Court Opinion

ID: 3066452
Source: CourtListenerOpinion
Date Created: 2015-10-15 00:46:34.180157+00
Date Added: 2024-06-11T11:49:49.389372
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
              __________________________

           BOSTON EDISON COMPANY,
                Plaintiff-Appellee,

                         and
 ENTERGY NUCLEAR GENERATION COMPANY,
          Plaintiff-Cross Appellant,

                          v.
                 UNITED STATES,
                 Defendant-Appellant.
              __________________________

                   2010-5136,-5137
              __________________________

    Appeals from the United States Court of Federal
Claims in consolidated Case Nos. 99-CV-447 and 03-CV-
2626, Judge Charles F. Lettow.
              __________________________

             Decided: September 28, 2011
             ___________________________

    RICHARD J. CONWAY, Dickstein Shapiro, LLP, of
Washington, DC, argued for the plaintiff-appellee. With
him on the brief were BRADLEY D. WINE, NICHOLAS W.
MATTIA, JR. and PABLO A. NICHOLS. Of counsel was ERIN
L. WEBB.
BOSTON EDISON COMPANY    v. US                            2

     MICHAEL B. WALLACE, Wise, Carter, Child & Cara-
way, P.A., of Jackson, Mississippi, argued for the plain-
tiff-cross appellant. With him on the brief was LAYTON
JAGER SMITH, JR.

    ALAN J. LO RE, Assistant Director, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for the defendant-
appellant. With him on the brief were TONY WEST, Assis-
tant Attorney General, and JEANNE E. DAVIDSON, Direc-
tor. Of counsel on the brief were HAROLD D. LESTER, JR.,
Assistant Director, PATRICK B. BRYAN, JOSEPH D. KELLER,
MICHELLE R. MILBERG and SHARI A. ROSE, Trial Attor-
neys; and JANE K. TAYLOR, Office of General Counsel,
United States Department of Energy, of Washington, DC.
               __________________________

  Before BRYSON, LINN, and O’MALLEY, Circuit Judges.
BRYSON, Circuit Judge.

     This is another in a series of cases dealing with the
consequences of the federal government’s ongoing breach
of its contractual obligation to collect and dispose of the
nation’s nuclear waste. Our recent precedent dictates the
outcome of two of the issues raised in this litigation—the
right of a non-breaching party contracting with the gov-
ernment to recover indirect overhead costs associated
with mitigation activities, and the right of such a party to
recover the costs of financing those activities. We affirm
the trial court’s judgment on both of those issues. There
is one novel question presented by this case: whether the
sale of a nuclear plant and the transfer of a decommis-
sioning fund affects the rights of the buyer and seller to
recover future damages for the government’s partial
breach of contract. As to that issue, we reverse the trial
court and hold that a sale of assets by a non-breaching
3                                BOSTON EDISON COMPANY   v. US

party does not alter the settled common law principle that
when the breaching party has not repudiated the contract
and is still expected to perform, damages are not recover-
able until they are incurred as a result of the breach. In
addition, we address issues involving the award of dam-
ages in connection with fees paid to the United States
Nuclear Regulatory Commission (“NRC”), and we remand
for further proceedings on that issue.

                             I

    This litigation concerns the Pilgrim Nuclear Power
Station in Plymouth, Massachusetts. In 1983, appellee
Boston Edison Company, which owned the Pilgrim plant
at the time, entered into a contract (“the Standard Con-
tract”) with the United States Department of Energy
(“DOE”) under which DOE agreed to begin collecting
spent nuclear fuel (“SNF”) from the Pilgrim plant no later
than January 1998. Boston Edison fulfilled its obligation
under the Standard Contract to pay fees to the govern-
ment. The government, on the other hand, has never
begun collecting the SNF produced by the Pilgrim plant
and thus has been in breach of the contract from January
1998 to the present. The government has breached simi-
lar contractual undertakings nationwide, leading to
numerous breach of contract actions. The facts surround-
ing DOE’s ongoing breach of the Standard Contract have
been related before, and we will not repeat them here.
See, e.g., Neb. Pub. Power Dist. v. United States, 590 F.3d
1357, 1360-63 (Fed. Cir. 2010) (en banc); See Me. Yankee
Atomic Power Co. v. United States, 225 F.3d 1336, 1337-
39, 1343 (Fed. Cir. 2000).

