Nebraska Public Power District v. MidAmerican Energy Co.

No. 99-4067 (234 F.3d 1032) (8th Cir. December 12, 2000)

ELR Digest

The court holds that a power sale contract between an energy company and a public power district does not require the energy company to make current, nonrefundable payments of estimated decommissioning costs to the power district, but makes the energy company liable for decommissioning costs only in the event that the district shuts the nuclear power plant down in 2004. In 1967, the parties entered a power sales contract that obligated the power district to construct and manage the power facility and required the company to purchase power from the facility and pay monthly power costs until 2004. The contract also stated that if the power district elects to shut the facility down in 2004, the parties must share decommissioning costs equally. If the power district continues operation, however, the energy company's payment obligations and its right to any refund of excess payments are terminated. In anticipation of high decommissioning costs, the power district began adding estimated decommissioning costs to the energy company's bill in 1984. The power district argued, and the district court agreed, that the decommissioning costs fall within the contract's definition of monthly power costs, obligating the energy company to pay them, and that the contract cuts off the company's right to any reimbursement should the power district elect to close the plant in 2004.

The court first holds that the case is ripe for adjudication. All facts necessary to the resolution of the case have already been established, and judicial resolution of this matter will largely settle the parties' dispute. The court next holds that the contract unambiguously makes the energy company liable for decommissioning costs only if the power district ceases operation in 2004, and it does not require the energy company to pay current, nonrefundable payments of estimated decommissioning costs. In reaching its conclusion to the contrary, the district court misconstrued the plain language of the contract and credited inappropriate evidence. Prepaid decommissioning costs are not monthly power costs. In fact, such payments fall wholly outside the contract. The court next holds that the contract does not bar the company's equitable claims to recover payments already made. The company did not subject itselfto liability for decommissioning costs by making prepayments. Rather, the company's payment obligations are contingent on the power district's decision regarding continued operations.

The full text of this decision is available from ELR (21 pp., ELR Order No. L-310).

[Counsel not available at this printing.]

[31 ELR 20309]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]