire damage claim for the government’s breach of its contractual obligations.
The Point Beach facility has two reactors. A spent fuel pool (“wet pool”) between the two reactor units holds the fuel assemblies that have been discharged from the reactors after they have become “spent,” that is relatively inefficient for producing electricity. The pool has the capacity to hold a limited number of assemblies. At the time Point Beach was designed, SNF was removed from the site for reprocessing and reuse. The wet pool capacity was adequate for this method of operation. Reprocessing of SNF was subsequently eliminated with the result that the SNF remained in the pool and as discharges continued, capacity became a problem. The Nuclear Waste Policy Act of 1982, Pub.L. 97-425 (codified at 42 U.S.C. §§ 10101-10270 ) (“NWPA”), requires that nuclear utilities and the government, represented by DOE, enter into Standard Contracts wherein DOE agreed to remove, transport and dispose of utilities’ SNF starting no later than January 31, 1998. WE responded to DOE’s lack of contractual performance by building an on-site dry storage facility for SNF referred to as an Independent Spent Fuel Storage Installation (“ISFSI”) to serve as a substitute for the disposal DOE would have otherwise provided. WE’s claimed mitigation costs consist of the ISFSI construction, including internal labor, overhead, cost of capital and other expenses, the cost of casks for dry storage of SNF, expenditures in pursuit of private fuel storage at another location and Nuclear Regulatory Commission (“NRC”) fees.
Given liability, the government concedes WE is entitled to recover $12,548,930. The balance of WE’s claimed damages are assailed as not foreseeable, not established with reasonable certainty, or costs that would have been incurred even absent a government breach — or were caused by reasons other than government delays. The government also insists WE’s otherwise recoverable mitigation costs should be reduced by a variety of additional expenses that the government contends WE would have incurred if DOE had performed its contractual obligations.
*722 Trial on damages was held on September 10, 2007 through October 16, 2007. Twenty-seven witnesses testified; hundreds of exhibits and numerous deposition designations were admitted. Extensive post-trial briefs were filed, with supplemental briefing following the Federal Circuit decisions in Yankee 11, PG & E II and SMUD II (collectively referred to on occasion hereinafter as the Yankee trio). Oral argument was held on September 26, 2008. A motion for reconsideration and to recall the mandate in the Yankee trio, along with a motion for reconsideration of an order denying a motion for enlargement of time to file a petition for panel rehearing and/or a petition for rehearing en banc, was denied by the Federal Circuit on August 6, 2009. Following the Federal Circuit’s Decision in Carolina Power II, additional briefs were filed in the instant matter on August 5th and 14th, 2009. A petition for rehearing and rehearing en banc in Carolina Power II was denied by the Federal Circuit on November 3, 2009.
With appreciation for the excellent efforts and cooperation of all counsel involved, the court finds that in the main, WE’s mitigation decisions were foreseeable, commercially reasonable and substantially caused by DOE’s failure to perform its contractual obligations. But for DOE’s contractual performance failure, the costs awarded herein would not have been incurred by WE. The amount of the costs awarded were established with reasonable certainty. The court finds that in the hypothetical non-breach world of full DOE performance, under the applicable 1987 SNF disposal rate, WE would not have built an ISFSI for dry storage nor explored alternative storage possibilities represented by the costs awarded, but would have taken lesser measures to accommodate any contingencies. WE’s dry storage project required authorization by the Wisconsin Public Service Commission which the court finds would not have occurred if DOE had commenced performance of its contractual SNF disposal obligations. Without the Public Service Commission authorization, the ISFSI would not have been built and the expenditures would not have been made. Even if DOE had performed at the 1991 SNF removal rate advocated by the government at trial, WE would not have built, nor have been authorized to build a dry storage facility, and the expenses for such a facility would not have been incurred.
In determining the amount awarded to WE, costs claimed for the expense of capital used to finance dry storage and other mitigating activities are not included as prohibited by statute and precedent. Also, certain NRC fees paid by WE are not awarded.
The offsets the government seeks are not adopted. These comprise costs that WE would have incurred in loading SNF to DOE casks or containers had the government timely commenced to perform its contractual disposal obligations. They are expenses that have been deferred, not avoided. Carolina Power II, 573 F.3d at 1277 . Because Point Beach has been sold, AVE will not incur these expenses in the future but FP & L, WE’s successor, will, if contract performance eventually occurs. Presumably this future expenditure was factored into agreements between buyer and seller and can be considered for offset purposes when and if incurred.
FACTS
WE is a wholly-owned subsidiary of Wisconsin Energy Corporation (“WEC”), a pub-lically-traded corporation. At all relevant times, WE owned Point Beach Nuclear Plant (“Point Beach”) located on a 1,260 acre site adjacent to Lake Michigan, approximately 100 miles north of Milwaukee, 35 miles southeast of Green Bay, Wisconsin. Nuclear-generated power from Point Beach’s two reactors supplies approximately 25 percent of the electricity to some 1.1 million residential and commercial customers in Wisconsin and the Upper Peninsula of Michigan. Point Beach is regulated by the NRC, the Federal Energy Regulatory Commission (“FERC”), the Public Service Commission of Wisconsin (“PSC”) and the Michigan Public Service Commission. The NRC issued a 40-year license for the Point Beach Unit 1 reactor in 1970 and for Unit 2 in 1973. In 2005, the NRC extended both licenses for an additional 20 years. Point Beach generates cost-effective and emission-free electricity.
*723 Until 2000, WE managed Point Beach through its Nuclear Power Department with personnel located on-site and in Milwaukee. In 2000, WE, along with several other Midwest nuclear power utilities, formed the Nuclear Management Company (“NMC”) to operate their nuclear plants. Initial NMC members also included Wisconsin Public Service Company, Iowa Electric, Northern States Power and Consumer’s Energy. In 2000, WE transferred the Point Beach operating licenses to NMC, but continued to own Point Beach and handle its regulatory affairs through September 2007 about the time Point Beach was sold to FP & L. 2 (Tr. 5013:23-5014:5 (Weaver 3 ); Tr. 104:8-105:11 (Baumann).) The mitigation expenses sought herein all pre-date the sale.
Electricity is generated in WE’s two pressurized water reactors, each rated originally at approximately 517 megawatts, upgraded to 535 megawatts. Uranium oxide pellets (little finger-sized) are inserted into 12-14 foot cylindrical metal rods, bundled into approximately nine inch square fuel assemblies and placed in the reactor core. Each assembly contains about 200 fuel rods. (DX 283 at 3.)
In the reactor core, atoms of uranium-235 are split to produce heat, which is converted to steam to drive turbines and generate electricity. After three to four years, the fuel becomes relatively inefficient and is classified as “spent.” The reactor is shutdown, a predetermined number of assemblies are removed from the core and replaced with fresh, “hotter” fuel — a refueling cycle. The removed assemblies are placed in sleeves in basket-like storage racks in the adjacent large concrete pool filled with treated water to protect against radioactivity. The wet pool, located between the two units, is monitored with highly sophisticated devices to protect the workers and the environment. With planning and technological advances, the length of time between refueling can increase and the number of assemblies removed and replaced with new, can decrease.
SNF is measured in metric tons uranium (“MTU”). One MTU is 2,204 pounds. Even though “spent,” SNF remains highly radioactive, capable of attaining criticality for many years. For the first five years after SNF is removed from the reactor, water is the only licensed storage medium. After five years, heat and radioactivity have reduced sufficiently to allow for dry storage on an ISFSI — where huge, specially-designed concrete containei’s are placed on specialized concrete pads. Transporting SNF in or out of the reactor, the pool and to the ISFSI is complex, expensive and highly regulated. See Lower Alloways Creek v. Pub. Serv. Elec. & Gas Co., 687 F.2d 732, 737 (3d Cir.1982); see generally 10 C.F.R. pts. 72-73 (2007) (NRC regulations).
WE’s wet pool is approximately 68' long, 18' wide and 40' deep and filled with borated water to prevent criticality. The concrete wall and slabs range from 4 to 5 feet thick. Structural steel “H” piles support the bottom slab. The pool has a stainless steel liner with a leak detection system. There is about 25 feet of water above the submerged storage racks. The pool cask loading area, where a transfer cask is placed to move fuel assemblies in or out of the pool, is 8'3" by 7'10". (PX 318 at 8; DX 397 at WISC00025304; PX 640 at 00060265.) Adjacent to the pool is a transfer canal used to move assemblies in and out of the pool and to store equipment.
Because of its size, configuration, structural and other concerns, the wet pool can hold only a certain number of assemblies. Point Beach’s licensed storage capacity is currently 1502 assemblies. Storage need is triggered by the removal of assemblies from the reactor core. “Full core reserve” (“FCR”) refers to retaining sufficient empty spaces in the pool racks to hold all the assemblies in the reactor core. FCR for Point Beach is 121 assemblies. “Though the [NRC] does not *724 require utilities to maintain such a[FCR], it encourages them to do so.” Yankee II, 536 F.3d at 1275. Reracking is the use of higher density racks, with a tighter configuration, allowing more assemblies to be stored in the pool. Id. If a nuclear power plant has no place to store SNF, it can no longer operate.
Federal responsibility for SNF disposal and the Nuclear Waste Policy Act
Historically, the disposal of commercial SNF has been a federal responsibility. See Fla. Power & Light Co. v. Westinghouse Elec. Corp., 826 F.2d 239, 244 (4th Cir.1987) (quoting legislative findings in support of the 1954 Atomic Energy Act that nuclear energy was “ ‘affected with the public interest ... in the national interest to assure the common defense and security and to protect the health and safety of the public,’” and that “ ‘the stated policy of the Federal Government has always been that the safe disposal of [HLW] is to be accomplished under Federal management.’ ”) (citing 42 U.S.C. § 2021 (e) and 1980 U.S.Code Cong. & Admin.News at 6934). During the 1970s, when Point Beach was built, SNF was reprocessed; therefore, the plant was not designed with storage sufficient to hold all the SNF that would be produced through the license period. See Yankee I, 73 Fed.Cl. 249, 253-55 (2006) (summarizing history in this regard), aff'd in part, rev’d in part and remanded, Yankee II, 536 F.3d 1268 (Fed.Cir.2009). Nuclear plants constructed prior to 1977 generally did not have large wet pools. In 1977, President Carter effectively halted reprocessing. Carolina Power & Light Co. v. United States, 82 Fed.Cl. 23, 28 (2008) (“Carolina Power I”) (citing H.R.Rep. No. 97-491(1) at 27 (1982), U.S.Code Cong. & Admin.News 1982, pp. 3792, 3793-94), aff'd in part, rev’d in part and remanded, Carolina Power II, 573 F.3d 1271 (Fed.Cir.2009), reh’g and reh’g en banc denied (Nov. 3, 2009); PG & E I, 73 Fed.Cl. at 333, 354 (“ ‘[D]uring the Carter Administration, the U.S. determined that for nonproliferation purposes, it would abandon the plutonium recycle or reprocessing direction.’”) Wet pools were then the only storage option.
The 1983 passage of the Nuclear Waste Policy Act (“NWPA”) reaffirmed federal responsibility “to provide for the permanent disposal of [HLW] and such [SNF] as may be disposed of in order to protect the public health and safety and the environment.” 42 U.S.C. § 10131 (a)(4). “Seeking to avoid the inefficient and potentially unsafe prospect of allowing individual utilities to recycle or dispose of their own SNF, Congress enacted the NWPA to ‘establish the Federal responsibility, and a definite Federal policy, for the disposal of spent nuclear fuel.” Ind. Mich. Power, 422 F.3d at 1372 (quoting Roedler v. DOE, 255 F.3d 1347 , 1350 (Fed.Cir.2001) (citing 42 U.S.C. § 10131 (b)(2) (2000))).
Under the NWPA, DOE is responsible for long-term storage of SNF and HLW and nuclear utilities were required to contract with DOE. 42 U.S.C. § 10222 (b). 4 Ind. *725 Mich. II, 422 F.3d at 1372 ; N. States Power Co. v. United States, 224 F.3d 1361, 1364 (Fed.Cir.2000). The NWPA mandated certain terms of the Standard Contract, such as commencing performance by January 31, 1998, including fees charged to the utilities based on electricity generated and sold prior to April 7, 1983, and a continuing fee based on subsequent generation. 42 U.S.C. § 10222 (a)(2)-(3), (5). These fees (which are included in the electricity rates paid by respective ratepayers/eustomers) are deposited into the Nuclear Waste Fund (“NWF”). 5 WE calculates its payments into the NWF as of December 31, 2006 are over $215 million. The government calculates that amount as $213.46 million. The difference is not material to the resolutions of the matters currently before the court. As of September 30, 2009, utility payments and credited interest to the NWF totaled $30.2 billion. http://www. ocrwm.doe.gov/about/budget_and_funding. shtml (last visited Dec. 14, 2009).
