Consolidated Edison Co. of New York, Inc. v. Entergy Nuclear Indian Point 2, LLC
676 F.3d 1331
| Fed. Cir. | 2012Background
- DOE breached the Standard Contract by failing to begin accepting SNF by January 31, 1998, triggering ENIP’s mitigation and damages claims.
- ENIP acquired Consolidated Edison’s Indian Point units in 2001 and assumed related rights and obligations, including mitigation costs.
- The Claims Court awarded ENIP damages for Unit 1 wet storage costs, NRC generic fees, overhead costs, and denied cost of capital damages.
- The court held ENIP’s Unit 1 wet storage damages improper due to Unit 2 SNF preference for 1998 removals, not accounting for nonbreach world dynamics.
- The court found ENIP failed to prove NRC generic costs increased or that the 1999 fee change was caused by the breach, and it rejected ENIP’s cost-of-capital claim.
- The Feder al Circuit reversed in part, denying Unit 1 wet storage damages, NRC generic fees, and cost-of-capital, while reversing the denial of overhead costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did ENIP prove Unit 1 wet storage damages causally tied to the breach? | ENIP argues breach caused ongoing Unit 1 costs. | Government contends hypothetical world follows Unit 2 SNF removals; no breach-linked costs. | No; damages improperly modeled using Unit 1 as nonbreach fixture. |
| Did ENIP show NRC generic fees increased due to the breach? | ENIP asserts 1999 fee change linked to breach. | No direct evidence that breach caused generic-fee increase. | Reversed; ENIP failed to prove breach caused generic-fee increase. |
| Are ENIP overhead costs recoverable under recent precedents? | Overhead allocated via GAAP/FERC-compliant methods reflect mitigation impact. | Claims Court found method imprecise. | Reversed; overhead costs properly recoverable. |
| Was the cost of capital recoverable under the NWPA no-interest rule? | Seeks financing costs through parent-enterprise funding. | No-interest rule bars such recovery; commercial exception not applicable. | Affirmed denial of cost-of-capital. |
Key Cases Cited
- Pac. Gas & Elec. Co. v. United States, 536 F.3d 1282 (Fed.Cir.2008) (allocation-based damages under NWPA contract)
- Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336 (Fed.Cir.2000) (partial breach and damages framework)
- Northern States Power Co. v. United States, 224 F.3d 1361 (Fed.Cir.2000) (allocation of damages; nonbreach world considerations)
- Energy Northwest v. United States, 641 F.3d 1300 (Fed.Cir.2011) (no-interest rule; no recovery of financing costs)
- System Fuels, Inc. v. United States, 666 F.3d 1306 (Fed.Cir.2012) (GAAP/FERC accounting supports overhead recovery)
- Boston Edison Co. v. United States, 658 F.3d 1361 (Fed.Cir.2011) (recovery of overhead costs; generic-fee implications)
- Energy Northwest, 641 F.3d 1300 (Fed.Cir.2011) (foundational to no-interest rule and mitigation costs)