    In 1997, Massachusetts enacted legislation to restruc-
ture the electric utility industry in that state. The legis-
lation required regulated utilities such as Boston Edison
BOSTON EDISON COMPANY    v. US                             4

either to sell their electricity generation assets and opera-
tions or to functionally separate their generation opera-
tions from their transmission and distribution operations.
See Mass. Gen. Laws ch. 164, § 1A (1997). Boston Edison
subsequently entered into a settlement agreement with
the Massachusetts Attorney General that established a
procedure for the company to sell Pilgrim and other power
generation assets it held in the state. Under the agree-
ment, Boston Edison had the option to transfer Pilgrim
and its operations to an unregulated subsidiary. Boston
Edison could also choose to assign responsibility for
decommissioning Pilgrim and storing SNF to another
party. The agreement allowed Boston Edison to value
Pilgrim and the decommissioning and storage responsi-
bilities using a competitive auction.

     Boston Edison solicited several potential bidders, in-
cluding Entergy Nuclear Generation Company. In addi-
tion to Pilgrim’s physical facilities, Boston Edison offered
to transfer a “fully-funded decommissioning fund” to cover
the costs of decommissioning Pilgrim and the costs of
post-decommissioning storage “until such time as the
Department of Energy takes title to the fuel.” 1 In other
words, Boston Edison offered to make an advance pay-
ment to a prospective purchaser to cover the cost of DOE’s
anticipated future delays in performance of the Standard
Contract. Four parties submitted bids, and following
negotiations Boston Edison accepted Entergy’s bid.
Entergy agreed to purchase the Pilgrim plant, inventory,
fuel, and land for $80 million and to accept decommission-
ing and storage responsibilities in return for a decommis-

    1  Pilgrim’s initial operating license is due to expire
in 2012. Entergy has initiated relicensing proceedings
with the NRC that would extend Pilgrim’s license through
2032.
5                              BOSTON EDISON COMPANY    v. US

sioning fund of $428 million. 2 In setting the price for the
decommissioning fund, Entergy considered the risk
inherent in DOE’s continued delay in performance under
the Standard Contract. Because of that risk, Entergy
agreed to purchase Pilgrim for a price at which Entergy’s
expected rate of return greatly exceeded its cost of capital.

     The Massachusetts Attorney General insisted that
Boston Edison retain all claims against the government
arising from DOE’s expected breach of the Standard
Contract, 3 and that any damages awarded be returned to
Boston Edison’s ratepayers as compensation for SNF-
related fees they had paid to the company over a period of
several years. Boston Edison negotiated a clause in the
final purchase agreement giving it rights to any claims
“related or pertaining to the Department of Energy’s
defaults under the DOE Standard Contract accrued as of
the Closing Date, whether relating to periods prior to or
following the Closing Date.” Entergy received rights to all
other claims arising from the Standard Contract. Massa-
chusetts regulators approved the sale of Pilgrim and the
transfer of the decommissioning fund after concluding
that Boston Edison would “retain[ ] its claim against US-
DOE” under that clause.