The Standard Contract
On February 4,1983, a proposed Standard Contract covering disposal of SNF/HLW was published in the Federal Register with a one-month comment period. Utilities, including WE, submitted comments, addressing the cii’cumstanee that the proposed contract did not contain performance standards and there was no opportunity for negotiation before the statutory deadline for signing. 42 U.S.C. § 10222 (b)(2)(A) (June 30,1983 deadline).
On April 18, 1983, the final Standard Contract was published. 48 Fed.Reg. 16590-01; 10 C.F.R. § 961.11 . WE signed on June 16, 1983. (PX 41.) In return for payment of the fees mentioned, DOE contracted to “accept title to all SNF and/or HLW, of domestic origin, generated by [WE], provide subsequent transportation for such material to the DOE facility, and dispose of such material in accordance with the terms of this contract.” (Id. at 9.)
Both the Standard Contract and the NWPA require DOE to begin performance by January 31, 1998. “[T]he Secretary, beginning not later than January 31, 1998, will dispose of the [HLW] or [SNF] involved as provided in this subchapter.” 42 U.S.C. § 10222 (a)(5)(B). “The services to be provided by DOE under this contract shall begin, after commencement of facility operations, not later than January 31, 1998 and shall continue until such time as all SNF and/or HLW from the civilian nuclear power reactors specified in Appendix A, annexed hereto and made a part hereof, has been disposed of.” (PX 41 at 6.) The Standard Contract does not contain a performance rate; its integration clause dispels reliance on understandings, representations or promises and the like that were not incorporated. 6
Procedural background
WE’s Complaint for mitigation damages was filed on November 16, 2000. On April 7, *726 2006, WE filed its Amended and Supplemental Complaint limiting its damages to costs incurred through December, 2005. On June 7, 2007, WE filed its Second Amended and Supplemental Complaint, updating its damage claim through February 28, 2007.
DISCUSSION
Standards for Decision
“Mitigation is appropriate where a reasonable person, in light of the known facts and circumstances, would have taken steps to avoid damage.” Ind. Mich. II, 422 F.3d at 1375 . “[O]nce a party has reason to know that performance by the other party will not be forthcoming, ... he is expected to take such affirmative steps as are appropriate in the circumstances to avoid loss by making substitute arrangements or otherwise.” Id.
Expenses of mitigation efforts are recoverable if: “(1) the damages were reasonably foreseeable by the breaching party at the time of contracting; (2) the breach was a substantial causal factor in the damages; and (3) the damages are shown with reasonable certainty.” Id. at 1373 (citing Energy Capital Corp. v. United States, 302 F.3d 1314, 1320 (Fed.Cir.2002)). Mitigating damages are to place the utility “in as good a position as it would have been had the breaching party fully performed.” Id. at 1373 . Accordingly, “the non-breaching party should not be placed in a better position through the award of damages than if there had been no breach.” Bluebonnet Sav. Bank, F.S.B. v. United States, 339 F.3d 1341, 1344-45 (Fed.Cir.2003) (citing White v. Delta Constr. Int’l, Inc., 285 F.3d 1040, 1043 (Fed.Cir.2002)) (“[T]he non-breaching party ‘should on no account get more than would have accrued if the contract had been performed.’ ”).
Illustratively, in Indiana Michigan II, the Federal Circuit upheld the denial of recovery on credited evidence that the “[utility’s] decision to perform a full, instead of a partial, rerack in 1995 was purely a business judgment which it would have had to pursue irrespective of DOE’s partial breach.” 422 F.3d at 1376 .
Any costs that would have been incurred in the non-breach world must be deducted from appropriately established breach world mitigation expenses to determine the net incremental cost of mitigation, and although it may not be perfect, the 1987 Annual Capacity Report (“ACR”) process was selected by the Federal Circuit as the standard for the non-breach world for this equation. Yankee II, 536 F.3d at 1274 (“[T]his court vacates and remands with instructions that the Court of Federal Claims apply the Standard Contract acceptance rate identified in Pacific Gas to assess causation.”). Using record evidence, the court must compare the utility’s condition with full performance using SNF acceptance rates of the 1987 ACR, with the utility’s actions in the breach world — “the necessary comparison between the breach and non-breach worlds” in order to assess damages. Id. at 1273. “[W]ithout an express timetable for removal of the [plaintiff’s] waste ... the [plaintiff] cannot show the expenses they might have avoided.” Id. While the “substantial factor” standard for assessing causation is acceptable, the “but-for” standard is preferred. Id. at 1272-73.
As noted in Yankee II, 536 F.3d at 1276, mitigation decisions must be commercially reasonable:
The record also shows that the reracks were reasonable even though early closure of some facilities rendered some of the efforts unnecessary. The Yankees are “ ‘not precluded from recovery ... to the extent that [they have] made reasonable but unsuccessful efforts to avoid loss.’ ” [Ind. Mich. II, 422 F.3d at 1375 ] (quoting Restatement (Second) of Contracts § 350 comment b). Because the rerack efforts were reasonable, foreseeable, and caused by the Government’s partial breach, their ultimate success and usage is irrelevant. Accordingly, this court affirms the trial court’s findings that the Yankees’ rerack decisions were “commercially reasonable” and “foreseeable to DOE at the time of contracting.” Yankee I, 73 Fed.Cl. at 279, 283 .
The government bears the burden of establishing that any mitigation efforts were unreasonable. SMUD II, 293 Fed.Appx. at *727 772 ; Old Stone Corp. v. United States, 450 F.3d 1360, 1370 (Fed.Cir.2006), cert. denied, 549 U.S. 1279 , 127 S.Ct. 1831 , 167 L.Ed.2d 319 (2007) (“The government has not shown that it was unreasonable for OSC to replace the entire amount of regulatory capital that was eliminated by FIRREA.”); Home Sav. of Am. v. United States, 399 F.3d 1341, 1353 (Fed.Cir.2005) (“When mitigating damages from a breach, a party ‘must only make those efforts that are fair and reasonable under the circumstances.’ ”).
Aware of DOE’s impending and admitted delays, WE asserts it responded appropriately, responsibly and reasonably to mitigate the serious consequences of DOE’s delays in removing SNF. Predicting it would exceed the capacity of its wet pool before DOE’s performance as delayed would begin, WE sought approval from the PSC to construct an ISFSI and to purchase and load dry storage casks. Dry storage was chosen because of the amount of SNF that would need to be stored and the length of time it was then anticipated to remain on-site. WE also participated in the development of Private Fuel Storage (“PFS”) and other potential off-site storage possibilities. If DOE had commenced to perform as required under the Standard Contract and at the rates in the 1987 ACR, WE insists it would not have built dry storage, nor expended sums on other alternative storage efforts sought as mitigation damages.
The parties agree that the template for damages is foreseeable and reasonable expenses caused by the DOE’s partial breach, less expenses that would have been incurred if DOE had performed timely in accord with the 1987 ACR process. WE requests damages of $96,541,000. The government responds that most of these costs would have been incurred in the non-breach world, or are otherwise not recoverable, but conceded at trial that WE was entitled at least to $10,259,004 in mitigation damages. Following the Yankee trio, that amount rose to $12,548,930. (Def. Supp. Br. [415] at 14.)
The breach world
Events at the time of the signing of the Standard Contract and thereafter inform the court’s conclusions regarding the motivation and causation for WE’s decisions in the breach world, and what would, or would not have, happened in the non-breach world.
Expectations, performance levels, foreseeability of dry storage and delays
Considerable evidence was introduced concerning the early understandings and expectations of DOE, WE and the nuclear power industry. Shortly after the signing of the Standard Contract, at a December 1983 industry meeting, a responsible DOE official stated that DOE intended to prevent the need for additional at-reactor SNF storage. Accordingly, that utilities might have to build additional storage if DOE failed to perform its contractual disposal obligations was foreseeable.
The basic strategy which we’ve outlined in the mission plan, is that beginning in 1998, utilities will not have to provide any additional storage facilities on site. During the first year of operation of the repository in 1998, we should be receiving fuel at a rate so that no utility would have to add any further storage facilities either on site or at another location.
(DX 493 at SN069599.) Early in the program, there was an understanding in the industry that a repository may be ready even before 1998. 7
*728 DOE’s December 20, 1983 Draft 8 Mission Plan confirmed this intention. “[T]he schedule was ‘designed to provide an acceptance rate in the first five years such that no utility will have to provide additional storage capacity after January 31,1998. Subsequently, the acceptance rate will be equal to or greater than the actual discharge rate of spent fuel each year.’ ” PG & E II, 536 F.3d at 1286 (citing PG & E I, 73 Fed.Cl. at 355 (quoting the 1983 Mission Plan — PX 52)). The rate discussed was at least equal to the annual industry discharge of SNF (around 2000 MTU) plus some to begin reducing inventory. 9 A January 31, 1998 start date was however, called “optimistic.” (PX 52 at CTR-042-1076.)
In evaluating the adequacy of the NWF in December of 1983, it was assumed that DOE would perform at a rate sufficient to preclude additional at-reactor storage, equal or greater than the annual SNF generation rate. (PX 50, enclosure at 2 (FY 1984 Program Guidance for NWF Evaluations).)
DOE conveyed these objectives to Congress. In February 1984, Michael Lawrence, Acting Director of the Office of Civilian Radioactive Waste Management Office (“OCRWM”) 10 testified before the House Subcommittee on Energy Conservation and Power, that the “fundamental objective” of the NWPA was to accept SNF “beginning not later than January 31, 1998,” and that “achieving [that] fundamental objective and implementing an appropriate waste acceptance schedule ... will initially preclude the need for additional at-reactor storage by nuclear utilities after January 31, 1998, and, ultimately, remove all eligible waste from atreactor storage.” (PX 58 at 2.) DOE’s April 1984 Draft Mission Plan included annual acceptance rates that ramped up to 3000 MTU. (PX 59.) DOE used a 3000 MTU rate in projecting total life cycle costs and assessing the adequacy of the utility fees charged in the Standard Contract. A 3000 MTU annual rate was used in DOE’s 1985 Final Mission Plan which reiterated the objective was to avoid plant shutdowns due to lack of pool space. (PX 97.)
As a contingency in case a permanent repository would not be available to meet the January 31, 1998 deadline, in the 1985 Mission Plan, DOE stated it would request congressional authorization to build a monitored retrievable storage facility (“MRS”), an interim solution, to receive and prepare SNF for emplacement in the repository by consolidating and loading SNF into canisters. 11 If authorized by Congress, an MRS would begin acceptance beginning as early as 1996 at 2200 MTU annually, increasing to 3000 MTU in 1998. PG & E I, 73 Fed.Cl. at 358 . Without an MRS, acceptance in 1998 would be 400 MTU, increasing to 3000 MTU after five years. (PX 87 at 26.) These schedules were “illustrative” and “considerable variation” was possible. PG & E II, 536 F.3d at 1286 (citing PG & E I, 73 Fed.Cl. at 359 ).
DOE’s January 1987 Draft Mission Plan Amendment, 12 announced a five-year delay in the opening of the repository, from 1998 to 2003. (PX 109 at 5.) “This 1987 plan informed Congress that opening a permanent geologic repository by 1998 was no longer a *729 realistic goal.” PG & E II, 536 F.3d at 1286. The Draft also requested that Congress approve DOE’s MRS proposal. Id.
Two months later, in March of 1987, DOE asked Congress for authorization to construct an MRS in Oak Ridge, Tennessee. 13 At that time, an MRS was the only way DOE would be able to commence performance by January 31, 1998. An acceptance rate sufficient to keep up with the industry annual rate of SNF production was retained. To dispel any doubt of its commitment to a repository, or inference that it would be other than temporary, DOE proposed that an MRS not accept any SNF until construction of the repository was authorized, and that the capacity of the MRS be limited to 15,000 MTU. Potential volunteer sites requested that DOE include these linkages, which were political in nature, not technical. DOE hoped these linkages would make it easier to attract an MRS host.
DOE’s June 1987 Mission Plan Amendment, responding to comments received on the circulated draft, repeated the projected five-year delay in the repository (“from 1998 to 2003”) and intention to begin acceptance in 1998 at an MRS if authorized by Congress. (PX 124 at 6.) The illustrative acceptance rate was 1200 MTU for five years starting in 1998, then 2000 MTU in 2003, with the repository commencing in 2003. (PX 124 at 61.)
While the Standard Contract did not specify an acceptance rate despite industry pressure to do so, it outlined a process for setting both individual and industry aggregate annual amounts. In June 1987, DOE issued its 1987 ACR (PX 123; DX 542) projecting acceptance of 1200 MTU in 1998, 2000 MTU in 2003 and 2650 MTU in years 2004 to 2007. The Federal Circuit selected the 1987 ACR as the best manifestation of the non-breach world. PG & E II, 536 F.3d at 1291-92.
