OPINION
This is one of a number of cases before the court involving contracts for the disposal by the United States of commercially-generated spent nuclear fuel (“SNF”). Pending now is Plaintiffs’ Motion to Dismiss and/or Strike Defendant’s Counterclaims and Defenses Based upon the “One-Time Fee.” Plaintiffs seek to dismiss defendant’s affirmative defenses of 1) failure to satisfy a condition precedent; 2) recoupment or setoff; and 3) offset or reduction. Plaintiffs also seek to dismiss defendant’s First Counterclaim and the Counterclaim for Offset or Recoupment under Rule 12 of the Rules of the United States Court of Federal Claims (“RCFC”). The matter is fully briefed. Oral argument was heard on June 7, 2007. No material facts are in dispute. For the reasons set out below, we grant plaintiffs’ motion.
BACKGROUND
At issue here is the Millstone Power Station (“Millstone”), a three-unit nuclear power generating facility located near New London, Connecticut. In 1983, Northeast Utilities Service Company, plaintiffs’ predecessor, executed three Standard Contracts for Disposal of Spent Nuclear Fuel and/or High Level Waste (“Standard Contract”), for each Millstone Unit under the Nuclear Waste Policy Act (“NWPA”), codified as amended at 42 U.S.C. §§ 10101-10270 (2000). The material terms of the Standard Contracts are set out in 10 C.F.R. § 961.11. The contracts were assigned to plaintiffs by sale of the units in 2001. Plaintiff Dominion Nuclear Connecticut, Inc. is a wholly-owned indirect subsidiary of plaintiff Dominion Resources, Inc., and is the current holder of the Standard Contracts for the Millstone Units. Millstone Unit One, which began commercial operation in 1970, was permanently shut down in 1995. Millstone Units Two and Three began commercial operation in 1975 and 1986, respectively, and are currently in operation.
Congress enacted the NWPA in 1982, reaffirming federal responsibility “to provide for the permanent disposal of high-level radioactive waste ... in order to protect the public health and safety.” 42 U.S.C. § 10131(a)(4); see Indiana Michigan Power Co. v. U.S.,
The Standard Contract sets out how the utilities are to pay for the disposal of SNF. For electricity generated and sold after April 7, 1983, utilities are charged a fee in the amount of 1.0 mill per kilowatt hour. Standard Contract, art. VIII.A.1. For the disposal of SNF used to generate electricity prior to April 7, 1983, the Standard Contract provides that DOE is to charge the utilities a “one-time fee” within two years of contract execution. Id. art. VIII.A.2. The Standard Contract further provides for a method for calculating the amount of the one-time fee as specified in paragraph B of article VIII. Pur
(a) Option 1—The Purchaser’s financial obligation for said fuel shall be prorated evenly over forty (40) quarters and will consist of the fee plus interest on the outstanding fee balance----
(b) Option 2—The Purchaser’s financial obligation shall be paid in the form of a single payment anytime prior to the first delivery, as reflected in the DOE approved delivery commitment schedule, and shall consist of the fee plus interest on the outstanding fee balance —
(c) Option 3—The Purchaser’s financial obligation shall be paid prior to June 30,1985, or prior to two (2) years after contract execution, whichever comes later, in the form of a single payment and shall consist of all outstanding fees for SNF and in-core fuel burned prior to April 7,1983. Under this option, no interest shall be due to DOE from April 7, 1983, to the date of full payment on the outstanding fee balance.
Id. art. VIII.B .2.
Millstone Unit Three is not subject to the one-time fee as it did not generate any electricity prior to April 17,1983. For Millstone Units One and Two, plaintiffs’ predecessor selected Option 2, or, the deferred payment option, which makes payment due anytime “prior to the first delivery, as reflected in the DOE approved delivery commitment schedule.” Id. art. VIII.B.2.b. Interest on the deferred payment began to accrue as of April 17, 1983, and accumulates until the date of payment, compounded quarterly by the 13-week Treasury bill rate. Id. The combined one-time fees for these two units were originally calculated to be approximately $82.1 million, and had grown to approximately $277.3 million as of September 30, 2006. These fees have not been paid to date.