    2   The initial decommissioning and storage payment
was $471 million, but a portion of the payment was ulti-
mately returned to Boston Edison after the Internal
Revenue Service determined that the transfer of the
decommissioning fund was entitled to favorable tax
treatment.
    3   DOE had announced in 1994 that it would not be-
gin SNF collection before 2010 because the planned
national SNF storage repository would not be ready until
that time. Notice of Inquiry, Office of Civilian Radioac-
tive Waste Management: Waste Acceptance Issues, 59
Fed. Reg. 27,007 (May 25, 1994). Subsequent events have
further delayed DOE’s performance.
BOSTON EDISON COMPANY   v. US                           6

    The sale closed in July 1999. One day before the clos-
ing, Boston Edison brought suit against the United States
in the Court of Federal Claims seeking damages for
partial breach of the Standard Contract. In 2003, before
the court decided that claim, Entergy filed suit against
the United States seeking damages for partial breach of
the contract beginning as of the date of the sale. In the
Entergy action, the government counterclaimed, contend-
ing that any damages awarded to Entergy should be offset
by whatever amount was awarded to Boston Edison.
After consolidating the two actions, the court in 2008
awarded Boston Edison $40 million in damages. That
amount represented the portion of the decommissioning
fund corresponding to the projected post-decommissioning
SNF-related costs that would be attributable to DOE’s
breach of the Standard Contract. The court found that it
was reasonably foreseeable to the government that Boston
Edison would transfer the decommissioning fund to a
third party, and that any such transfer would need to
account for the risk that DOE would continue to delay
performance after Pilgrim was decommissioned. The
court therefore determined that DOE had directly caused
Boston Edison to pay a larger sum in order to relieve
itself of its decommissioning responsibilities. The court
denied Boston Edison’s claim for damages related to the
alleged reduction in the purchase price of Pilgrim due to
the government’s breach. The court deferred ruling on
the government’s cross-claim for an offset of Entergy’s
damages.

    In 2010, the court addressed the cross-claims in the
Entergy action. By then, Entergy had amended its com-
plaint to request partial breach damages incurred
through 2008. The court awarded Entergy $4 million in
mitigation damages arising from the government’s partial
breach of contract. That award included direct and
7                             BOSTON EDISON COMPANY    v. US

overhead costs associated with new spent fuel racks that
Entergy had installed and fees that Entergy had paid to
the NRC. The court denied Entergy’s claim for the financ-
ing costs associated with mitigation activities. The court
also rejected the government’s cross-claim for an offset of
Entergy’s damages against those already awarded to
Boston Edison, noting that such an offset would be avail-
able only against damages sought by Entergy relating to
the period after the Pilgrim plant was decommissioned.
The government appeals both decisions.

                             II

     The government’s ongoing breach of the Standard
Contract gives rise to damages for partial breach, not
total breach. Ind. Mich. Power Co. v. United States, 422
F.3d 1369, 1374 (Fed. Cir. 2005), citing 42 U.S.C.
§§ 10131, 10222; see Yankee Atomic Elec. Co. v. United
States, 536 F.3d 1268, 1280 (Fed. Cir. 2008). The parties
agree that Boston Edison’s claim for damages is premised
on a theory of partial breach of contract, but they disagree
about the type of damages that are available as a remedy
for that breach. The government and Entergy contend
that partial breach damages are limited to expenses
actually incurred by the time of trial and that they do not
include damages that are expected to arise from future
delays in DOE’s performance. Boston Edison defends the
trial court’s conclusion that damages for partial breach of
a contract may include the diminution in value of assets
of the non-breaching party that are sold before the time of
trial. Boston Edison argues that the government should
have foreseen that, as a consequence of DOE’s expected
delay in performance, Boston Edison would need to pay
Entergy more money to accept decommissioning responsi-
bilities. Although the trial court found that Boston Edi-
son’s losses were foreseeable as a result of DOE’s delay,
BOSTON EDISON COMPANY    v. US                              8

we agree with the government and Entergy that Boston
Edison cannot recover damages under a diminution-of-
value theory in a partial breach setting.