The 1987 ACR contains an industry-wide listing of SNF, arranged chronologically starting with the oldest, coolest fuel, that which has been out of the reactor the longest, and an annual parsing of allocations for the first ten years. The list for 1998 (referred to as Year 1) contains the allocations of twenty-two utilities having the oldest (and coolest) 1200 MTU, including WE’s allocation of 59.28 MTU — 151 assemblies. For 1999 (referred to as Year 2), the next-oldest 1200 MTU are segregated, and so on. Acceptance allocations to the utilities based on this age-ranking for SNF is referred to as “oldest fuel first” (“OFF”).
While the Standard Contract allocates acceptance rights by OFF, any SNF could be selected to fulfill that allocation so long as it had been out of the reactor for at least five years. (PX 346 at WISC00003809 (“The contract does not imply that the [SNF] that leads to an allocation is the specific [SNF] that must be delivered. The Purchaser can distribute the allocation among any permanently discharged fuel that can be transported (more than five years old.)” (citing Scott Vance 14 ) (emphasis in original)); PX 41 at App. E.B.3.)
Another report required by the contract, DOE’s Annual Priority Ranking (“APR”), also contained the industry-wide age ranking of SNF. (PX 238.) The APR triggered the time when a utility could submit a delivery commitment schedule (“DCS”) to DOE identifying the SNF, which again, did not have to be its oldest — that the utility “wishe[d] to deliver to DOE beginning sixty-three (63) months thereafter.” (PX 41 at Art. V.B.l.) DOE would approve or disapprove the DCS within three months and give reasons for any disapproval. The utility then has 30 days to submit a revised schedule, and could increase or decrease its SNF quantities by 20 percent. *730 (Id. at Art. V.B. (“Purchaser shall have the right to adjust the quantities of SNF and/or HLW plus or minus (±) twenty percent (20%), and the delivery schedule up to two (2) months, until the submission of the final delivery schedule.”).) Utilities could exchange approved DCSs with other utilities, subject to DOE’s approval. (Id. at Art. V.E. (“Purchaser shall have the right to exchange approved delivery commitment schedules with parties to other contracts with DOE for disposal of SNF and/or HLW; provided, however, that DOE shall, in advance, have the right to approve or disapprove, in its sole discretion, any such exchanges.”) (emphasis in original).) DOE could grant priority to shutdown reactors and accept emergency deliveries. (Id. at Art. VI.B.l.b (“[P]riority may be accorded any SNF and/or HLW removed from a civilian nuclear power reactor that has reached the end of its useful life or has been shut down permanently for whatever reason.”); Id. at Art. V.D. (“Emergency deliveries of SNF and/or HLW may be accepted by DOE before the date provided in the [DCS] upon prior written approval by DOE.”).)
In the 1987 Amendments to the NWPA, Congress directed the selection of Yucca Mountain as the site for the repository, a designation that has neither been repealed nor amended. 42 U.S.C. § 10172 (a) & (b). The 1987 Amendments also authorized DOE to site, construct and operate one MRS, and established the Office of the Nuclear Waste Negotiator to attempt to find a state or Indian tribe host. Id. §§ 10162(b); 10242(a), (b)(2). But unlike DOE’s proposal to preclude any acceptance of SNF at an MRS before construction of the repository was authorized, the linkage was stricter in that construction of an MRS was prohibited until the NRC authorized construction of the repository. This stricter linkage meant it would take longer for the MRS to be available. Also, the capacity of an MRS was reduced, capped at 10,000 MTU rather than the larger 15,000s MTU DOE proposed, until the repository started acceptance, and then no more than 15,000 MTU. “Because of these provisions, the industry quickly realized that DOE would be unable to get an MRS facility in place in time to meet its 1998 acceptance obligation.” PG & E II, 536 F.3d at 1287.
DOE’s Draft 1988 Mission Plan Amendment again admitted delay until 2003. “[U]nder current conditions, waste acceptance at a waste-management facility cannot begin in 1998; furthermore, the delay in the repository schedule and the linkages between that schedule and key milestones in the siting and construction of an MRS facility make it unlikely that the DOE will be able to start accepting fuel significantly before 2003.” (PX 150 at 18-19.) The 1988 ACR repeated this admission. (PX 149 at 4.) These reports were widely distributed and utilities, including WE, followed and relied upon them.
DOE did not issue an ACR in 1989 and acknowledged that because of delays, utilities will need additional at-reactor storage. A draft admitted that the conditions imposed by the 1987 NWPA Amendments made it unlikely DOE would accept SNF significantly before 2003, which
will increase the Purchasers’ need for at-reactor storage. As mandated by the Amendments Act, DOE is conducting an evaluation of the impacts of dry cask storage of SNF at reactor sites. The study is to consider the costs, the impacts on health, the environment and transportation, and the extent to which [NWF] monies can and should be used to support at-reactor dry cask storage. A summary of the study results and any subsequent actions by the Congress will be reported, as appropriate, [* * * add Do we have anything to report yet? * * *] in the ACR when available.
(PX 175 at 7 (bracketed material in original).)
DOE subsequently announced further delay from 2003 to 2010, in its November 1989 report to Congress. Construction authorization for the repository was not expected until 2005-2006 at the earliest, rendering an MRS (the construction of which was tied to construction authorization for the repository) by 1998 impossible. Even if Congress removed the linkages, an MRS could not be available until 2002. (PX 183 at vii, ix-x.) The MRS Commission reported in November of 1989 that because of the linkages, an MRS would not be operational more than three years *731 before the repository — then forecasted for 2010. (PX 181 at xvi; Tr. 5275:24-5277:5 (Kouts 15 ).)
DOE’s 1990 ACR, included upper bounding 16 rates starting at 1200 MTU/year and ramping-up to 3000 MTU/year. Lower bounding rates were 300, 400, 550 and 875 MTU/year for the first four years, and then 875 MTU/year through 2007. (PX 211 at 7.) The upper rates assumed Congress loosened the linkages. (Id. at 4.) The lower rates assumed no amendment. (Id.) The 1990 ACR repeated the “significant slip for the expected start of repository operations— from the year 2003 to approximately 2010.” (Id.) Without congressional action to remove the linkages, even assuming a host site had been found and agreements reached, DOE would not be able to commence acceptance until 2007. (Id.)
In September 1991, the General Accounting Office (“GAO”) reported that it was “highly unlikely” an MRS would be available by 1998. (PX 229 at 5, 15, 32 (relaying discussions with DOE officials who were in general agreement).)
DOE’s 1991 ACR reiterated that an MRS would not be feasible by 1998 unless Congress removed the linkages. (PX 237 at 4 (“If the current linkages between MRS facility construction and repository construction authorization are maintained, it is estimated that commencement of facility operations and initial acceptance of SNF by DOE could not start until at least 2007.”).) Nevertheless, the 1991 ACR used an acceptance rate that assumed Congress would remove the linkages and initial performance would be at an MRS. (PX 237 at 4 (“These acceptance rates assume commencement of facility operations in 1998.”).) The rates were 400 MTU in 1998, 600 MTU in 1999, and 900 MTU in 2000 through 2007. (Id. at 5.) The 1991 ACR rates may not have comprised a good faith projection.
The record also suggests that DOE may have put forth the 1991 acceptance rates as a litigation strategy, to minimize DOE’s exposure for its impending breach, rather than as a realistic, good faith projection for waste acceptance. The Court of Federal Claims judge in the companion Yankee Atomic Electric Co. v. United States, 73 Fed.Cl. 249 (2006) (Yankee I) case credited the testimony of a former DOE contractor who stated at trial that the 1991 ACR was intended to limit DOE’s liability for breach of contract. Id. at 273 . For these reasons, among others, this court concludes that the 1991 report does not present an acceptable acceptance rate under the Standai’d Contract.
PG & E II, 536 F.3d at 1291. Scott Vance, the DOE contractor who testified in the Yankee I trial, testified similarly at this trial. The court in Carolina Power concluded that “DOE’s actions from 1987 and thereafter were taken with an eye toward minimizing agency liability under the Standard Contract,” adding that “DOE’s David Zabransky 17 conceded at trial that, faced with massive litigation, the 900 MTU rate was an agency attempt to minimize its obligations under the Standard Contract.” 82 Fed.Cl. at 40 .
The 1992 ACR had the same acceptance rates contingent on Congressional action, absent which performance would begin by no earlier than 2007. (PX 297 at 4.)
By 1994, DOE knew that it was highly unlikely that Congress would remove the linkages. Sys. Fuels, 79 Fed.Cl. at 186 (citing Sys. Fuels, Inc. v. United States, 79 Fed.Cl. 37, 44 (2007) (citing Kouts Test.)). DOE formally announced “it would not begin SNF collection until 2010 because its planned storage repository would not be ready until *732 then.” Ind. Mich. II, 422 F.3d at 1372 (citing DOE, Waste Acceptance Issues, 59 Fed.Reg. 27,007-08 (May 25, 1994)); see also S. Nuclear, 77 Fed.Cl. at 420 (“By 1994, MRS siting efforts ‘effectively ceased.’ ”). In Indiana Michigan, the Federal Circuit concluded that by 1994, there was no doubt DOE had partially breached the Standard Contract when “the government unequivocally announced in 1994 that it would not meet its contractual obligations beginning in 1998.” Utilities then “had no choice but to hold the government to the terms of the Standard Contract while suing for partial breach” and take “mitigatory steps.” 422 F.3d at 1374-75 . As discussed hereinafter, that was the latest date, not the earliest. Utilities could establish earlier awareness and recover for consequent mitigating activities and attendant costs. Yankee II, 536 F.3d at 1275-76.
DOE’s 1994 APR/ACR issued in March 1995, designated acceptance as Year 1, Year 2, and so on, and used the 1991 ACR rates. (DX 584 at 4 (“The projected nominal acceptance rates ... reflect the capacity limit imposed by the Act on ... a[MRS] facility prior to repository operations.”).) This was the last ACR until 2004, nine years later. 18
In 1995, President Clinton announced that he would veto proposed legislation removing the linkages between a repository and an MRS. Carolina Power I, 82 Fed.Cl. at 33 (citing Sys. Fuels, 79 Fed.Cl. at 47 ).
In its “Final Interpretation of Nuclear Waste Acceptance Issues,” DOE declared that it did “not have an unconditional statutory or contractual obligation to accept [HLWJ and [SNF] beginning January 31, 1998, in the absence of a repository or interim storage facility constructed under the [NWPA].” 60 Fed.Reg. 21793-02, 21793-94 (May 3, 1995); Me. Yankee v. United States, 225 F.3d 1336 , 1338 (Fed.Cir.2000). Several utilities filed a petition for review of that Interpretation. Ind. Mich. Power Co. v. DOE, 88 F.3d 1272 (D.C.Cir.1996). The D.C. Circuit vacated DOE’s interpretation, holding that under the NWPA, DOE’s obligation to commence performance no later than January 31, 1998 was unconditional, not dependent on a repository or other disposal facility, subject only to the utilities’ payment of fees. Id. at 1276 .
Despite the D.C. Circuit’s ruling, DOE subsequently advised utilities that because there was no repository or interim facility, its delay was “unavoidable,” and therefore, the government was not liable for damages. On January 31, 1997, several utilities and public service commissions sought a writ of mandamus to compel DOE’s performance. N. States Power Co. v. DOE, 128 F.3d 754 (D.C.Cir.1997). Holding that the utilities had a potentially adequate contract remedy, the D.C. Circuit declined to order performance, but issued a writ of mandamus precluding DOE from asserting its delay was unavoidable because of a lack of a repository or interim storage authority.
[W]e preclude DOE from concluding that its delay is unavoidable on the ground that it has not yet prepared a permanent repository or that it has no authority to provide storage in the interim.
This necessarily means, of course, that DOE not implement any interpretation of the Standard Contract that excuses its failure to perform on the grounds of ‘acts of Government in either its sovereign or contractual capacity.’
128 F.3d at 760 (citation omitted). See also Wisc. Elec. Power Co. v. DOE, 211 F.3d 646, 648 (D.C.Cir.2000) (deferring to the United States Court of Federal Claims for any contract remedies).
The Court of Federal Claims, in Nebraska Public Power District v. United States, held that the Northern States writ of mandamus is void ab initio because the D.C. Circuit “operated in excess of its jurisdiction and, specifically, without an appropriate waiver of sovereign immunity.” 73 Fed.Cl. 650, 673 (2006), appeal pending, No. 2007-5083 (Fed.Cir. docketed March 15, 2007). The appeal was submitted for consideration by a panel of the Federal Circuit on December 3, 2007, and by order dated June 4, 2009, the Federal Circuit, by its own action, announced its intention to consider the appeal en banc. Oral argument en banc was held on September 18, *733 2009, and a decision is pending as of the instant Opinion.
