Full opinion text
DONALD RUSSELL, Circuit Judge: This litigation had its beginning over two decades ago, though actual litigation has been in progress only a little over a decade. During this period the development of a program of peaceful use of nuclear power as authorized by Congress, begun with such enthusiasm, has since experienced a chequered career, marked by many changes in official policy and subjected to increasing regulatory and judicial constraints. All of these circumstances have contributed to the complexities and difficulties of the present litigation. In its court life of a little over a decade this litigation has generated thousands of pages of trial and discovery testimony and has produced for the record innumerable exhibits, some of an extremely technical nature. Highly expert engineering and scientific testimony and records have been developed. The result has been three separate district court decisions, spread over about four years, which have not been consistent. It is our task on this appeal to resolve the issues that have arisen in the litigation over the last decade in these contradictory decisions. I. The subject of the action is a contract between the appellee, Florida Power & Light Company (Florida), and the appellant, Westinghouse Electric Corporation (Westinghouse). This contract had its source in the early 60’s when Florida determined to give careful consideration to the construction of a nuclear power plant or plants at Turkey Point, in the State of Florida. Florida’s interest in such a development was prompted by the high cost to it of transporting coal or oil necessary for firing its electric generating plants. Nuclear power was thought likely to provide Florida with a less expensive alternative to coal or oil for its power generation. Florida invited three concerns experienced in providing nuclear power plants to submit detailed proposals for the plant it was considering. These concerns were the defendant Westinghouse, the General Electric Corporation, and Babcock & Wilcox. Only Westinghouse and General Electric Corporation, however, responded to Florida’s invitation with complete proposals. The proposals of the two were carefully compared and evaluated by Florida over a considerable period of time. Florida finally settled on Westinghouse as its supplier, selecting the latter’s pressurized water reactor (PWR) as the favored facility. Florida, in announcing the signing of the contract of purchase with Westinghouse, said the facility selected had “been operating successfully for several years in commercial generating stations” both in this country and abroad. After Westinghouse and its PWR facility had been chosen by Florida, the parties engaged in the drafting of a definitive purchase contract. The contract negotiations proceeded over a number of months. In the course, drafts were exchanged between the parties. The district court found that, while Westinghouse was supposedly more expert in the field of nuclear energy, Florida was more expert in the drafting of agreements and that it had demonstrated this superior expertise by “out-negotiating” Westinghouse in negotiating the ultimate purchase contract. Whether Westinghouse was “out-negotiated” or not is, however, irrelevant in this context since the contract was freely and voluntarily executed by the parties. Under the contract executed Westinghouse, in consideration of Florida’s agreements, obligated itself (1) to supply Florida with a Westinghouse PWR-type nuclear power installation, (2) to furnish at a fixed price the uranium to be required for the first ten years of the plant’s operations, and (3) to grant Florida an option to exercise one of three options for the disposal of the spent fuel discharged by the plant’s reactors for the first ten years of the plant’s operations. One of the options (Option A) contemplated disposal of the spent fuel by Florida; the other two, with some minor variations, (Options B and C) provided for disposal by Westinghouse. Florida was required to exercise its option on or before “initial criticality” (i.e., before the plant became operational). Initial criticality, namely when the plants became operational, (the contract had been expanded after initial execution of the contract to include the furnishing of a second plant) was reached in October of 1972 for the first plant and in June, 1973 for the second. The two plants have been successfully operated since completion with considerable savings to Florida and its customers in energy costs. While there was a dispute between the parties with respect to that part of the contract which imposed on Westinghouse the obligation to furnish uranium at a fixed price for the first ten years of the plants’ operations, this controversy has been settled between the parties and is not an issue on this appeal. The only part of the contract involved in this appeal is that section dealing with the disposal of spent fuel. In October, 1972, Florida formally elected to require Westinghouse to dispose of the spent fuel discharged by the plants’ reactors under Option C of the contract. It had, though, earlier in 1970 informally [and in 1972 formally] informed Westinghouse that it was electing to require Westinghouse to do this. Option C is set forth in Section 