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Northern States Power Co. v. United States

ELR Citation: 37 ELR 20259
Nos. No. 98-484C, (Fed. Cl., 09/26/2007)

The Federal Claims Court held that an electric utility is entitled to $116.485 million in mitigation damages for the U.S. Department of Energy's (DOE's) partial breach of a contract concerning the disposal of spent nuclear fuel. The utility operates three nuclear reactors. DOE entered into a contract with the utility that required it to accept, transfer, and permanently store spent nuclear fuel and other hazardous waste produced by the utility's generation of electricity. When it became apparent that DOE would not be able to accept the waste in a timely manner, the utility sought alternative methods to dispose of the waste. In total, it expended $172.154 million to satisfy its spent fuel storage needs. The court ruled that the costs the utility incurred in developing on-site and off-site dry storage facilities for the spent nuclear fuel qualified as recoverable mitigation damages. However, the utility may not recover the cost of capital it expended in connection with its mitigation-related activities. Cost of capital damages are conceptually indistinguishable from prejudgment interest, which is not recoverable against the United States under 28 U.S.C. §2516 absent a statute or contract provision specifically recognizing the right to maintain such an action.

[Decisions related to this litigation are published at 28 ELR 20231, 31 ELR 20066, and 31 ELR 20069.]