While recent government actions may question Yucca Mountain as the means and method of performance, utilities are precluded from declaring a repudiation or total breach. “As this court has already acknowledged, the NWPA and the terms of the Standard Contract foreclose any claim for total breach.” Yankee II, 536 F.3d at 1280 (citing Ind. Mich. II, 422 F.3d at 1374 ).
The NWPA itself, and the Standard Contract’s terms drafted pursuant to it, compelled Indiana Michigan to bring an action for partial, not total, breach. Had Indiana Michigan brought an action for total breach, DOE would have been discharged from further responsibility under the contract, a situation apparently not desired by appellant and foreclosed by statute. The NWPA directed that DOE and all nuclear utilities enter into Standard Contracts, 42 U.S.C. § 10222 (a)(1), and concomitantly conditioned the issuance and renewal of [NRC] operating licenses upon the execution of those contracts, id. § 10222(b)(1)(A). Additionally, the NWPA provided that DOE was exclusively responsible for SNF collection and disposal in the United States, thereby prohibiting Indiana Michigan or any other nuclear utility from seeking alternative disposal means. See 42 U.S.C. § 10131 (a)(4), (b)(2); Roedler, 255 F.3d at 1350. Therefore, Indiana Michigan had no choice but to hold the government to the terms of the Standard Contract while suing for partial breach.
Ind. Mich., 422 F.3d at 1374 .
Causation
DOE’s failure to perform its contractual obligations was the “but for” and substantial causal factor in WE’s dry storage decisions and expenditures in the breach world. In the non-breach world, if DOE had performed at the rates in the 1987 ACR, WE would not have built dry storage.
In 1983 and at least for a time thereafter, WE relied on DOE’s timely performance. Both Mr. Sol Burstein 19 and Mr. Howard Shimon, 20 in industry groups and communications with DOE, emphasized the importance of (1) the January 31, 1998 contract start deadline; (2) OFF; and (3) an acceptance or performance rate that would preclude the need for additional at-reactor storage or at least keep up with the industry annual discharge of around 2000 MTU. 21 While these statements are unilateral, they provide background and are probative on causation in the breach world. At the Atomic Industrial Fo *734 rum in March of 1985, Mr. Burstein expressed the nuclear industry's hopes that DOE would accept at least 2000 MTU annually, the industry discharge rate: “[The industry’s] desire is to have the receiving rate in 1998 at a level at least equivalent to the discharge rate. This receiving rate must be increased to allow all backlog material to be delivered within the first twenty years of the program.” (PX 81 at 7-8.) WE’s storage planning was based on DOE’s performance and Mr. Burstein was apprehensive. “We are not totally satisfied with [DOE’s] efficiency to date, nor with the fact that scheduled dates are being missed. Our on-site storage programs are based on the contractual promise we have with DOE that they will start taking spent fuel no later than 1998. That date must be held firm and inviolate.” (Id. at 8 (emphasis supplied).)
On March 19, 1987, Mr. Burstein submits ted a statement on behalf of Edison Electric Institute (“EEI”), the American Nuclear Energy Council, the Utility Nuclear Waste Management Group, the Electric Utility Companies’ Nuclear Transportation Group and the Atomic Industrial Forum, to the Subcommittee on Energy Research and Development Committee on Science, Space and Technology of the United States House of Representatives. Noting that WE had at that time paid $85 million dollars in fees under the Standard Contract, he reported that “[t]he industry is extremely concerned over the current state of affairs surrounding the NWPA implementation. After electric utilities with nuclear energy programs have collected from electricity consumers and paid $2.7 billion into the [NWF], DOE is facing unprecedented opposition to the continuation of NWPA implementation.” (PX 116 at 2-3 (emphasis added).)
In Congressional testimony in March 1987, Mr. Burstein again expressed his concern over DOE’s lack of progress. (PX 132 at 1 (Representative Udall characterized DOE’s implementation of the NWPA as in “shambles”).) Testifying on behalf of EEI, a trade association of nuclear utilities including WE, 22 he urged Congress not to link an MRS to authorization of the repository construction as was being proposed at the time. “Doing so would make the start-up of the MRS less certain, because it would await not only its own licensing, but also that of the first repository” (PX 134 at 3) and would “raise a significant question whether DOE will be able to meet its statutory and contractual commitment to begin to accept spent fuel in January 1998.” PG & E II, 536 F.3d at 1287.
Beginning in 1988, WE started exploring long-term storage options 23 including building another spent fuel pool and consolidating spent fuel rods. In 1988, WE, Sierra Nuclear (a cask manufacturer) and Electric Power Research Institute (“EPRI”) participated in a DOE demonstration project for a new ventilated storage cask (“VSC”) that held 17 assemblies — the VSC-17. 24 WE’s budget for this project was $50,000 in 1988 and $150,000 in 1989; EPRI contributed $200,000; Sierra Nuclear, $400,000 and DOE, $400,000 (out of the NWF). In WE’s May 6, 1988 internal memorandum authorizing participation in this project, annual savings were estimated at two million dollars compared to the cost of *735 existing metal storage casks. DOE’s then-current plan, described as “optimistic and risky” (PX 145 at WISC00061023), was for limited operation at a repository in 2003. Storage at least through 2003 was accordingly anticipated, and “[t]hrough 2003, it will be necessary to provide for the storage of 504 fuel assemblies that cannot currently be accommodated in the spent fuel pool.” (Id.) The cask demonstration project was successful and the VSC-17 was the precursor to the VSC-24 later used at Point Beach. (Tr. 1333:18-1334:4 (Shimon) (explaining that the project successfully established the reliability of the codes that would permit the VSC cask to be licensed for commercial use).)
By letter, dated August 26, 1988 WE submitted comments on DOE’s 1988 Draft Mission Plan Amendment statement that performance was not going to start in 1998 and probably would not commence until 2003 with an MRS. WE’s comments insisted it was imperative that DOE commence acceptance by January 31, 1998, and reminded DOE of its contractual commitments for which at that time WE had paid over $93 million. (PX 156 (signed by C.W. Fay, Vice President, Nuclear Power).)
In its 1988 Form 10-K, WE disclosed it was exploring storage alternatives because of DOE’s delay.
[I]n June 1988 the DOE reported that it would not be able to accept utility spent fuel for disposal before 2003.[WE] is reviewing the options, including advanced technologies for on-site storage and the availability of away-from-reactor storage, for the storage of spent fuel generated at Point Beach after 1995 until the DOE accepts deliveries of spent fuel for disposal.
(PX 801, Tab 18 at 10.)
In May of 1989, WE commenced its dry storage project with its internal $53,362,878 work order requisition which stated that “we are not certain when the [disposal] service [by DOE] will be provided. DOE has announced a schedule that calls for the operation of a repository in 2003.” The preferred plan was for a dry storage facility with a capacity to hold about 45 casks, sufficient to store all WE’s SNF until the end of its then-current operating license. (PX 170, 171 at 1.) CosVbenefits analyses of various options were summarized. An advantage of an ISFSI was its modular nature compared to the higher cost and inflexibility of building an additional spent fuel pool. 25 Assuming DOE was not going to start performance until 2003, it was estimated that approximately 20 VSC-24 casks would be needed, to hold a total of 480 assemblies. (PX 171 at 9.)
In July of 1989, Mr. Shimon spoke pub-lieally and critically about DOE’s delay.
The latest schedule we have seen for OCRWM’s transportation activities shows the first shipment of spent fuel to a repository or to monitored retrievable storage beginning in 2003. It is generally considered optimistic to assume that a repository will begin operation by that date. With regard to monitored retrievable storage, there is the possibility that a federal facility could be operational earlier than 2003 if a host state were supportive of the project and shipments were not constrained by current linkages to the repository schedule. However, many issues must be resolved before a firm planning base for an MRS facility can be established.
(PX 178 at 2-3.)
In its 1989 Form 10-K, WE again disclosed that dry storage was being considered because of DOE’s delay at that time until 2010. (PX 801 at KRGWE000192-93.) WE’s 1990 Form 10-K included DOE’s November 1989 admission that acceptance at a repository would be delayed until 2010, and WE’s storage options. (PX 801 at KRGWE000202.)
At two industry meetings in November of 1990, Mr. Shimon stated that WE and other utilities were building dry storage because of DOE’s delays. (PX 208 at 6; PX 209; Tr. 1321:25-1323:7; 1323:25-1325:10 (Shimon).)
PSC proceedings
WE sought PSC approval for a dry storage facility. Significant effort at trial was expended by both parties on WE’s state *736 ments to the PSC that additional storage was needed by 1994 or 1995. The government argues these statements are proof that DOE’s delays were not the reason WE built dry storage and that if DOE had timely commenced performance WE would still have built dry storage. Statements cited by the government include those of WE Vice President Robert Link. 26 Mr. Link was mindful of the public antagonism faced by Northern States Power in connection with its dry storage project in neighboring Minnesota. “Northern States ran into very contentious issues before their own Public Service Commission and had significant intervention in their case as well.” (Tr. 369:8-11 (Link).) The opinion in Northern States Power Co. v. United States, 78 Fed.Cl. 449, 453 (2007), notes that following “long and difficult” administrative proceedings that took almost two years, the Minnesota Public Service Commission granted permission to load no more than 17 casks — enough to sustain operations through 2001, the year DOE was then projecting commencement of performance. Litigation ensued resulting in a ruling invalidating the Commission’s Order. In re Application of Indep. Spent Fuel Storage Installation, 501 N.W.2d 638, 648 (Minn.Ct.App.1993). Action by the Minnesota legislature a year later allowed a 17-cask facility, but only under significant and expensive conditions. 78 Fed.Cl. at 453-54 . Wisconsin had a moratorium on any new nuclear power plants and serious opposition to dry storage was anticipated. (Tr. 332:2-5 (Link).) WE made conservative assumptions in its PSC application in part, because of expected scrutiny. Witnesses also testified that a heightened sense of urgency — almost a worst case scenario— was necessary because of long lead times and unknowns. WE wanted a timely ruling on the application — not a deferral until WE’s needs were more desperate — or DOE’s delays more apparent.
Similarly, WE’s characterization to the PSC concerning when its wet pool would be “full” depends on the definition of that term. Assumption of either a one or a two FCR (121 and 242 spaces respectively) alters predictions about when the pool would be “full.” In this context, the record evidence shows that WE’s predictions of a “full” pool did not mean each rack space in the pool was filled, but “full” included a reserve of 121 or 242 spaces for unloading one or both cores. Also, some rack spaces may have been empty, but were damaged or had some protrusion that prevented their use. Additional spaces were filled with material other than SNF that could have been removed and stored elsewhere, thus making the spaces available.
The evidence demonstrates that while FCR was desirable and used by WE in its conservative advocacy before the PSC, it was not an absolute requirement either historically or operationally. Mr. Gary Krieser, 27 former WE Manager of Industry and Regulatory Services, testified:
Q. If Point Beach had operated until 1998 without dry storage, would Point Beach have had [FCR] in the permanent storage ai’eas of the pool throughout that time?
A There would have been times, certainly, as we approach 1998, where we would not have had FCR, but, again, like I say, it was a goal, and I think, overall, we would have been comfortable with that condition.
*737 (Tr. 1532:3-11 (Krieser).) Regulators did not require FCR as noted in Yankee II, 536 F.3d at 1275: “[i]n addition to reserving space to accommodate SNF in pools, utilities ideally maintain sufficient pool capacity to permit discharge of all fuel assemblies from the reactor core into the pool to accommodate maintenance and repair operations. Though the [NRC] does not require utilities to maintain such a ‘full core reserve,’ it encourages them to do so.”
Planning for storage needed because of DOE’s delays was at that time fraught with unknowns. Dry storage was relatively new. Only a few nuclear power plants initiated dry storage prior to 1998. 28 Sys. Fuels, 79 Fed.Cl. at 49 . The length of time needed for regulatory approvals, construction and acquisition of necessary casks and ancillary equipment, simply could only be estimated. This was a complex engineering project with many variables. The massive structures involved were not off-the-shelf commodities. (Tr. 2735:23-2736:10 (Anundson 29 ) (“[I]t turned out to be quite complex with all the different areas that were required....There was no ‘Dry Storage for Dummies’ books. It was starting from scratch.”).) WE could not wait until storage was needed and look to the market to immediately supply needs. Justin-time inventory was neither realistic nor reasonable.
In pre-application meetings with the PSC, WE proposed an ISFSI with 48 casks, sufficient to store all WE’s SNF through the end of its then-current operating license. WE reduced that number to 12 at the Commission’s urging, in the hopes of facilitating approval. The proposed ISFSI pad, however, retained a 48 cask capacity.