    In ruling that Boston Edison was entitled to damages
for diminution in value, the trial court relied on two legal
analogies. The court first observed that diminution in
value can be used to measure damages in construction
contracts if the contractor’s performance is defective or
incomplete.      See Restatement (Second) of Contracts
§ 348(2) (1981). In that situation, the claim is one for
total breach, and no further recovery is anticipated. See
id. § 348(2), illus. 2-4 (referring to completed or repudi-
ated contracts); see also Farnsworth on Contracts § 12.13,
at 251-52 (3d ed. 2004). The trial court also noted that
diminution in value is commonly used in tort law to
measure damages for injury to chattel. See Restatement
(Second) of Torts § 928 (1979). Neither of those analogies
applies here, as this is not a case of total breach, nor is it
a case of a single, discrete injury, in which the single
damages award is the victim’s only compensation. In this
case, the breach is partial, the injury is ongoing, and DOE
remains liable for future damages as they are incurred.

     In Indiana Michigan Power Co. v. United States, an
electric utility brought suit for a partial breach of the
Standard Contract seeking, inter alia, future damages for
the expected construction of a storage facility for housing
SNF. 422 F.3d at 1372. In denying recovery of those
damages, this court held that “[b]ecause of its highly
speculative nature, a claimant may not recover at the
time of the first suit for partial breach, prospective dam-
ages for anticipated future nonperformance resulting
from the same partial breach.” Id. at 1376. We noted
that in the case of a partial breach of contract, the award
is limited to damages incurred as of the time of suit, but
9                             BOSTON EDISON COMPANY   v. US

that subsequent suits may be brought as further damages
are incurred, without offending principles of claim preclu-
sion. Id. at 1376-78; see Restatement (Second) of Judg-
ments § 26, cmt. g (1982). We extended that rule in
Yankee Atomic Electric Co. v. United States, where we
held that the government could not offset partial breach
damages with prospective obligations of the non-
breaching party that had not yet matured. 536 F.3d at
1281 (“Just as the utilities cannot now collect damages
not yet incurred under the ongoing contract, the Govern-
ment cannot prematurely claim a payment that has not
become due.”) (internal citation omitted); accord Carolina
Power & Light Co. v. United States, 573 F.3d 1271, 1277
(Fed. Cir. 2009).

    Boston Edison argues that Indiana Michigan does not
bar it from recovering damages for diminution of value in
this case since it actually suffered losses associated with
DOE’s breach of contract when it sold Pilgrim before the
time of trial. That argument, however, is fundamentally
inconsistent with the rule of Indiana Michigan. Allowing
Boston Edison to recover damages equal to the payment
of estimated future breach-related costs to Entergy would
undermine the prohibition on recovery of future damages
in cases in which DOE has breached the Standard Con-
tract. Owners of nuclear power generation facilities
cannot skirt that restriction by paying buyers for the
estimated value of damages expected to be caused by
DOE’s future breach, and then suing the government to
recover the prepayment before any such breach-related
expenses are incurred. Put another way, the estimated
value of future damages agreed upon by two private
parties should not set the amount of the government’s
liability for partial breach. While the figure chosen by
Boston Edison and Entergy may turn out to be an accu-
rate estimate of the harm caused by DOE if the agency
BOSTON EDISON COMPANY   v. US                            10

continues to delay performance, that figure could also
prove to be excessive. The purpose of allowing a series of
recoveries for partial breach, as opposed to a single recov-
ery for total breach, is to avoid speculation about the
quantum of future damages. See Restatement (Second) of
Contracts § 243, cmt. e. The actual value of the future
damages attributable to DOE’s continued partial breach
of contract was no less speculative simply because Boston
Edison and Entergy attached a price to it.

