Free Stipulation - District Court of Federal Claims - federal

Case 1:01-cv-00249-CFL

Document 192

Filed 06/23/2005

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS TENNESSEE VALLEY AUTHORITY, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 01-249C (Judge Lettow)

STIPULATIONS The parties stipulate to the following facts relating to plaintiff's claim for recovery of the amounts denominated as Allowance for Funds Used During Construction ("AFUDC"): 1. TVA's damages claim includes an amount of $2,342,581.07 based upon an interest calculation denominated as Allowance for Funds Used During Construction ("AFUDC"). Each month, TVA's Fixed Assets Accounting Group calculates the cumulative cost expended by each of TVA's divisions or organizations, such as TVA Nuclear, for construction work in progress ("CWIP"). This cumulative CWIP cost for each organization is referred to as its "AFUDC Base." The Fixed Assets Accounting Group then reports the AFUDC Base for each organization ("Organizational AFUDC Base") to TVA's Treasurer's Office. TVA's Treasurer's Office sums all of the Organizational AFUDC Bases to compute an aggregate "Corporate AFUDC Base." AFUDC is calculated on a monthly basis by TVA's Treasurer's Office in the following manner: a. TVA's Treasurer's Office calculates an average of the Corporate AFUDC Base for the previous month ("Average Prior Month Corporate AFUDC Base") by dividing the sum of the Corporate AFUDC Base at the beginning and end of that month by two. TVA's Treasurer's Office then calculates the average monthly interest rate it has been charged on all of the long- and short-term debt it has issued to finance the capital expenditures and operating costs of all of its corporate divisions or organizations, such as TVA Nuclear ("AFUDC Monthly Interest Rate").

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Case 1:01-cv-00249-CFL

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c.

TVA's Treasurer's Office then applies the AFUDC Monthly Interest Rate to the Average Prior Month Corporate AFUDC Base.

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TVA's Treasurer's Office then allocates a percentage of the AFUDC to each organization with capital projects pro rata, based upon the percentage each organization's Organizational AFUDC Base bears to the Corporate AFUDC Base. TVA's Fixed Assets Accounting Group takes the AFUDC amount allocated to each organization and allocates a percentage of that amount to each of the capital projects pro rata, based upon the percentage that project's capital costs bears to the organization's total capital project costs. TVA does not issue debt to raise proceeds for any specific capital project. None of the long- and short-term debt that serves as the basis for its calculation of AFUDC was specifically issued as a result of, or in connection with, the spent fuel storage projects at issue in this case. TVA funds all of its expenditures from operating revenues, debt issuance, or lease financing. TVA does not raise capital through the issuance of stock. TVA is a profit-neutral organization, meaning that all net revenues must be reinvested in its operations or utilized to pay down interest and principal on outstanding debt. At all times relevant, TVA has and continues to issue new short-term debt on a near-daily basis. At all times relevant, TVA has and continues to issue new long-term debt on a regular basis. Under TVA's enabling act, the Tennessee Valley Authority Act of 1933, 16 U.S.C. § 831 et. seq., TVA must set its rates for power at a level "which will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system . . . [and] debt service on outstanding bonds . . . ." TVA's calculation of AFUDC is in accordance with Generally Accepted Accounting Principles ("GAAP"). The parties further stipulate as follows:

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Three Holtec International multipurpose canisters ("MPCs") were loaded with 32 spent nuclear fuel assemblies each during the first SQN dry storage campaign. The casks -2-

Case 1:01-cv-00249-CFL

Document 192

Filed 06/23/2005

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required 11, 10, and 9 days, respectively, to load and transfer to the independent spent fuel storage installation pads, with the average time being ten days. Respectively submitted,

MAUREEN H. DUNN General Counsel EDWIN W. SMALL Assistant General Cousnel

PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director

s/ Peter K. Shea PETER K. SHEA Senior Attorney Office of the General Counsel Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, Tennessee 37902-1401 Tel: (865) 632-7319 Fax: (865) 632-6718

s/ Harold D. Lester, Jr. HAROLD D. LESTER, JR. Assistant Director

s/ Sonia M. Orfield SONIA M. ORFIELD Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tel: (202) 353-0534 Fax: (202) 307-2503

June 23, 2005

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