On November 15, 1991, WE filed its application with the PSC for approval to construct dry storage and purchase 12 VSC-24 casks and related equipment for $12,865,000. (PX 236.) In a five-page cover letter, Mr. David Porter, 30 Senior Vice President, summarized WE’s consideration of alternatives. He wrote that the requested additional storage was needed by 1995 in order to maintain FCR, and that DOE’s performance was delayed until 2010.
Additional spent fuel storage capacity will be required at Point Beach in 1995 to allow for the continued operation of the plant while maintaining the capability to discharge one full-core of fuel assemblies to the spent fuel pool should the need arise. [WE] has a contract with [DOE] for the removal and disposal of all spent fuel generated at Point Beach. The contract requires the DOE to begin acceptance of spent fuel in 1998. Currently, there is no federal facility for storing or disposing of the spent fuel. While the DOE is searching for a volunteer state to host an interim storage facility, it does not expect that a disposal facility will be operational before the year 2010.
The [ISFSI] will provide for additional interim storage through at least 1998, and could be expanded as required to provide additional storage capacity until the DOE begins removal of spent fuel from the Point Beach site.
(PX 236 at 1.)
The dry storage facility proposed consisted of two concrete pads, each 50' wide by 250' long, 3' thick, surrounded by an 8' security fence and located about one-half mile from the plant. The project also included a shielded transfer cask and transporter. Some rel *738 atively minor modifications to the plant would also be necessary. (Id. at WISC00014728, 14739.) WE proposed to load two casks in June of 1995, 1996 and 1997, and one cask in 1998.
As noted, although requesting only 12 casks, WE designed the ISFSI pad to be large enough to handle 48 casks, enough to store SNF through the end of Point Beach’s then-licensed life. “[WE] believes that it is necessary to plan for the possibility that the DOE may not meet its schedule____Due to the uncertainties of the development and operation of the federal Waste Management System, [WE] believes that construction of an ISFSI provides appropriate assurance that [SNF] can be stored safely with minimal cost. Additional spent fuel storage capacity can be added if and when needed to ensure continued plant operation.” (PX 236 at 4.)
Robert Link was promoted to Vice President of WE’s Nuclear Department in 1992 and re-evaluated the dry storage application at that time. From his extensive experience in plant operation and regulatory matters, particularly with the PSC, he viewed the then-pending PSC application as “critical” and a “life-and-death” project for WE. He knew Wisconsin had a nuclear moratorium; the PSC staff was not then particularly pronuclear; and he expected a number of groups would intervene to try to stop either the dry storage project or the replacement of the steam generator in Unit 2 (discussed later herein), either of which would effectively shut down Point Beach. He asked for staff evaluations to assure himself that these projects remained appropriate. He had overseen the replacement of the steam generator in Unit 1 and was cognizant of requirements there. He wanted to become familiar with long-term storage solutions, so different strategies were evaluated in light of then-expectations concerning DOE’s delays. Even if and when the PSC approved the project, WE was not obligated to proceed. (Tr. 351:24-25; 352;l-6 (Link).) Mr. Link testified that other fuel management options were considered, including building another wet pool; expanding the existing pool; rer-acking to allow for a greater density or array of fuel; extending fuel cycles; fuel consolidation — taking the rods out of and collapsing the fuel assembly so that it takes up less space; changing the reactor core design; and using a temporary rack in the cask pit area. (Tr. 515:14-519:6 (Link).) His conclusion was that WE’s pending PSC application should be implemented if approved. (Tr. 335:4-13 (Link) (“We evaluated different strategies, different opportunities in that regard, as well as what the status of DOE was in terms of meeting its obligation in 1998, and through those assessments and evaluations, I was satisfied that the already filed, actually, application for dry fuel storage that [WE] had filed, actually previous to my tenure as vice president, was the appropriate strategy to go forward with.”);Tr. 570:18-571:5; 579:23-580:3 (Zabransky) and 323:20-324:7 (Link) (Sol Bernstein, vice president of nuclear, and later Robert Link, also vice president of nuclear, had the authority to bind WE).)
The court credits trial testimony, including that of Messrs. Link and Krieser, which together with the preponderance of the evidence, supports the conclusion that DOE’s delays were the substantial causal factor for dry storage and that “but-for” DOE’s delays, WE would not have pursued it. Mr. Link testified:
Q. Given the results of the briefings that you received and the fact that [WE] could operate until 1998, as you indicated, why did you decide to proceed with the dry storage application?
A. It was clear in my mind that DOE was not going to be picking up fuel as required in 1998. As I mentioned before, to assure the continued viability of Point Beach as an asset to serve its customers and its stockholders, it was necessary to implement a strategy that was safe and efficient and had characteristics that would be compatible with being integrated to DOE’s responsibility to take the spent nuclear fuel. Dry fuel storage had the attribute of modularization, and that is, as I mentioned before, you could build and grow it as necessary, but that means you wouldn’t have to overextend your commitment in terms of storage capability.
*739 Q. And why was it clear to you that DOE was not going to be picking up fuel as required in 1998?
A. I’m sorry. Could you repeat that?
Q. Why was it clear to you that, I believe you said it was clear to you that — I’m sorry, the Department of Energy would not be picking up in 1998, and I’m asking you the basis for that statement.
A. Well, my own personal knowledge, as I’ve stated before, in terms of interactions with [Nuclear Energy Institute], my colleagues of the industry, our own assessments, but DOE itself, in their proclamations, said they were not going to be ready until, at the earliest, 2003, and then later, later dates were pronounced. The Public Service Commission staff assessed that they would not be performing as well as the intervenors, essentially assessed that they would not be performed.
(Tr. 352:7-25; 358:1-22 (Link).)
That these assessments were made in the breach world was confirmed by Mr. Gary Krieser. 31
So [WE] had already made a decision at that point, prior to Bob [Link] becoming vice president, to proceed with an application for the [PSC], for a dry storage facility at Point Beach, so when Bob came in, we were already on that path. When Mr. Link came into that position, we were already heading down that path. Bob was a pretty pragmatic person, I think, in many respects, so he wanted very clearly to understand what the situation was at Point Beach, as far as the spent fuel situation and the spent fuel pool and things of that nature. He wanted to, you know, to make sure that he clearly understood what the situation was and what the conditions were that we were dealing with. He also was very familiar with the [PSC] process for obtaining approval for projects, and he knew that the process was going to be a very contentious one. There was certainly going to be opposition, and it was going to be just a huge effort that we would have to put forth to gain approval for that project. So he wanted to, you know, make sure that in fact that was the right path to be on. So he requested people, myself and people that reported to me, to conduct an evaluation of all the circumstances, number one, to evaluate whether or not dry storage was the right path to be on. We also looked at various other options and alternatives, such as extended fuel cycles, what would be the benefit of that, changing some of our core designs, taking into effect higher enrichments, higher burn-ups of fuel, that type of thing, looking at the fuel pool to determine if we had actually maximized the capacity of the pool, were there spaces that could be recovered for fuel purposes. And we looked at other things too, like the use of temporary racks in various parts of the pool, and the cask laydown area was one area, the fuel transfer canal, there were areas within the pool that we felt could be used for fuel storage, at least in a temporary basis, if we needed it.
Q. And what were the results of these evaluations that Mr. Link requested your group to perform?
A. I would say, in a nutshell, the conclusion was — and, of course, again, this was based on the fact that DOE was not going to be there in 1998. We needed to address the situation in a long-term fashion, so we needed a long-term solution, we essentially confirmed that that was certainly the ease, and we also concluded that dry storage was really the best option to solving that particular problem.
Q. And why would you believe that dry storage was the best option for solving that particular problem?
A. Well, again, we needed a long-term solution. We were going to need considerable amount of additional storage space. Dry storage, at least the system that we were pursuing, was essentially a modular *740 system. We could add it incrementally, cask-by-cask. The costs were reasonable, and it did offer the opportunity for substantial amount of additional storage.
Q. And I believe you mentioned that it was the opinion of folks at [WE] and possibly most, if not all, of the industry that DOE would not be performing in 1998, do you remember that discussion?
A. Yes, I do.
(Tr. 1521: 24-1524:25 (Krieser).)
Mr. Link was specific in his testimony before the PSC that Point Beach could operate until 1998 and a “full” pool by 1995 included a reserve of 121 spaces for FOR. “[T]he pool will be full and the plant would have to be shut down in 1998 without additional storage capacity.... In order to maintain [FOR] in the spent fuel pool, additional capacity must be made available in 1995.” (PX 907 at 425-26.) In pre-filed testimony for an October 11, 1994 PSC hearing, Mr. Link testified that Point Beach could make it to 1998. “Given the number of assemblies currently in the pool and the current rate of additional spent fuel generation, the pool will be full and the plant would have to be shut down in 1998 -without additional storage capacity.” (PX 355 at 6.) That DOE had a contractual as well as a statutory obligation to take the SNF did not mean that WE expected DOE to begin performance in January of 1998. It bears repetition that this October 1994 testimony was five months after DOE’s May 1994 Federal Register announcement that it would not begin performance by 1998, and did not have a legal obligation to do so in the absence of a repository.
The court also credits testimony of other witnesses generally in accord. David Za-bransky, DOE’s contracting officer and government witness, admitted that WE represented to the PSC that Point Beach could operate until 1998 without dry storage albeit without room to unload the reactors. (Tr. 1164:16-1165:14 (Zabransky).) Others testified similarly. (Tr. 1530:19-1531:3 (Krieser) (“Q: Wasn’t it your understanding at this time that, if DOE had performed under the [Standard [C]ontract, that [WE] would not have built dry storage? A: There’s no question in my mind that that’s what we believed, and that was certainly my understanding, yes. Q: And does that remain your understanding today? A: Yes, it does.”); Tr. 2813:25-2814:18 (Conry) 32 (It was the general understanding of the nuclear power department that Point Beach could operate until 1998 without dry storage.); Tr. 2552:3-2553:6 (Farron) 33 (Point Beach could have operated until 1999 without dry storage).)
The PSC required an environmental impact statement (“EIS”), and issued a draft *741 EIS in February of 1994, soliciting public comments. Alternatives to dry storage, including operating only during peak demand, were considered to extend the time before the pool would be full. While staying within NRC limits, the draft report stated that with a seven percent increase in “burnup” of fuel in the reactor core starting in 1995, Unit 1 could operate until 1998 and Unit 2 until 1999. (PX 326 at WISC00003940.) Replacement power, while technically feasible, would be more expensive than the proposed dry storage, and take up to eight or more years to implement. (Id.) The draft EIS concluded: “Point Beach would be shut down in 1999 if DOE does not begin taking spent fuel. If DOE begins taking spent fuel under present policies in 1998, Point Beach may be able to continue to operate.” (PX 326 at WISC0003939.) The ESR pointed out that WE could delay the need for the dry storage proposed based on a combination of alternative, but that “the uncertainties of federal acceptance plans limit the meaningful assessment” of alternatives; therefore WE “has not attempted to evaluate these potential alternative combinations.” (PX 236 at 59.)
Nuclear generation supplied approximately 25 percent of WE’s electricity. (DX 3 at 6; Tr. 108:2-21 (Baumann).) 34 This generation was emission-free and comprised WE’s most cost-efficient power source. The PSC staff estimated that if Point Beach was shut down in 1998, it would cost approximately $300 million ($25 million annually) in additional costs to the ratepayers for replacement energy. (PX 326 at WISC00003885.) If Point Beach was converted to a coal-fired plant, sulfur-dioxide, nitrogen oxides, particulates, ash and carbon dioxide emissions would increase dramatically. (PX 326 at WISC00003950-54.)
The PSC’s final EIS published in August of 1994 was consistent with the draft. (PX 346 at WISC00003553, 3588, 3634, 3650, 3661-65.) Shut-down of Unit 1 was predicted for spring of 1998 — Unit 2 in the fall of 1998. The EIS assumed no timely DOE performance at any removal rate. 35 These estimates are consistent with Mr. Hennessy’s calculations discussed subsequently, and as prepared by the PSC, they independently corroborate WE’s position that Point Beach could operate to 1998 with its existing spent fuel pool.
Some three years after WE’s application was submitted, the PSC issued an Order in February 1995, authorizing the ISFSI construction and the purchase and loading of 12 VSC-24 casks. Confirming Mr. Link’s predictions about the level of opposition, and supporting the conclusion that DOE’s delays were the substantial causal factor for dry storage, the PSC’s Final Order stated (in part):
The question of whether nuclear waste should be stored at Point Beach outside the existing plant building created intense controversy among the public, in the local area, throughout the state, and beyond the state’s borders. The Commission granted $253,122 in intervenor compensation to citizens’ groups to insure that all points of view were adequately represented. Several hundred people appeared at the hearings, and some of them attended more than two weeks of hearing.