    The trial court rejected the government’s argument
that DOE’s breach of contract did not cause Boston Edi-
son to fully fund Entergy’s estimated future breach-
related expenses. The court reasoned that the transfer of
the decommissioning responsibilities “only affected the
timing of the realization of [Pilgrim’s] diminished value.”
That analysis, however, does not account for the signifi-
cance of timing in the partial breach setting. We made
clear in Indiana Michigan that “prospective damages for
anticipated future nonperformance” are not recoverable in
a partial breach case. 422 F.3d at 1376. Such damages
are recoverable only in subsequent actions commenced
after the government’s continued breach of contract
results in further damages. We therefore reverse the
court’s award of damages to Boston Edison. In light of
our decision on that issue, we deny the government’s
cross-claim for an offset against the damages award to
Entergy as moot. 4

   4    We do not decide the respective rights of Boston
Edison and Entergy relating to any partial or total breach
of contract by DOE that postdates the decommissioning of
the Pilgrim facility. The trial court did not address that
aspect of the parties’ rights and obligations under the
contract between them, and we decline to do so in the first
instance. We also do not address the government’s argu-
ment that Boston Edison’s transfer of expected post-
11                             BOSTON EDISON COMPANY    v. US

                             III

    The government also appeals from the trial court’s
award of damages based on Entergy’s payment of NRC
fees. The NRC imposes fees on nuclear energy facilities to
recover its budgetary expenses. Some of the NRC’s costs
relate to facility-specific activities; the Commission recov-
ers those costs through fees imposed on individual facili-
ties. See 10 C.F.R. pt. 170. The Commission also incurs
general expenses; it recovers those costs through fees
assessed uniformly across different classes of licensed
nuclear facilities. See 10 C.F.R. pt. 171. The damages
awarded by the trial court relate to the Commission’s
generic fees.

     As of 1998, the Commission assessed an annual fee
against all operating nuclear generating facilities, includ-
ing Pilgrim. 10 C.F.R. § 171.15(b) (1999). Among other
things, that fee covered the NRC’s general expenses
related to nuclear plant decommissioning and wet storage
of SNF. At the same time, the Commission imposed a
separate annual fee on dry storage facilities. Id. § 171.16.
Boston Edison had not constructed a dry storage facility
to store fuel from Pilgrim, so it did not pay the dry storage
fee.

    Beginning in 1999, the NRC changed its fee structure.
The revised regulations eliminated the dry storage fee
and created a new Spent Fuel Storage/Reactor Decommis-
sioning (“SFS/RD”) fee.      The Commission used the
SFS/RD fee to recover its general expenses related to wet
storage, dry storage, and decommissioning activities. See
Revision of Fee Schedules; 100% Fee Recovery, FY1999,

decommissioning SNF expenses relieves DOE of its
obligation to pay those expenses once incurred.
BOSTON EDISON COMPANY   v. US                           12

64 Fed. Reg. 31,448 (June 10, 1999). As a result of the
rule change, operating nuclear generation facilities such
as Pilgrim began paying both an operating facility fee and
the SFS/RD fee. 10 C.F.R. § 171.15(b)-(d) (2000). Dry
storage facilities and non-operating facilities with SNF
stored onsite paid only the SFS/RD fee. Id. § 171.15(c)(1).
The Commission’s revised fee structure remained essen-
tially unchanged between 1999 and 2008.

    The trial court determined that the NRC changed its
rules in 1999 as a consequence of DOE’s breach of the
Standard Contract. The court also determined that
Entergy was forced to pay more in aggregate fees as a
result of the rule change, for two reasons. First, through
the SFS/RD fee, Entergy became responsible for sharing
the cost of the Commission’s dry storage activities, even
though it did not operate a dry storage facility. Second,
the NRC’s expenses relating to wet storage had changed
as a result of DOE’s breach, and Entergy’s SFS/RD fee
payments helped the Commission recover those wet
storage expenses. Accordingly, the trial court awarded
Entergy damages equal to the amount of the SFS/RD fees
it paid between 1999 and 2008, less the portion of those
fees attributable to decommissioning activities.

