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Energy Northwest v. United States

Citation: 40 ELR 20067
No. No. 04-10C, (Fed. Cl., 02/26/2010)

The Court of Federal Claims held that nuclear utilities were entitled to almost $57 million in mitigation expenses related to DOE’s failure to accept nuclear waste by the date set forth in the contract between the utilities and DOE. In their suit, the utilities sought, among other things, costs related to the construction of a dry storage facility. Based on the facts of the case, the court held that the utilities’ construction of the facility was foreseeable, reasonable, and would not have been carried out “but for” DOE’s failure to accept the nuclear waste by the deadline set forth in the contract. In addition, DOE failed to prove that the utilities would not incur certain proposed offsets, such as plant and site modifications, once DOE performs under the contract and, as such, it is improperly speculative to conclude that the utilities have avoided these costs. As to overhead costs, there is no requirement that the utilities prove that their internal resources costs had increased as a consequence of DOE’s breach. That such internal resources were spent in mitigation activities because of the breach is sufficient for recovery. As to the costs incurred in financing the dry storage facility, interest claims on borrowings directly traceable to DOE’s breach, incurred not simply as a result of a delay in payments due from DOE or to “carry on” its end of the contract, are outside the reach of the no-interest rule, as embodied in 28 U.S.C. §2516(a). Within these parameters, interest as an independent claim is recoverable and is distinct from the interest on a claim. The utilities are therefore entitled to recover as an independent claim the costs of financing the dry storage facility.