The public and intervenor parties raised serious questions about the potential for an ISFSI to become a de facto permanent *742 repository, perhaps for more waste than is generated at Point Beach. The length of time that spent nuclear fuel remains at Point Beach is not a function of the storage method. It is a function of the federal government’s actions in siting and licensing a permanent repository or retrievable storage facility, and taking possession of the waste. This Commission has consistently urged the DOE to proceed with shouldering these responsibilities, and has supported legislation and participated in litigation to further that end.
(DX 82 at WISC00011696.)
DOE’s delays from 1998 to 2010 and perhaps beyond, and WE’s ability to operate until 1998 were recited. WE needed additional storage by 1995 in order to maintain FOR and “[without additional storage capacity to accommodate discharged spent fuel from continued operation, the plant would have to be shut down in 1998. At that point, it would have filled the storage capacity of the spent fuel pool and both reactors.” (Id. at WISC00011684-00011685.) “By 1998, assuming the present level of plant operation, the spent fuel pool and both reactors will be required to store the [SNF] generated at Point Beach. Without removing some of the spent fuel, it will become impossible to operate the plant past 1998.” (DX 82 at WISC00011701.)
The PSC acknowledged that (1) DOE was obligated to perform under the Standard Contract, but was not going to start in 1998; (2) WE had paid more than $130 million to date (costs that had been passed on to ratepayers); and (3) “[i]t is unlikely that the DOE will have a permanent spent fuel repository in operation before the year 2023. When or whether DOE will begin taking spent nuclear fuel is a matter of speculation.” (DX 82 at WISC00011702.)
In its February 9, 1995 Final Order approving WE’s application to build the ISFSI and purchase and load VSC-24 casks, the PSC concluded that: (1) without additional storage, Point Beach would have to shut down in 1998 and additional storage would be needed to decommission the plant; and (2) Point Beach provides low-cost electricity, and its loss would have a major effect on the provision of electricity at reasonable rates. (PX 374.) The PSC summarized its analysis and conclusions that there were no viable alternatives to the ISFSI given DOE’s failure to perform its contractual obligations. (PX 374 at 22.) “Dry cask storage for the [SNF] generated at Point Beach is superior to all the other storage options available at this time from an environmental, engineering and economic standpoint.” (Id. at 23.)
The public convenience and necessity require [WE] to construct an ISFSI consisting of two concrete pads and 12 model VSC-24 casks, along with other ancillary construction as described in the findings of fact, for the purpose of storing 288 spent fuel assemblies from the Point Beach Nuclear Generating Plant, at an estimated cost of $10,678,000.
(Id. at 24.)
The government does not question foreseeability with respect to WE’s decision (and the PSC’s approval) to purchase the VSC-24 system. Indeed, DOE’s participation with WE in an early VSC demonstration project speaks to its foreseeable use and supports WE’s initial decision to utilize that cask, one of only a few at that time approved by the NRC. The PSC noted that “[n]o cask which is currently licensed by the NRC has been shown to be clearly superior to the VSC-24 in engineering, safety, or environmental impact.” (PX 374 at 22.) The VSC-24 was also used by at least one other utility during this time. Sys. Fuels, 79 Fed.Cl. at 49 ; see also Kelley v. Selin, 42 F.3d 1501,1510-21 (6th Cir.1995) (affirming NRC’s approval of the VSC-24 cask at the Palisades nuclear plant).
The government takes the position that WE would have constructed an ISFSI even if DOE commenced performance in 1998. However, much of the evidence relied on by the government for its position that WE’s expenditures were not caused by DOE’s delays (and similarly would have been incurred in the non-breach world) reflects DOE’s impending breach. At least by the late 1980’s WE was aware of and responding to anticipated delay in DOE’s performance. WE’s actions and statements are viewed with this awareness. A plausible hypothetical *743 but-for or non-breach world must be free of any taint of impending breach. For “measuring what, hypothetically, would have happened,” the non-breach world must be “offense-free.” LePage’s, Inc. v. SM, 324 F.3d 141 , 165 (3d Cir.2003); see also Bonjorno v. Kaiser Aluminum & Chem. Corp., 752 F.2d 802 , 812 (3d Cir.1984) (noting that a hypothetical world free of alleged trade restraint should be “free of the defendants’ exclusionary activities”); In re Aluminum Phosphide Antitrust Litig., 893 F.Supp. 1497, 1501 (D.Kan.1995) (comparison to actual world is to one “absent illegal conduct”). The Federal Circuit acknowledged that even the 1987 ACR — the standard for the non-breach world — could, to some extent be, tainted. PG & E II, 536 F.3d at 1291-92 (“This court has considered that even the 1987 report could reflect some distortion, given its preparation nearly contemporaneous with the 1987 Amendments Act____The 1987 ACR process [nevertheless] provides the best available pre-breach snapshot of both parties’ intentions for an acceptance rate.”).
As previously noted, the government relies on Mr. Link’s PSC testimony that WE would need dry storage even if DOE performed. In his second day of PSC testimony, under cross-examination by counsel for intervenors, Mr. Link testified that “[w]e still need an ISFSI prior to 1998 which is the first date by which we believe DOE is obligated to take fuel. Yes, we considered DOE obligated to take fuel starting in 1998. That does not negate the need for the ISFSI.” (PX 907 at 534.) In other words, regardless of what the Standard Contract requires — DOE is not going to start performing on time and the ISFSI is needed. The government’s citation to, and interpretation of this testimony, does not take into consideration the context in which it was presented — the near' certainty that contract performance would not commence for some period of years after 1998.
In support of its position that WE still believed DOE was going to begin performing in 1998, thus the pursuit of dry storage was unrelated to an anticipated breach, the government cites a WE internal newsletter “Synergy,” DX 283, published on June 26, 1992 (after WE’s PSC application was filed) which summarized the project and expected political opposition, citing the Minnesota dry storage project. (Id. at WEP006 0501.) The article entitled “Spent Fuel [-] What happens when the pool is full?” remarked that “[b]y mid-1995, the pool will be full.” (Id.) Again, however, “full” includes 121 spaces reserved for FCR. (Id. at WEP0060502.) The article’s inclusion of historical pool space, expectation that 53 previously unavailable spaces may become available with the purchase of a special handling tool, and anticipated political opposition to the PSC application, are not inconsistent with other statements WE made and do not detract from the preponderant evidence supporting DOE delay as the substantial factor causing WE’s dry storage project.
WE’s mention in internal planning documents that DOE might perform in 1998 does not equate with reliance that DOE would begin to perform in 1998. The court credits witness testimony and documents, particularly DOE’s notice to utilities that it would not be performing by 1998; assertion it had no obligation to do so in the absence of a repository, and WE’s clear statement that DOE’s delays were the reason dry storage was needed in its PSC Application and Forms 10-K for 1988 through 1991.
Other documents also inform the court’s conclusion that DOE’s delays caused the dry storage decisions and expenditures. An October 26, 1992 letter from Larry Martin, of the law firm of Quarles & Brady (WE’s counsel in the PSC application) to Lynda Dorr, Assistant PSC Secretary, concerned a request by intervenor Citizens Utility Board (“CUB”) for $91,000 to perform several tasks. Mr. Martin proposed eliminating three of the tasks which would reduce the requested fee (and fees, including those of intervenors, are paid by WE and passed through to ratepayers). One of the proposed tasks was to review DOE’s plans and likelihood of performance. Unnecessary, Mr. Martin asserted. DOE’s plans were public, whether or when DOE would perform was a matter of great speculation and CUB would not be able to add substantively to that conjecture to assist the Commission. “Indeed, it is the uncertainty with respect to DOE’s *744 plans which prompted [WE’s] development of the flexible spent-fuel storage installation plan proposed in this proceeding. That uncertainty will not be resolved in this proceeding by paying for CUB’s speculation.” (PX 266 at 2.) Mr. Link was copied on the letter.
The court determines on the basis of record evidence that DOE’s substantial delay was the “but-for” cause and the substantial factor underlying WE’s dry storage project.
The non-breach world
WE must also establish that the mitigation costs it seeks would not have been spent in the plausible non-breach world — the hypothetical universe where DOE performed starting on or before January 31, 1998 at the rates in the 1987 ACR. Yankee II, 536 F.3d at 1274 (“[T]his court interprets the Standard Contract as requiring the Department to accept SNF and HLW in accordance with the 1987[ACR] process.”); PG & E II, 536 F.3d at 1292 (“[T]his court concludes that the Standard Contract required DOE to accept SNF/HLW in accordance with the 1987 ACR process.”).
While contesting the premise with rigorous cross-examination, the government did not introduce evidence of what WE would have done in the non-breach world. The government’s expert Mr. Hamal did not opine on this matter. (“Q: So you never evaluated whether or not [WE] believed earlier in time like in the '80s or '90s whether DOE was going to be substantially delayed. And if so whether that would have impacted [WE’s] analysis of its spent fuel storage alternatives, correct? A: I haven’t offered an opinion on that, no.”) (Tr. 5970:12-20 (Hamal).)
For the following reasons it is concluded that dry storage would not have been built had DOE commenced performance by no later than January 31,1998 at the 1987 ACR rates. If DOE had timely performed at the rates under the 1987 ACR, WE would have had a total of 482 assemblies removed through 2002 which would have alleviated WE’s storage problems.
The PSC’s Findings of Fact, Conclusions of Law, Certificate, 36 Order and Interim Order includes findings on the need for the ISFSI. (PX 374 at KRGWE002335-36.) Despite DOE’s 1998 contractual start date, “there is no federal facility for storing or disposing of the spent fuel nor is one expected to be operating by 1998. DOE does not expect that any disposal facility will be operational before the year 2010. Other estimates range from 2023 to indefinite.” (PX 374 at KRGWE002335.) Consequently, the PSC concluded, dry storage was needed in 1995 in order to maintain one FCR and the pool would be completely full in 1998. Alternatives were “very limited” “[b]ecause of the anticipated failure of the federal government to fulfill its promises.” (Id. at KRGWE002343.)
The range of options in the non-breach world would not have been so constrained with full government performance commencing in 1998. WE had several alternatives it could explore. It could have reduced discharge quantity or frequency; used fuel management techniques; made previously unusable spaces usable; purchased a temporary cask pit (the cost of which WE deducted from its requested recovery); reduced generation; tolerated less than FCR; or a combination thereof so as to avoid dry storage.
Nuclear engineer William Hennessy, 37 employed by WE since 1989, was involved with core design, the acquisition of the offset fuel handling tool, dry storage and spent fuel management. He was promoted to Supervi *745 sor, Reactor Engineering in 1993 when WE’s PSC dry storage application was pending. His responsibilities included “keeping track of the items that are placed in the spent fuel pool, knowing where they are, knowing what they are, and performing annual inventory of those components.” (Tr. 845:25; 847:1-3 (Hennessy).) He understood at that time that DOE’s performance would not start in 1998, therefore WE was constructing dry storage in order to continue operations. The court credits his testimony in concluding that DOE’s delays caused WE to build dry storage, and that but-for these delays, in the non-breach world, dry storage would not have been built.
WE inventories its wet pool annually, using underwater cameras and other sophisticated equipment to count assemblies and check for damage, leaks or other problems in the assemblies or racks. Mr. Hennessy performed and signed WE’s 1993 inventory, his first as Supervisor of Reactor Engineering. (PX 311.) Following the spring 1993 refueling, there were 1221 assemblies in the pool.
A December 16, 1993 internal memorandum (the Fieldhack memo, PX 321) utilized data from Mr. Hennessy’s Reactor Engineering Group (he was copied on the report) and concluded that the pool had 1502 spaces: 1249 spaces filled with assemblies; 217 empty and “good:” and 36 used to store other than SNF. Of those 36 spaces (identified by grid numbers), two spaces, SA-23 and SA-62 were “inaccessible under the canal doors,” because they were under the door hinges of the spent fuel pool canal doors and could not be used to store assemblies. Seventeen spaces contained debris baskets filled with radioactive materials from past modifications or maintenance. These non-fuel components could have been taken to a low-level disposal site in Barnwell, South Carolina or stored in an on-site mausoleum, thereby freeing those spaces. (Tr. 858:17-861:2 (Hennessy).)
A dummy assembly and a location spacer were stored in two spaces. The spacer was removed. WE could have removed the dummy assembly which is not highly radioactive. It could have been rinsed, bagged, tagged and stored somewhere out of the pool. Accordingly, these two spaces could have been cleared. (Tr. 862:4-22 (Hennessy).)
Nine spaces were categorized as damaged, including spaces that had protrading metal that could harm an assembly. These spaces were reinspeeted. Seven could be used without restriction; two could be used with restriction. (Tr. 862:25-864:13 (Hennessy).) Six spaces with brackets, used to hang tools or equipment, were listed as “[ajceessible with OFHT 38 after modification.” The brackets were removed and all six spaces used to store assemblies. (Tr. 864:18-865:13 (Hennessy).)