27(a)(2) of the contract. It is: Section 27. Scope (a) Westinghouse will: (2) Remove the irradiated fuel from the Plant site and dispose of it as Westinghouse sees fit; Earlier in 1969, Westinghouse had, with the knowledge of Florida and on the assumption it might be required by Florida to dispose of the spent fuel at the plant, begun discussions with Allied General Nuclear Services (AGNS) which had a construction permit from the Atomic Energy Commission (AEC) to construct a reprocessing plant at Barnwell, South Carolina, for the purpose of securing reprocessing of the Turkey Point spent fuel at AGNS’s reprocessing plant then under construction as a means of disposing of the Turkey Point spent fuel. By April, 1970, these negotiations resulted in a letter of intent between Westinghouse and AGNS for the reprocessing of such spent fuel at the Barnwell plant “subject to the negotiation of a mutually acceptable agreement.” The parties arrived at an unsigned agreement in 1974. AGNS, however, refused to sign the agreement. As summarized in a Westinghouse memorandum, AGNS “claimed that its contracts, including a letter of intent agreement with W[estinghouse] were no longer valid and must be renegotiated. AGNS claim[ed] that changing government regulations [had] increased its costs several times. They are currently seeking government aid in several areas to assure their ability to run the facility. W[estinghouse] and AGNS have discussed several proposals since AGNS refused to sign the original contract in 1974. These proposals have been open ended on the cost to W[estinghouse] while maintaining a degree of profit for AGNS. W[estinghouse] continues to maintain its position that these proposals are not consistent — with the letter of intent and draft agreement agreed on by the parties.” AGNS itself stated its reasons for refusing to execute the agreement in a formal letter to Westinghouse dated March 28, 1974: During the more than four years since we submitted our proposal, matters have developed regarding the processing of fuel which are considerably different from those anticipated at time of submission of our proposal. Therefore, we advise that we will not be in a position to execute an agreement until such matters have been further discussed with you. For some time while these negotiations between AGNS and Westinghouse were going on, Florida had been storing the spent fuel on-site by reracking it. However, it had been understood that, with the exercise of Florida of Option C under the contract, Westinghouse was to remove the spent fuel when it had cooled and this was estimated at about six months after removal of the fuel from the core of the installation. When spent fuel was ready for removal and disposal, Florida called on Westinghouse in mid-1975 to proceed to dispose of the spent fuel at the site. Westinghouse responded to this request by advising Florida in writing on September 2, 1975, that at that time it was unable to dispose of the fuel and was also unable to make “any plans for the removal of the spent fuel from the Turkey Point site.” It explained the reason for this position: The schedule for removing and reprocessing the Turkey Point discharged fuel is, of course, dependent on the Allied-General Nuclear Services (AGNS) reprocessing facility schedule. Although Westinghouse has had recent discussions with AGNS, major uncertainties still exist which make it impossible to establish the long-range plans you [Florida] inquired about. No agreement was thereafter reached between AGNS and Westinghouse. In the meantime, Florida became concerned with the accumulation of spent fuel at the site and Westinghouse’s failure to dispose of such spent fuel. To resolve this problem, it filed this action. Florida sought in its action specific performance of Westinghouse’s obligation to dispose of the spent fuel or, in the alternative, damages for breach of the contract. Westinghouse answered the action, alleging in defense “(1) that its non-performance [under the contract was] excused by the common law doctrine of impossibility of performance; (2) that the government’s change of policy concerning commercial reprocessing discharge[d] its duty under the force majeure clause; (3) that performance by it has been rendered commercially impracticable under § 2-615 of the Uniform Commercial Code; (4) that the non-availability of reprocessing [had] frustrated the purposes of the contract; and (5) that the parties’ erroneous expectation that the spent fuel would be reprocessed discharge^] Westinghouse’s obligation under the doctrine of mutual mistake.” After a trial, the district court issued on June 25, 1981, its first opinion herein, in which it dismissed the several pleas in defense by Westinghouse but deferred for further discussion and review the appropriate remedy for such breach. Three years later, it issued a second opinion, which, though reaffirming substantially its earlier dismissal of Westinghouse’s pleas in defense, found that, as a result of unanticipated events, performance under the contract by Westinghouse was “vitally different” from that anticipated at the time of the contract’s execution, thereby excusing performance by Westinghouse. It, therefore, divided the costs of reracking the spent fuel on-site between