Friday, June 9, 2023 | Back issues
Courthouse News Service Courthouse News Service

US Owes Entergy $13M More for Breach on Fuel

WASHINGTON (CN) — A federal judge handed Entergy a 67 percent boost to its $20 million judgment against the Department of Energy for not accepting spent nuclear fuel from a Michigan plant.

The department is supposed to remove nuclear waste for a fee and store it in Yucca Mountain, Nev., as part of the Nuclear Waste Policy Act of 1982.

Despite a 1998 contract to do so, however, the agency has not accepted any fuel waste from the Palisades nuclear power plant in Covert, Michigan.

Entergy and Consumers Power Co., the company that sold Palisades to Entergy in 2007, meanwhile have the Department of Energy $279 million in fees over the life of the contract.

The agency settled with Consumers after a federal judge found it liable for breach of contract, but Entergy filed its own suit to recover the costs it has spent related to the breach.

After the government conceded it owed $20.6 million of the $36.1 million Entergy sought in the suit, the U.S. Court of Federal Claims entered partial judgment in that amount.

This award did not conclude proceedings, however, and the court held a seven-day trial in December 2015.

A decision unsealed this month by Senior Judge Nancy Firestone shows that Entergy is entitled to another $13.8 million.

The award includes the $3.5 million that the agency had offered to tack on.

Entergy brought up three areas where it claimed to have incurred additional costs because of the government.

By far the largest portion of Entergy's claim came from money it spent replacing racks in the pool used to safely store spent nuclear waste.

Used to hold fuel rods, the racks deteriorated over time, and Entergy spent $9.6 million replacing them.

Entergy's witnesses testified at trial that the old racks would not have needed replacing if the government had picked up the fuel as it agreed to in the contract.

Firestone rejected the government's claims that the racks were defective and needed to be replaced even if the government had removed the fuel.

"The court finds that Entergy would not have undertaken the re-rack project had the government not breached the contract," the ruling dated Sept. 20 but unsealed on Oct. 6 states.

Entergy also sought to recover $4.4 million it spent on long-term fuel storage. The government conceded $3.5 million of this cost, but still objected to more than $900,000 Entergy wanted in labor and equipment costs.

Entergy said the government should be responsible for $387,000 in "contractor standby costs," as well as an additional $558,000 for equipment it leased during a delay in the loading project.

On this point, Firestone sided with the government, citing witness testimony that the delays were actually Entergy's own fault.

"The court therefore finds that the costs attributable to the loading delays either were not adequately explained, could have been avoided by reasonable efforts and thus are not recoverable," Firestone wrote.

Finally, Firestone awarded Entergy more than $629,000 for staffing a security post that watched over an installation where the company stored its spent nuclear fuel. The government already agreed to pay for one security post at the installation, but disputed the cost of the second, saying Entergy did not prove the post was always staffed.

Firestone credited testimony from Entergy's security manager, who said that Entergy staffed both posts at the independent spent fuel-storage instillation, or ISFSI, year-round.

"In this case, the court has found that the evidence establishes that Entergy used its resources to staff two security posts at the new ISFSI all day every day and that Entergy would not have needed to secure the ISFSI but for the government's breach," Firestone wrote.

The ruling notes that the Department of Energy "has no immediate plans to" begin collecting fuel waste from Entergy Nuclear Palisades plant.


Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.