    At trial, the government argued that Entergy should
not recover any damages for fees associated with wet
storage, because Entergy would have paid fees for the
Commission’s wet storage activities even under the pre-
1999 rules. However, the government does not renew
that argument in this court. On appeal, the government’s
only specific quarrel with the damages award is that after
the change in the NRC’s fee structure, the Commission’s
costs associated with wet storage and decommissioning
were spread among a larger number of entities. Before
the rule change, only operating facilities had paid fees
13                            BOSTON EDISON COMPANY    v. US

associated with those costs; after the rule change, how-
ever, dry storage facilities and non-operating nuclear
facilities that stored SNF had to pay those fees as well.
The government argues that the damages award must be
adjusted to reflect any decrease in Entergy’s wet storage
and decommissioning fees due to the fact that more
entities were helping to pay the NRC’s wet storage and
decommissioning costs. In support of its argument, the
government points out that Entergy’s overall fees de-
creased following the NRC’s rule change.

    The trial court refused to adjust Entergy’s damages
award to account for the larger number of fee-paying
entities. The court determined that any correlation
between the decrease in Entergy’s overall fees and the
larger number of fee-paying entities was too attenuated to
justify an adjustment of the damages award. The court
explained that “[w]hile the pool of licensees to support
spent fuel storage costs may have increased as a result of
the rule change, those licensees brought with them added
costs to the NRC, costs attributable to DOE’s breach.” In
other words, the court reasoned that DOE’s breach had
increased the aggregate expenses of the NRC, and the
Commission had passed those costs onto operating nu-
clear facilities such as Pilgrim in the form of increased
SFS/RD fees. 5 The court concluded that Entergy’s re-

     5  The trial court also highlighted the fact that the
NRC reduced the percentage of its overall expenses that
was recovered by fees beginning in fiscal year 2001. See
42 U.S.C. § 2214(c)(2)(B). However, that “fee relief” is not
relevant to Entergy’s damages award because it affected
only the “surcharges” paid by operating facilities. See,
e.g., Revision of Fee Schedules; Fee Recovery for FY2001,
66 Fed. Reg. 32,452, 32,463-64 (June 14, 2001). The trial
court did not award Entergy any damages associated with
surcharges.
BOSTON EDISON COMPANY    v. US                            14

quested damages were a “reasonable approximation” of
the increased fees it incurred as a result of DOE’s breach
of the Standard Contract.

    Record testimony supports the trial court’s finding
that the NRC’s wet storage costs increased as a result of
DOE’s breach of the Standard Contract. However, the
trial court awarded Entergy damages corresponding to
the entire portion of the SFS/RD fee attributable to wet
storage, so any increase in wet storage costs was already
incorporated into the damages award. It was therefore
not proper for the court to treat an increase in Entergy’s
wet storage fees caused by the NRC’s increased costs as a
setoff against the reduction in wet storage and decommis-
sioning fees caused by the increase in the number of fee-
paying entities. The same would be true of any increase
in the portion of the SFS/RD fee attributable to dry stor-
age, because Entergy was awarded damages correspond-
ing to all fees that it paid relating to dry storage as well.

    In Southern Nuclear Operating Co. v. United States,
637 F.3d 1298, 1304 (Fed. Cir. 2011), we explained that a
non-breaching plaintiff bears the burden of persuasion to
establish both the costs that it incurred and the costs that
it avoided as a result of a breach of contract. The breach-
ing party may be responsible for affirmatively pointing
out costs that were avoided, but once such costs have been
identified, the plaintiff must incorporate them into a
plausible model of the damages that it would have in-
curred absent the breach. Id.; see also Energy Nw. v.
United States, 641 F.3d 1300, 1307-08 & n.5 (Fed. Cir.
2011).    In this case, the government has identified
avoided costs in the form of a reduction in the share of
wet storage and decommissioning fees paid by Entergy.
Under our precedent, Entergy is responsible for incorpo-
rating those cost savings into its damages calculation.
15                            BOSTON EDISON COMPANY    v. US