Under a procedure established in the Standard Contract, DOE was to issue an annual capacity report (“ACR”) reflecting the projected annual receiving capacity for DOE facilities and the annual acceptance priority ranking (“APR”) for the disposal of waste, beginning, at the latest, July 1, 1987. Standard Contract, art. TV.B.5(b). Based on the ACRs, utilities could begin to submit delivery commitment schedules (“DCSs”) to DOE starting January 1, 1992, identifying the amount of waste they wished to deliver to DOE “beginning sixty-three (63) months thereafter.” Id. art. V.B.l. DOE could approve or disapprove the DCSs within three months of receipt. Id. Final delivery schedules had to be submitted “not less than twelve (12) months prior to the delivery date specified therein.” Id. art. V.C.
In 1993, plaintiffs’ predecessor submitted a DCS for Millstone Unit One for purported first delivery in 1998. DOE approved the DCS on March 10, 1993. The approved DCS, however, only noted the year, and not a specific date, as the “Proposed Delivery Date.” Def.’s Opp’n App. A2. In the approved DCS, a date was not entered in the line for “DOE Assigned Delivery Commitment Date,” but instead, the line remained as “(Not Required) (Assigned by DOE).” Id.
On May 25, 1994, DOE published a Notice of Inquiry stating its preliminary view that it had no statutory obligation to accept SNF by the 1998 deadline in the absence of an operational repository constructed under the Act. On May 3,1995, DOE issued its “Final Interpretation” that “it does not have a legal obligation under ... the Act ... to begin disposal of SNF by January 31, 1998, in the absence of a repository or interim storage facility constructed under the [NWPA].” Final Interpretation of Nuclear Waste Acceptance Issues, 60 Fed.Reg. 21,794 (May 3, 1995).
Several utilities filed petitions for review of the Final Interpretation in the United States Court of Appeals for the District of Columbia. That court ruled that DOE had an unconditional obligation to begin accepting SNF by January 31, 1998 under the NWPA. See Indiana Michigan Power Co. v. Dep’t. of Energy,
Previously, on September 30, 1996, plaintiffs’ predecessor had submitted DCSs for Millstone Units One and Two, setting the delivery date as 2002, based on the 1995 APR and ACR. In March 13, 1997, DOE sent a letter to plaintiffs’ predecessor notifying it that DOE “is not able at this time to approve [its] DCS submittal.” Letter from Beth A. Tomasoni, Contracting Officer, DOE, to Lee 0. Hill, Supervisor, Northeast Utilities Serv. Co. (Mar. 13, 1997). Defendant has since suspended the DCS process.
On August 31, 2000, the Federal Circuit issued companion decisions in Maine Yankee and Northern States Power Co. v. United States,
Plaintiffs initiated this action on January 23, 2004. The case was stayed shortly thereafter. The stay was lifted on August 2, 2006, and the government filed its answer to the complaint on January 10, 2007. In its answer, defendant raises three types of defenses and counterclaims related to the one-time fee. First, defendant claims that payment of the one-time fee is a condition precedent to defendant’s liability, thus the failure to pay is an absolute bar to any damages or claims. Second, in its “First Counterclaim” and affirmative defense, defendant asserts that it is entitled to judgment for immediate payment of the one-time fee with interest because plaintiffs are seeking damages for partial breach of contract. Third, as its counterclaim and affirmative defense, defendant asserts, in the alternative, that it is entitled to setoff or recoupment of the one-time fee against any future judgment awarded in plaintiffs’ favor. On January 29, 2007, plaintiffs filed their motion to dismiss and/or strike these counterclaims and defenses pursuant to the RCFC 12(b)(6), 12(c) and 12(f).
DISCUSSION
All of the affirmative defenses and counterclaims plaintiffs seek to dismiss are based on the same predicate—namely, that the one-time fee is now due and owing. For reasons set out below, that underlying assumption fails.
The Standard Contract provides that the fee “shall be paid ... anytime prior to the first delivery, as reflected in the DOE approved delivery commitment schedule____” Standard Contract, art. VIII.B.2(b). In other words, prior to any payment of the one-time fee, a date for delivery must be set through an approved DCS. This court has already noted in other decisions that there is currently no valid DOE-approved commitment schedule in place. See, e.g., System Fuels Inc. v. United States,
Plaintiffs, however, are not suing for a total breach. If they were, we would simultaneously account for all of the parties’ outstanding obligations. If plaintiffs were arguing total breach, or, if defendant was arguing that plaintiffs would not have been ready, willing and able to perform prior to 1998, then the one-time fee would be relevant. But those are not the facts. Instead, in this partial breach suit, the obligations each party owes to the other remain intact, in that defendant still must accept the delivery of SNF at some point in the future and plaintiffs must also pay the one-time fee, some time prior to the time of delivery.