In total, 251 spaces were either empty, emptied or could have been made available with minimal effort. Because there was adequate space in the pool at that time these actions were not taken. (Tr. 866:24-867:6 (Hennessy).) That does not mean that in the non-breach world, those spaces could or would not have been emptied. Subtracting the two spaces that were under the canal door hinges, WE’s effective pool capacity was 1500 spaces. (PX 381 (RW-859 NRC report at AHQR3640809.))
At trial, Mr. Hennessy methodically computed WE’s historical pool inventory starting in July of 1991 with 1109 fuel assemblies after the spring refueling discharge. This number is contained in the Environmental Screening Report (“ESR”) 39 submitted with WE’s PSC application in November of 1991. (PX 236 at WISC00014796.) While elsewhere in the ESR it is reported that 1126 spaces are filled with SNF assemblies or other waste components, Id. at WISC00014753, the accommodating and re *746 medial measures to free-up spaces that could, and in some instances, were taken, accounts for the 17 space difference. As part of his trial testimony, with a starting pool inventory of 1109, Mr. Hennessy assumed a 28 assembly-discharge for one reactor in the spring and a 28 assembly-discharge for the other reactor in the fall (replaced with new fuel assemblies inserted in the particular reactor core) which added to the total. Future pool inventory was predicted:
After spring discharge After fall discharge
1991_1109_1137
1992_H65_1193
1993 1221 40 1249
1994_1277_1305
1995_1333_1361
1996_1389_1417
1997 1445 1473
1998 1501
(Tr. 872:6-873:20 (Hennessy).)
Mr. Hennessy concluded that even without any fuel management techniques, change in the number of assemblies discharged in each reload or the length of time between refueling cycles, Unit 2 could have operated until the fall 1998 discharge and Unit 1 until the spring 1998 discharge. (Tr. 873:21-874:7 (Hennessy).)
As the supervisor of Reactor Engineering during this period, and having the opportunity to observe his demeanor, Mr. Hennessy’s testimony is given considerable weight. His conclusions are also independently supported by other evidence.
Furthermore, in addition to freeing-up spaces, discharges into the pool could have been reduced by fuel management to extend the intervals between refueling to postpone discharges and prolong available pool space. “Yes, there would have been strategies that could have been employed to get us to through to 1998 and beyond.” (Tr. 874:24-875:1 (Hennessy).)
Q. Let’s talk first about capacity changes that might have been possible in the pool. Describe those.
A. In the spent fuel pool, we could have increased the capacity of the pool by installing small racks in locations that had available holes in them, such as the periscope location and the tool storage location.
Q. What about fuel management strategies?
A. Regarding fuel management strategies, at that time, we were operating under 28 reload core designs, and we could have reduced the number of reloads to 24, for example, and gained four fuel assemblies per unit, per year. The sooner we started that strategy, the more we would have gained. If we could have gained eight fuel assemblies per year, beginning early on, you can see that there would have been quite a few — fewer fuel assemblies in the spent fuel pool over time.
Q. Any other strategies, besides shifting to the 24 feed — any, would there be any other fuel variables that could be changed to operate longer?
Q. For example, to make the fall outage occur later in time, could any steps have been taken to do so?
A. The unit could have been coasted down to make the fall outage run longer, which means a reduction in power as the fuel is burned up, and we have done that in the past.
(Tr. 875:3-876:15 (Hennessy).)
Mr. Hennessy testified that if DOE had started performance in 1998, dry storage would not have been built.
Q. Let’s talk a little bit about what [WE] would have done if DOE had actually performed. If DOE had taken spent fuel starting in 1998 from Point Beach, would Point Beach have needed dry storage?
A. No, sir.
Q. What was your basis for saying so?
A. My basis for saying so is that, knowing we recovered spaces in the spent fuel pool and also that we could have changed *747 our core operating strategy, had we chose to do so, we could easily have made it to 1998 without dry storage.
Q. If the racks had become — if dry storage had not been used, would there have been any problem with in-service testing or other requirements for the Point Beach spent fuel pool?
A. In-service tests and other types of tests are planned activities, the status of the spent fuel pool would have been known well ahead of time, and the planning of those activities could have been, could have accommodated conditions in the spent fuel pool.
Q. Would Boraflex testing have prevented Point Beach from operating until 1998? A. No, Boraflex testing would not have prevented Point Beach from operating until 1998.
Q. Mr. Hennessy, are you familiar with the term [“FCR”]?
A. Yes, I am.
Q. And could you please just define [FCR]?
A. [FCR] is a strategy to maintain enough open spaces in the spent fuel pool to unload a reactor core.
Q. Was there a[FCR] policy at Point Beaeh[?]
A. There is no [FCR] policy at Point Beach.
Q. Has Point Beach operated without [FCR] while you’ve been at Point Beach? A. Yes, twice, I believe.
Q. Why isn’t [FCR] a requirement?
A. I’m sorry, please repeat that.
Q. Is there a reason why [FCR] is not required?
A. [FCR] is not required because the reactor coolant system and decay heat removal systems in the reactor are perfectly capable of removing decay heat and maintaining the fuel assemblies safely in that condition. [FCR] is a business decision, it’s not a safety decision. Therefore, there’s no requirement for it.
Q. Would it have been possible to preserve [FCR] through a temporary rack and a cask pit?
A. Yes, it would be.
Q. And would there have been any operational impacts to having a cask pit rack for full core offload capability?
A. The operational impacts would be that, if we needed to load a cask, we would have to remove the cask pit rack.
Q. And would that have been a problem? A. It would have required some additional work, but not a great deal of additional work.
Q. Was there any limit on how many times the plant could have operated with the pool configured with a cask pit rack with 121 spaces?
A. No the temporary rack would be qualified to the same extent that the permanent racks are, and therefore, there would be no limit to the number of times that we could use that.
Q. Would there be any limit on the duration of how long a cask pit rack could be used?
A. No.
(Tr. 892:9-25;893:l-25;894:l-25;895:l-16 (Hennessy).)
WE took some of these actions in the breach world which supports the plausibility and probability that WE would have taken these or similar actions in the non-breach world. In October of 1993, Mr. Hennessy worked with WE’s fuel department (the 24 feed feasibility team) to evaluate switching from a 28 to a 24 assembly reload. 41 (Tr. 877 (Hennessy); PX 313 at 1 (“Reducing the number of feed assemblies is desirable to minimize the amount of high level waste produced at the plant.”).)
Mr. Hennessy also helped develop the procedures for loading the VSC-24 casks and was familiar with the hydrogen ignition incident which led to the NRC’s ban on use of that cask, addressed supra. He was tasked with recovering pool space in case the NRC did not lift the ban. He returned to the *748 Fieldhack memo, PX 321, reexamined spaces, and on July 3, 1996, reported that seven of the nine spaces identified as damaged were immediately usable. The other two were later recovered with restrictions. (PX 423; Tr. 885.) Ten spaces that held trash baskets or other slightly contaminated low-level material were also recovered. WE contracted with WMG, Inc. to remove HLW from the pool which recovered four more spaces. (Tr. 885:23-887:6; PX 459 (June 1997 Report to WE from WMG, Inc.).) A vacuum device and a reactor vessel specimen basket were moved to the spaces under the door hinges, which as noted previously, were unuseable for SNF, resulting in two more available spaces. (Tr. 887:9-16 (Hennessy).) Removing brackets in late 1997 made six additional spaces available. (Tr. 887:19-888:10 (Hennessy); PX 461.) A spacer was removed, adding another space. Two more spaces (holding the dummy fuel assembly) could have been made available easily but were not. In sum, a total of 32 spaces were actually made available (and could have been available earlier) and another two could have been cleared, which would have brought the total additional spaces to 34. In the breach world, when a possible need was anticipated, WE found additional storage. WE would have reacted similarly in the non-breach world.
WE also considered installing racks in the periscope location, the tool location and the cask loading area. (Tr. 890:17-21 (Hennessy).) Mr. Hennessy testified that he investigated these possibilities because of the concern that dry storage might be halted again by the PSC. (Tr. 890:17-25; 891:1-2.) A mini-rack in the periscope area, if approved by the NRC, could hold four assemblies. Six assemblies could fit in the fuel elevator space and the tool storage area could hold a mini-rack with 16 assemblies. (Tr. 959:7-25; 960:1-6 (Hennessy).) Use of these mini-racks in the non-breach world would have increased pool capacity to 1526.
Mr. Michael Baumann, 42 Manager of Nuclear Fuel Commodities and Supply, performed a similar projected pool inventory starting after the spring 1994 discharge, with 1277 assemblies in the pool. 43 Discharges from the two reactors are staggered over time. Generally, one unit would discharge in the spring and the other in the fall. (Tr. 124:12-126:1 (Baumann).) Assuming a twelve-month cycle with 28 assemblies discharged per reactor per year, he calculated that at the end of 1997 there would have been 1473 assemblies in the pool, and following the spring 1998 discharge, the pool inventory would be 1501. (Tr. 166:4-171:4 (Bau-mann).) He concluded that Unit 2 could have operated through the fall of 1998, and by unloading 24 rather than 28 assemblies from the reactor core in the fall, Point Beach could have stayed within the 1500 space pool capacity and operated “somewhat short of the spring of 1999.” (Tr. 170:14-171:1-4 (Baumann).) Also consistent with Mr. Hennessy’s testimony, Mr. Baumann testified there were fuel management techniques that *749 could have reduced discharges into the pool and prolonged the time until the pool was full which would and could have been done if DOE’s timely performance was expected. Coasting (operating the core at less than capacity for four to six weeks) could also have extended times between reloads. Changing enrichment levels, using fatter diameter rods, higher burn-up assemblies or longer fuel cycles, and other measures could also have been used to maximize and extend pool capacity. (Tr. 171:6-173:2 (Baumann).) Those measures were not taken in the breach world because given no DOE performance they would not have alleviated the critical long and short-term needs that had to be addressed to prevent Point Beach from shutting down which would then require substituting replacement energy at a higher cost both economically and ecologically. WE “did not focus” on short-term storage solutions because, like the comparable situation in neighboring Minnesota, they “would not have satisfied the utility’s need for a long-term storage solution.” N. States, 78 Fed.Cl. at 461 .
The evidence demonstrates that if DOE commenced full performance by no later than January 31, 1998, additional SNF storage on site would not be needed, and that WE’s acceptance allocations would gradually decrease pool inventory. As Point Beach has some of the oldest fuel, it has significant allocations in the first two years of DOE acceptance — 1998 and 1999. Mr. Shimon, former Manager of Nuclear Fuels and Administrative Services, testified:
The January 31, 1998 date for commencing removal was critical to [WE] because we expected to be able to provide our own storage through that date, and if the program commenced on January 31, 1998, we would not have to build additional storage. There was also an ordering philosophy in that contract that had to do with removal of oldest fuel first. And being one of the older nuclear plants in the country, we also had some of the oldest fuel, and this would entitle us to more of the early shipments than some of the newer plants.
(Tr. 1241:10-23 (Shimon).)
We were aware of the number of storage spaces that we had in the pool. We knew how many spaces were occupied, and we were able to project from our fuel cycles the number of spent fuel assemblies that would be discharged to the pool. Based upon all of those factors, the pool — we were convinced that the pool capacity would not be exceeded by January 31, 1998____ The rate would be sufficient to preclude utilities from having to add additional spent fuel storage capacity after January 31, 1998 and would work off the backlog of spent fuel over a reasonable period of time____Based upon all of the discussions we had with DOE at that time and pronouncements that they made, we believed that they were in agreement with us.
(Tr. 1245:7-1246:10 (Shimon).)
An inventory of pool space over time in the non-breach world was prepared by WE’s economic expert Mr. Richard Sieracki, 44 starting in 1998 with 1422 assemblies. This differs from Mr. Hennessy’s and Mr. Baumann’s inventory at the beginning of 1998 of 1473. This difference, while not material, is attributable to the “lost year of production” in the breach world where both reactors were shut down for a year; accordingly, there were no discharges of assemblies into the pool in that year. The court uses an earlier inventory perspective because WE’s planning would been prior to 1997 recognizing the need for a long lead time for storage decisions, approvals and acquisitions. This lost year of pro *750 duction does not alter the result in this regard.