While damages need not be proved with absolute preci-
sion, see San Carlos Irrigation & Drainage Dist. v. United
States, 111 F.3d 1557, 1563 (Fed. Cir. 1997), we have
insisted in prior cases that the plaintiff’s model of dam-
ages incorporate reasonable assumptions about the costs
that it would have incurred absent breach of contract, see,
e.g., Energy Nw., 641 F.3d at 1307-08. If such a model
cannot be produced without assistance from the breaching
party, and the breaching party fails to aid the plaintiff in
constructing a model of the non-breach world, the trial
court may be justified in drawing factual inferences
regarding that issue in favor of the plaintiff. Id.

    We remand for the trial court to determine whether
adjustments should be made to Entergy’s damages award
to account for the decreased share of generic wet storage
and decommissioning fees paid by Entergy as a conse-
quence of the NRC’s rule change. On remand, Entergy
will be responsible for quantifying and incorporating all
effects of the change in the Commission’s fee structure
into its damages model. 6

                            IV

    The trial court awarded Entergy overhead costs asso-
ciated with the procurement of materials and capital

     6  The government makes a general argument that
Entergy failed to meet its burden of proof to show the
amount of the NRC fees that it would have paid absent
DOE’s breach of the Standard Contract. That argument
carries no weight absent specific allegations of damages
wrongfully awarded to Entergy. The government bears
responsibility for identifying particular problems with
Entergy’s calculation. See S. Nuclear Operating Co., 637
F.3d at 1304. On remand, the government may not
challenge aspects of Entergy’s damages calculation that it
has not contested on appeal.
BOSTON EDISON COMPANY   v. US                            16

expenditures made in connection with Entergy’s mitiga-
tion efforts in response to the government’s breach. The
court found that Entergy’s method of assigning overhead
costs to those projects complied with Generally Accepted
Accounting Principles (“GAAP”) and Federal Energy
Regulatory Commission regulations. Based on record
evidence, the court concluded that the overhead costs
were actually incurred and “were explicitly tied to activity
involving the re-racking projects.”

    The government argues that in order to recover dam-
ages for indirect overhead costs, Entergy must prove that
additional costs were incurred as a result of DOE’s
breach. We rejected that argument in our recent decision
in Energy Northwest v. United States, 641 F.3d 1300 (Fed.
Cir. 2011). In that case, as here, the electric utility
sought to recover the portion of overhead costs (calculated
using GAAP) that was attributable to mitigation projects.
We held that “[o]nce a plaintiff has proved that certain
work was undertaken because of the breach . . . he is
entitled to prove the amount of the associated cost (in-
cluding both direct and indirect costs) by whatever rea-
sonable techniques are available.” 641 F.3d at 1309. The
government has not shown clear error in the trial court’s
finding that Entergy’s overhead costs were directly at-
tributable to mitigation projects, and we therefore uphold
the award of those costs to Entergy. See S. Cal. Edison v.
United States, No. 2010-5147 (Fed. Cir. Aug. 23, 2011),
slip op. at 6-7; Dairyland Power Coop. v. United States,
645 F.3d 1363, 1373-74 (Fed. Cir. 2011); Energy Nw., 641
F.3d at 1309-10; Carolina Power & Light, 573 F.3d at
1277.

                                V
17                             BOSTON EDISON COMPANY    v. US

    Entergy seeks to recoup the cost of securing capital
for mitigation projects undertaken as a result of DOE’s
breach. The trial court held that Entergy’s recovery of the
cost of capital is barred by 28 U.S.C. § 2516(a), which
provides that “[i]nterest on a claim against the United
States shall be allowed . . . only under a contract or Act of
Congress expressly providing for payment thereof.” In its
briefing before this court, Entergy argued that it sought
interest as a claim as opposed to interest on a claim. See
Wickham Contracting Co. v. Fischer, 12 F.3d 1574, 1582
(Fed. Cir. 1994). Entergy also argues that parties con-
tracting with the government have recovered financing
costs in other cases. See, e.g., Bluebonnet Savings Bank,
F.S.B. v. United States, 266 F.3d 1348 (Fed. Cir. 2001).

