Alabama Power Company v. United States
119 Fed. Cl. 615
| Fed. Cl. | 2014Background
- This is the second-phase damages trial by Alabama Power, Georgia Power, and Southern Nuclear (collectively "plaintiffs") against the United States for DOE’s partial breach of Standard Contracts to accept spent nuclear fuel (SNF). Liability was established in earlier proceedings.
- Plaintiffs sought ~$77.4 million for costs incurred Jan 1, 2005–Dec 31, 2010 (dry storage construction/operation, casks, equipment, plant modifications, loading & characterization, and NRC fees). Parties stipulated $59,431,458 as uncontested costs tied to dry storage at Farley, Hatch, and Vogtle.
- Core contract terms: plaintiffs must provide preparation, packaging, inspections and loading; DOE must provide casks suitable for use at purchaser’s site and accompanying technical information, tools, training, and certain equipment.
- Trial issues focused on causation for stipulated costs, recoverability of fuel characterization/loading costs (which plaintiffs also must perform under the contract), recoverability of site equipment/plant modifications (some alleged to be DOE responsibility), and whether DOE’s breach caused NRC’s 1999 fee reallocation.
- The court applied traditional contract-damages principles (foreseeability, substantial causation, reasonable certainty) and the substantial-factor causation standard used in earlier SNF cases; plaintiffs bear the burden to compare breach vs. non-breach worlds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Causation for stipulated (uncontested) dry-storage costs | Stipulated $59.4M were incurred for dry storage caused by DOE breach; non-breach world costs for those facilities would be zero | Government says plaintiffs failed to present a non-breach model and may have incurred some costs even if DOE performed | Court awarded the stipulated $59,431,458 — dry storage facilities were only necessary because of DOE breach, so non-breach costs reasonably inferred to be zero |
| Recovery for fuel characterization and cask-loading costs | Plaintiffs: these costs were incurred and will have to be re-incurred when DOE ultimately performs, so recoverable now | Government: plaintiffs would have incurred characterization/loading in non-breach world (or offered no proof the Holtec costs differ from DOE casks); plaintiffs failed to show difference from non-breach world | Denied — plaintiffs did not prove these costs would differ from non-breach world and thus failed causation requirement |
| Recovery for equipment and plant modifications (Hatch, Vogtle, Farley) | Plaintiffs: many items (power supplies, HVAC, ISFSI study, sally port, pit covers, loading procedures) were caused by DOE’s breach or would have been provided by DOE | Government: many modifications would have been needed in non-breach world or are plant betterments/optional; some costs are speculative | Split: awarded specified items (Hatch power/HVAC; Vogtle ISFSI study & sally port; Farley pit covers & loading procedure development) but denied others (Vogtle crane mods; several Farley items where either necessary in non-breach world or not proven with reasonable certainty) |
| Recovery for NRC fees (1999 generic fee allocation change) | Plaintiffs: NRC’s 1999 rule reallocating generic SFS/RD fees to include all licensees was caused by DOE’s breach and thus plaintiffs incurred increased fees they should recover | Government: Consolidated Edison shows evidence is insufficient to tie the 1999 rule change to DOE breach; plaintiffs’ new evidence is not persuasive | Denied — court found plaintiffs’ additional evidence insufficient to establish that DOE’s breach was a substantial causal factor in NRC's 1999 fee change |
Key Cases Cited
- Indiana Michigan Power Co. v. United States, 422 F.3d 1369 (Fed. Cir. 2005) (sets foreseeability, causation, and reasonable-certainty standards for contract damages in SNF cases)
- Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008) (discusses compare‑breach‑and‑non‑breach-world proof and mitigation; approved substantial-factor test)
- Energy Northwest v. United States, 641 F.3d 1300 (Fed. Cir. 2011) (plaintiff must first prove damages caused by breach before government can assert offsets; distinguishes Carolina Power)
- Carolina Power & Light Co. v. United States, 573 F.3d 1271 (Fed. Cir. 2009) (addresses breaching party offsets where breach permitted avoidance of future costs)
- Consolidated Edison Co. of N.Y. v. Entergy Nuclear Indian Point 2, LLC, 676 F.3d 1331 (Fed. Cir. 2012) (denied recovery for NRC fee reallocation where evidence did not show rule change was caused by DOE breach)
- Bluebonnet Sav. Bank v. United States, 266 F.3d 1348 (Fed. Cir. 2001) (damages need not be exact but must permit a fair and reasonable approximation)