Entergy wins ruling on partial damage award for uncollected nuclear waste

The U.S. Court of Federal Claims on July 17 rejected a motion by the federal government for a re-look at an earlier decision over nuclear waste fees in a case involving Entergy Nuclear Palisades.

“The government has filed the present motion for reconsideration, asking this court to revisit its decision to enter partial judgment under Rule 54(b) of the Rules of the United States Court of Federal Claims (‘RCFC’) in favor of the plaintiff, Entergy Nuclear Palisades (‘ENP’), for the undisputed portion of damages in this spent nuclear fuel case,” said the ruling. “According to defendant the United States (‘the government’), plaintiff’s claim was not separable for purposes of entering a partial judgment. For the reasons that follow, defendant’s motion for reconsideration is DENIED.”

This case concerns the storage and disposal of nuclear waste at the Palisades Nuclear Plant in Michigan, which is owned and operated by the plaintiff. The plaintiff alleges that, under both a contract between it and the government and under the Nuclear Waste Policy Act of 1982, the government was required to commence acceptance and disposal of spent nuclear fuel (SNF) and high-level radioactive waste from Palisades beginning on Jan. 31, 1998. The plaintiff alleges, and the government does not dispute, that the government has not accepted or disposed of SNF or radioactive waste from Palisades.

In September 2012, Entergy Nuclear Palisades filed its complaint alleging breach of contract. The parties subsequently conducted discovery and exchanged expert reports. With respect to the Palisades site, ENP’s expert calculated that ENP suffered damages in the amount of $36,408,999 as a result of the government’s breach. The government did not contest liability, but its expert calculated that ENP had only incurred $20,634,196 as a result of the government’s breach.

The defendant agreed that it owed ENP that amount, leaving approximately $15.7 million of the costs associated with Palisades still in dispute. Consequently, on Feb. 27, 2015, ENP filed a motion for partial summary judgment with respect to the approximately $20.6 million that the government acknowledged it owed to ENP in damages relating to Palisades.

On May 4, 2015, the court granted ENP’s motion for summary judgment with respect to the claim for the undisputed portion of damages associated with the Palisades site. The court asked the parties to provide the court with a proposed judgment for the uncontroverted amount.

On May 14, 2015, plaintiffs filed a proposed final judgment on the undisputed portion of the damages, and the government made no objection. On May 18, 2015, the court directed the clerk of court to enter judgment in the amount of $20,634,196. On May 20, 2015, the clerk entered that judgment.

On June 8, 2015, the parties filed a joint status report in which the government stated that it would file a motion for reconsideration. On June 17, 2015, the government filed its motion for reconsideration and to vacate the judgment against it.

The government argues that reconsideration is required because the partial judgment awarded to the plaintiff is not a separate “claim” under court rules. The government characterizes the plaintiff’s entire complaint as one single “claim” for breach of contract, and therefore, the court cannot grant partial judgment until that “claim” is fully litigated.

“However, the court finds that the government’s definition of ‘claim’ is overly restrictive, elevating form over substance, and does not comport with case law addressing similar situations,” said the July 17 ruling. “Other courts in this circuit have found that RFCF 54(b)’s requirement of a final claim does not prevent the entry of partial judgment in cases where a portion of the damages has been definitively established and further litigation will not impact the government’s obligation to pay at least that amount. In those cases, as in this one, the court treated the uncontested portion of the damages as a resolved ‘claim’ for the purposes of Rule 54(b), and the unresolved portion as the remaining ‘claim,’ even when both portions of damages arose from the same original cause of action.”

Palisades Nuclear Power Plant, located in Covert, Michigan, is owned by Entergy Corp. (NYSE: ETR). It is a one-unit, pressurized water reactor capable of producing 798 MW (maximum dependable). Palisades began commercial operation in December 1971 and has a license to operate through 2031.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.