It became apparent, prior to the 1998 delivery date specified in the DCS approved in 1993, that the government would not perform according to that schedule. The DCSs submitted by plaintiffs in connection with Millstone Units One and Two in 1996 setting the delivery date as 2002 were not approved. The 1998 delivery date, as reflected on the once-approved DCS for Millstone Unit One, passed without the delivery occurring. When DOE resumes its DCS process, plaintiffs will need to submit a new DCS for all three units, setting proposed delivery dates. The one-time fee will then become due prior to those future dates. But that time has not yet come.
Option 2 for payment of the one-time fee differs from the other two options in that it allows utilities to defer making a single lump sum payment to a later date, “anytime prior to the first delivery, as reflected in the DOE approved delivery commitment schedule.” Standard Contract, art. VIII.B.2. The purpose behind choosing Option 2, then, is to defer the payment “until the point when delivery of SNF was imminent.” Vermont Yankee,
There exists no valid approved DCS setting out a delivery date. As this court stated in Consumers Energy, “the setting of the delivery date was itself a condition of [plaintiffs’] payment obligation.”
An alternative way to view the effect of defendant’s conduct is that defendant’s suspension of the DCS process temporarily excuses plaintiffs’ duty to pay until defendant resumes the process and the date of first delivery is specified in a valid, DOE-approved DCS. In Vermont Yankee and System Fuels, the court agreed that the utilities’ purpose for selecting the deferral option for payment of the one-time fee was frustrated by defendant’s suspension of the DCS process, temporarily excusing the duty to pay the fee. In System Fuels, .the court stated that:
*156 the government’s delay in disposing of SNF and HLW has temporarily frustrated the purpose behind [the plaintiffs’] selection of the deferral option. As a result, the condition has been temporarily excused pending the beginning of the disposal process, and [plaintiffs] may proceed with [their] claim of partial breach of contract notwithstanding [their] deferral of the onetime fee.
We agree with these decisions that defendant’s suspension of the DCS process frustrated plaintiffs’ purpose in selecting Option 2. However one characterizes the effect of defendant’s conduct on plaintiffs’ duties, the result is the same: the one-time fee is not due. Plaintiffs’ failure to pay the fee, therefore, does not bar their claims for interim costs due to partial breach.
This same analysis dooms the government’s alternative effort to recoup the unpaid one-time fee and interest from any partial breach damages awarded to plaintiffs. Defendant supports its argument by citing the principle that a “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,
Allowing defendant to recoup or setoff the fee is predicated on the assumption that the one-time fee is now overdue. See Vermont Yankee,
Recoupment or setoff would, in any event, contravene the terms of the NWPA which provides that the Nuclear Waste Fund (“NWF”) shall consist of:
(1) all receipts, proceeds, and recoveries realized by the Secretary under subsections (a), (b), and (e) of this section, which shall be deposited in the Waste Fund immediately upon their realization;
(2) any appropriations made by the Congress to the Waste Fund; and
(3) any unexpended balances available on January 7,1983, for functions or activities necessary or incident to the disposal of civilian high-level radioactive waste or civilian spent nuclear fuel, which shall automatically be transferred to the Waste Fund on such date.
42 U.S.C. § 10222(c). In Alabama Power Co. v. U.S. Dep’t. of Energy,
Defendant responds that Alabama Power does not apply because the offset is not an expenditure and the NWF will not be deprived of any payment. This is accom
Defendant’s last argument is that damages should be offset by any benefit accrued to plaintiffs through deferral of the one-time fee payment. Defendant argues that, by withholding the one-time fee, plaintiffs have been reaping a benefit because they could have invested the money to get a higher return than the interest accumulating to the government’s account under the NWPA. In making its argument, defendant equates the situation to plaintiffs making a windfall through a substitute transaction, citing LaSalle Talman Bank v. United States,
As plaintiffs correctly state, however, there exists no “substitute transaction” from which plaintiffs are reaping a benefit involving the one-time fee. Def.’s Opp’n at 26. The onetime fee is simply not yet due under the Standard Contract, and the parties have contracted for how much interest accrues in the interim. Until the one-time fee becomes due, the government does not have a claim for early payment.
CONCLUSION
For the reasons set forth herein, we grant plaintiffs’ motion and dismiss defendant’s affirmative defenses and counterclaims based on the one-time fee.
Notes
. As noted in other decisions in this court, it is undisputed that DOE suspended the DCS process prior to January 31, 1998, the contractually specified date for DOE to begin acceptance and disposal of SNF. See Vermont Yankee Nuclear Power Corp. v. United States,