    Our recent opinion in Energy Northwest rejected ar-
guments identical to Entergy’s and held that private
parties to the Standard Contract may not recover the
costs of financing mitigation projects. 641 F.3d at 1310-
13 (discussing “interest as a claim” argument); id. at 1311
n.6 (discussing prior cases). At oral argument, Entergy
withdrew those arguments in light of our decision in
Energy Northwest. Nevertheless, Entergy continues to
argue that it is entitled to recover the cost of securing
capital because DOE has “assumed the status of a private
commercial enterprise.” Library of Congress v. Shaw, 478
U.S. 310, 317 n.5 (1986). Entergy contends that Congress
waived the no-interest rule in the Nuclear Waste Policy
Act (“NWPA”) by compelling the government to enter into
the business of collecting and disposing of nuclear waste
materials.

   Entergy cites the Supreme Court’s decision in Stan-
dard Oil Co. v. United States, 267 U.S. 76 (1925), in
support of its argument. In Standard Oil, the federal
Bureau of War Risk Insurance issued a standard com-
BOSTON EDISON COMPANY   v. US                           18

mercial insurance policy to a shipper to insure against the
risks of war. After holding the government responsible
under the policy for the loss of a steamship, the Court
awarded prejudgment interest to the shipper. The Court
reasoned that “[w]hen the United States went into the
insurance business, issued policies in familiar form and
provided that in case of disagreement it might be sued, it
must be assumed to have accepted the ordinary incidents
of suits in such business.” 267 U.S. at 79.

    The Supreme Court clarified the scope of the commer-
cial enterprise exception to the no-interest rule in United
States v. Worley, 281 U.S. 339 (1930). Worley concerned a
veteran who held an insurance policy from the govern-
ment payable upon death or total and permanent disabil-
ity. The Court held that the veteran’s widow could not
recover interest on insurance payments that had been
wrongfully withheld, stating that “[t]here is nothing in
the conduct of the United States in respect of life and
disability insurance from which an agreement on its part
to pay interest may be implied.” 281 U.S. at 344. The
Court distinguished Standard Oil as a case that turned
on the government’s contractual promise to pay the
shipper’s losses within a specified period of time. Id. at
342. The Court also noted that, in Standard Oil, the
government had profited significantly from its shipping
insurance contracts, not unlike a private commercial
enterprise, whereas it did not profit from the veterans’
insurance program. Id.

    The commercial enterprise exception does not apply in
the present case. The NWPA was designed to solve the
national problem of permanent disposal of spent nuclear
materials. See Neb. Pub. Power Dist., 590 F.3d at 1360.
The Standard Contract effectuated the intent of Congress
to assign responsibility for nuclear waste disposal to the
19                           BOSTON EDISON COMPANY   v. US

federal government “in order to protect the public health
and safety and the environment,” and to ensure that the
private generators and owners of the waste material bore
the cost of its disposal. 42 U.S.C. § 10131(a)(4); see 10
C.F.R. § 961.11 (Standard Contract, preamble). Thus, the
government’s purpose in entering into the Standard
Contract was not to turn a profit but to achieve public
objectives. See Sandia Oil Co. v. Becton, 889 F.2d 258,
263 (10th Cir. 1989) (commercial enterprise exception
limited to a “business-type activity with a business-
minded purpose”). Entergy has not pointed to any provi-
sion of the Standard Contract or the NWPA that would
indicate Congress’s intent to waive the no-interest rule.
Consistently with our decision in Energy Northwest, we
conclude that Entergy may not recover the cost of secur-
ing capital to fund its mitigation efforts.

 AFFIRMED IN PART, REVERSED IN PART, AND
               REMANDED