Other witnesses testified that WE would not have built dry storage if DOE had performed. (Tr. 427:12-17 (Link) (Q: “If DOE had performed, would [WE] have avoided the need to construct dry storage? A. Yes, if DOE performed under their obligation of the contract, we would not have pursued dry storage.”); Tr. 1527:12-19 (Krieser) (“Q: Did your group ever make a determination as to whether Point Beach could have operated until 1998 without dry storage? A: We evaluated that issue extensively and regularly, and we always were able to conclude that we could make it to 1998, and even slightly beyond, in some instances, without a dry storage facility.”); Tr. 2813:25-2814:18 (Con-ry) (It was the general understanding of the nuclear power department that Point Beach could operate until 1998 without dry storage.); Tr. 2511:11-24 (Farron) (“Q: When you joined [WE], did you gain an understanding regarding why [WE] had submitted its dry storage project application to the [PSC]? A: Basically, from the minute I took a position with [WE], I was informed that DOE was not going to pick up spent fuel in 1998, and it was a major concern for the utility because, after 1998, the plant did not have permanent storage, spent fuel storage capability in the spent fuel pool.”); Tr. 2552:23-2553:6 (Farron) (Point Beach could have operated until 1999 without dry storage); Tr. 2577:6-9 (Farron) (“Based on my knowledge and understanding, definitely the utility would have preferred to use something other than dry fuel storage in the nonbreach world.”); Tr. 1164:16-1165:14 (Zabransky) (WE indicated to the PSC that Point Beach could operate until 1998 without dry storage).)
Just because WE built dry storage and started loading casks in 1995 does not mean WE would have done the same in the non-breach world. The court credits witness testimony that once PSC approval was obtained, there was no reason to wait, particularly given DOE’s ever-receding predictions of the start of performance. (Tr. 1491:9-13 (Shi-mon) (“What I’m saying is that the date on which we made the facility operational was no longer relevant because there was no point in trying to get to 1998 since DOE was not coming.”)); Tr. 1529:2-1531:3 (Krieser) (“So if you accept that there really was no reason to wait to construct the facility because we were going to need the facility under any circumstances at that point, and so it really made no sense whatsoever to wait ... until the eleventh hour and cause us to have to rush to implement the system.”) And, pre-1998 loading restored or allowed for the maintenance of FCR, which was not required, but is preferred.
WE’s non-breach world position requires Point Beach to operate for a while without FCR. The government points to WE’s PSC application for the dry storage project that stressed the need to maintain FCR, and argues WE would not have operated without FCR and thus would have built dry storage and purchased and loaded casks in the non-breach world. By letter dated May 22, 1992, responding to an inquiry by CUB as to why FCR was a goal even though it is not required by the NRC, WE responded with the advantages of FCR:
[WE] believes that maintenance of at least one [FCR] is a good operating practice because of the flexibility that this reserve affords during normal operations and maintenance activities.
• From time to time, it is necessary to remove all the fuel assemblies from the reactor vessel in order to perform NRC-required in-service inspection of the reactor vessel. Such an inspection is being performed on Unit 1 during the current (Spi’ing 1992) refueling outage.
• The NRC also requires periodic surveillance of the spent fuel storage racks in order to verify the continued performance of the neutron absorbing material [Bora-flex] used in the racks. The surveillance is performed on randomly selected storage cells and requires that spent fuel be moved at least five spaces away in all directions from the test cell. This involves the movement of up to 120 fuel assemblies.
Neither of these activities would be possible without the maintenance of at least one [FCR],
*751 • In the past it has been necessary to perform maintenance activities on the reactor vessel or primary systems inside the containment. These activities have included the replacement of the Unit 1 steam generators and the upflow modification performed on both Unit 1 and Unit 2 reactor vessels. These projects would not have been possible without the availability of at least one [FCR],
(DX 54 at WISC00003436.)
Before the PSC however, Mr. Link testified that Point Beach operated without FCR on several occasions — May through September of 1974, November 1974, March 1975 and mid-October through mid-December, 1979. (PX 907 at 505.) And, as noted FCR is not required. Yankee II, 536 F.3d at 1275 (“[Ujtilities ideally maintain sufficient pool capacity to permit discharge of all fuel assemblies from the reactor core into the pool to accommodate maintenance and repair operations. Though the [NRC] does not require utilities to maintain such a “full core reserve,” it encourages them to do so.”).
The government argues that FCR was needed for Boraflex testing. The racks contain a chemical, Boraflex to address criticality. WE used to have mandatory, periodic testing of the effectiveness of Boraflex which required a FCR. These tests were done about every five years. In responding to questions posed by CUB, WE asserted that FCR was needed for Boraflex testing. Subsequently however, WE discontinued the use of Boraflex, and contends there is no reason why it could not have discontinued use of Boraflex earlier. While the government disagrees, this issue is essentially mooted in that WE asserts a temporary rack would have been used to achieve FCR in the non-breach world which would have accommodated any Boraflex testing. DOE defers to the utility whether and how to maintain FCR. (PX 44 (DOE’s June 1983 letter asking the NRC “not discourage utilities from encroaching on FCR at their own discretion.”).)
As noted, in the non-breach world, WE contends it would have maintained FCR capability with the purchase of a temporary rack capable of holding a full core that could be used in the cask pit area of the pool if needed. The cask pit would be required for loading to DOE casks so the cask pit rack would be inserted only if and when it was needed. WE deducts the cask cost from damages claimed. (PDX 60-Sieraeki 62; PX 805 at KRGWE003346.)
DOE encouraged the use of a cask pit rack for FCR.
The definition of [FCR] is understated if it excludes the capacity represented by the cask laydown area. The only argument against the use of the latter is that when doing so, it is not possible for ship [sic] in or out of the pool. This would not appear germane to a utility whose primary problem is to pull a core and make a reactor repair as expeditiously as possible. Inclusion of cask laydown area postpones loss of FCR by one to five years.
The cask laydown area should be put into use as temporary storage as its use can provide a significant postponement in the need for additional spent fuel storage.
(PX 774 at 2-3 (Oct.1983 DOE memo).)
“Cask pit racks are typically used to provide a temporary increased spent fuel storage capacity, particularly when spent fuel pools have large fuel inventories. Holtec has designed cask pit racks allowing a utility to preserve full core discharge capabilities.” (PX 827 at 3 (June 2006 Singh revised written testimony).) In PG & E I, a temporary cask pit rack was considered as a mitigation contingency in ease the dry storage application was not approved. 73 Fed.Cl. at 424-25. See TVA v. United States, 69 Fed.Cl. 515, 532 (2006) (noting possible use of temporary cask pit rack to restore FCR).
A cask pit rack would have provided sufficient space for temporary storage needs until 1998 (and beyond if needed), and in the non-breach world would have provided space in 1996 to unload the core of Unit 2 to replace the steam generator. Mr. Hennessy testified that the rack would have become integrated with plant operations and posed no hindrance or appreciable workload increase to these routine fuel management activities such as refuelings or inspections.
*752 The court credits the testimony of Messrs. Link and Farron that in the non-breach world, WE would have favored a temporary rack over dry storage.
Q: Would you have preferred to use a temporary rack, rather than build dry storage, if DOE had performed under the standard contract?
A: Yes. If DOE would have performed, the temporary rack concept had advantages over dry storage. One of the first ones would have been cost. Another one would have been, at least in my opinion, the overall risk profile of the strategy, and what I mean by that is a temporary rack is rather simple in concept, and I’ll even use the word ‘traditional,’ in concept.
Racks were being, we had reracked the pool, as I said, twice already, a temporary rack is no more than another type of rack, so it was a more simple type of technology to employ, while dry storage offered more complexities and was actually still a developing technology.
It also would have mitigated the need to unload fuel that would have been put into dry storage, which would have cost additional dose [sic] and other costs and risks.
(Tr. 429:14-430:12 (Link).)
A: I think I’ve already stated that, and if DOE would have performed under the contract, we would have essentially gone forward without the dry fuel storage and relied on the temporary strategy, if necessary, to retain the ability to get [FCR], Q: And would a temporary strategy, such as a temporary rack, have permitted you to have maintained [FCR]?
A: Yes, it would have.
(Tr. 549:19-550:6 (Link).)
A temporary cask pit rack would have provided these benefits at a fraction of the cost of dry storage without the political contentiousness and uncertainties involved in building a new dry storage structure. It would have cost $2,048,000 including labor, versus the ISFSI and 12 casks with a price tag of $12.8 million in the PSC application and an actual nominal cost of $20,683,000.
Additionally, the use of a temporary rack, the costs associated with a temporary rack would likely be less than what it is for dry storage, which I think we’ve since confirmed. What that means is we would not have to go on to the [PSC] for approval, so we would have avoided all the hearings, all the intervention that took place, that actually took place beginning of 1991 with the first application. It was also generally accepted that using wet storage, being a temporary rack or interim one, it was a lot easier to implement than dry fuel storage, and the ongoing O & M [operations and maintenance] costs with using a temporary rack were also much, much less, so I think there’s clearly a number of reasons why [WE] would have elected to use an alternative if DOE was going to show up in 1998.
(Tr. 2577:23-2578:16; 2658:5-2569:20 (Far-ron) (indicating that if FCR was needed after 1996, WE would probably have installed a temporary rack in the cask laydown area of the pool); Tr. 344:17-347:3 (Link) (“Q: Could a temporary rack hold a full reactor core’s worth of assemblies? [objections omitted] A: I was more than satisfied that a temporary rack could hold at least 121 fuel assemblies.”); Tr. 549:19-550:6 (Link) (predicting that WE would have relied on a temporary rack to preserve FCR).)
Q. If you had thought that DOE was coming in 1998 and you were not going to build dry storage, are there things you could have taken or actions that the company could have taken to preserve or maintain [FCR]?
THE WITNESS: I mentioned earlier the fact that we had looked into the possibility of temporary racks. As we approach 1998 and we didn’t have actual [FCR] in the permanent part of the pool, we certainly could have utilized a temporary rack if the need for [FCR] was required.
(Tr. 1532:12-1534:13 (Krieser).) 45
While recognizing that Mr. Zabransky did not recall discussions concerning a temporary *753 rack, the court credits the testimony of Marlin Conry, the engineer responsible for the steam generator replacement project, that in the breach world he and Mr. Zabransky considered using a temporary rack to provide FCR and found no structural or cooling limitations. (Tr. 2817:5-2819:3; 2833:5-19; 2832:2-17 (Conry).) No “show-stoppers” to NRC approval were identified. (Tr. 2817:5-2819:12 (Conry).) In the breach world, when PSC approved WE’s dry storage, there was no reason to pursue a temporary rack.
A temporary cask pit rack was feasible
The government counters that a temporary rack was not technically feasible, therefore WE would have built dry storage to maintain FCR. WE in turn, presented expert testimony that a temporary rack was feasible and could have provided FCR in the non-breach world.
Expert witness Dr. Krishna Singh, 46 opined that, based on his analysis of structural, criticality and shielding criteria, it was technically feasible for WE to have installed a 121 assembly temporary rack in the cask pit area in the mid-to-late 1990s. 47 “[BJased upon extensive experience with NRC wet storage licensing efforts, it is my opinion that the NRC would have approved WE’s application to amend its operating license to add the 11x11 rack in the cask pit of the [Point Beach] pool.” 48 (PX 827 at 5.) The project posed “no intrinsic challenge” and “there would have been no technical basis to deny the license amendment.” (Id. at 20.) It would not be nearly as challenging as racking projects at other plants during this time. (Id. at 19.) “It could have been done. That’s the bottom line, that ... they could have added a cask pit rack, and it would have been, as I said before, a project, a mundane project, it was not a challenge.” (Tr. 4396:15-20 (Singh); PX 827 at 19.)
Dr. Singh was instructed to assume installation by January of 1996 in time for the steam generator replacement. He testified that the design, engineering, licensing, manufacture and installation would take a total of 30 months. (PX 827 at 4.) His conclusions were based on review of technical data of WE’s pool and his experience with dozens of license amendment applications for other pool racking projects. “The NRC has never rejected an [Operating License] amendment application to equip a pool or cask pit with Holtec-designed racks.” (PX 827 at 20 (emphasis in original).) He estimated the cost for the design, engineering and manufacturing of the rack at $1,837,272, NRC fees of *754 $66,500 (approximately 500 hours of staff time), and internal labor at $144,199, for a total cost of $2,048,000 which WE deducted from its damages as costs that would have been incurred in the non-breach world. (I'd at 4, 5; PX 805 at KRGWE003346.)
Dr. Singh explained that a temporary cask pit rack for Point Beach would have held 121 assemblies, a full core, and would be freestanding which would aid in insertion and removal. The rack could be removed, cleaned with high pressure water, stored on the pool deck and reinserted as needed, which would allow for other uses of the cask pit area.
There are two types of spent fuel storage racks — Region I and Region II. Region I racks are designed to hold SNF with any level of burn-up. Region II racks hold older fuel that has been burned longer or has been out of the reactor longer and is therefore less reactive — less hot. Region II racks are more closely spaced and allow the storage of more spent fuel assemblies in a given space compared to Region I racks. WE would have used a Region II cask pit rack. While fuel in the reactor core might not meet the Region II specifications because it would be too hot, other assemblies could be placed in the temporary rack, which would free spaces for the more reactive fuel coming from the core, which responds to the government’s objection that fuel from the core could not have been placed in the temporary rack.
The government also questions the

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6659852. Public record. Not legal advice.