Southern Nuclear Operating Company, et al. v. United States (US Court of Federal Claims)
Our government contracts litigation team earned a major victory for the Southern Nuclear Operating Company, Georgia Power Company, and Alabama Power Company in the spent nuclear fuel litigation in the US Court of Federal Claims. Following a lengthy trial and post-trial briefing, Senior Judge Merow awarded our clients more than US$79 million in damages in a breach of contract action against the United States.
Southern Nuclear, Georgia Power, and Alabama Power own and operate three nuclear power plants in Georgia and Alabama. Under the Nuclear Waste Policy Act of 1982, they, along with all other nuclear utilities, were required to enter into Standard Contracts with the Department of Energy (DOE) under which the utilities would make payments into a “Nuclear Waste Fund,” in exchange for which DOE would collect and permanently dispose of their spent nuclear fuel starting in January 1998. Although Southern Nuclear, Georgia Power, and Alabama Power have paid more than $825 million in fees, the government has not begun to collect and dispose of the companies’ spent fuel, and due to delays in opening the Yucca Mountain repository or some other federal storage facility, it is uncertain when the government will perform.
Because of the government’s breach, our clients were forced to take various steps, including building complex on-site dry storage systems, to store their spent fuel until the government performs. In 1998, Southern Nuclear, Georgia Power, and Alabama Power filed suit in the Court of Federal Claims to recover their storage costs, alleging partial breach of contract. In a July 9, 2007 86-page decision, Judge Merow awarded the companies essentially all of these costs, totaling some US$79 million. The court held that the companies acted reasonably in mitigating the harm caused by DOE’s breach and rejected various government arguments that sought to limit our clients’ damages. This decision involves one of many so-called “Spent Nuclear Fuel” cases currently pending at the Court of Federal Claims and the United States Court of Appeals for the Federal Circuit.