the parties but imposed the costs of permanent disposal and storage upon Florida, on the assumption that Florida would be permitted to pass such cost on to its ratepayers. Following a request for rehearing by Florida, the district court issued a third opinion on November 8, 1984, in which, again, it in effect divided the costs of reracking the spent fuel between the parties but imposed the obligation to pay for the storage of such fuel on Westinghouse. Westinghouse has appealed from that order and the judgment issued thereunder. It is that judgment which is the subject of this appeal. II. An understanding of the questions raised by this appeal and of the rulings of the district judge herein requires a limited review of the development of atomic energy and, in particular, the Governmental postwar policy toward the private development of peaceful uses of this atomic energy. It was this Governmental policy to foster peaceful use of atomic energy, or, more correctly, the changes in that policy, which have created this controversy and the facts on which Westinghouse’s defense of impossibility rests. Atomic energy, the so-called “splitting-of-the-atom,” was initially the product of Government research and action under a program generally described as the Manhattan Project, a program carried out successfully with great dispatch and in the utmost secrecy and security during World War II at a cost of over $2 billion, with an employment force of 600,000 persons spread over 37 installations in the United States and Canada. As first contemplated, its purposes envisioned a military use for the product. In the years after the end of the war, however, interest in the peaceful use of atomic energy in the private sectors was sparked. Any program for such use, though, could evolve only as a part of a broad Governmental program under federal regulations which would preserve the security of our military atomic program and contemporaneously provide for the commercial use of such energy under circumstances assuring the safety and health of the public. Congress, in the Atomic Energy Act of 1954, as amended, 42 U.S.C. §§ 2011 et seq., sought to accomplish this purpose so far as the peaceful use of such energy was concerned. In the legislative findings in support of this 1954 Act the Congress declared that the “[sjource and special nuclear material, production facilities, and utilization facilities” for the use of nuclear energy were to be treated as “affected with the public interest” and that the regulation of such use and any facilities connected therewith, whether for military or peaceful purposes, were to be strictly regulated “in the national interest to assure the common defense and security and to protect the health and safety of the public.” Section 2012(e). Within such purposes, the Congress directed, inter alia, the formulation of a “program to encourage widespread participation in the development and utilization of atomic energy for peaceful purposes to the maximum extent consistent with the common defense and security and with the health and safety of the public.” Section 2013(d). See 1954 U.S.Cong. & Admin. News, pp. 3458-89, § 2051(a)(4) of the Act. The Atomic Energy Commission (AEC) was created and vested with the responsibility of effectuating this program and of carrying out the purposes mandated by the Act, including the development of a commercial nuclear electric industry, Sections 2031 et seq. The first area identified by the AEC as one where the peaceful use of nuclear energy might be efficiently and safely applied was electric power generation. The AEC had already, by its own statement, “acquired substantial experience in the design, construction, and operation of nuclear power reactors.” It, therefore, knew that the use of nuclear energy to generate electric power was practical. But the use of nuclear materials in power generation had to include more than the solution of the fissionable process and the design and operation of practical and efficient nuclear power reactors; a safe, effective method of disposing of the irradiated fuel at the end of the processing stage was equally necessary because of the severe danger such fuel posed for public health and safety. This spent or irradiated fuel, which includes plutonium with “a half-life of 25,000 years,” admittedly posed a “severe potential health hazard” and its disposal presented “complex technical problems.” Natural Resources Defense Council v. U.S. Nuclear Reg. Comm’n, 547 F.2d 633, 638, n. 10 (D.C.Cir.1976). Both the AEC and Congress recognized that the “public acceptance of nuclear power [was] dependent upon resolving” this problem of disposal of spent fuel which was aptly described as the “most pressing” concern in the promotion of a commercial nuclear power development. 1980 U.S. Code Cong. & Admin.News at 6933. It was plainly recognized that without the assurance of a safe method of disposal, no utility would have prudently considered the hazard of constructing a nuclear power plant. Absent that assurance, any utility which constructed a nuclear power plant could only have looked forward to that early day when inability to dispose of the fuel would have required it to abandon the heavy investment it had made in the plant without any guarantee of recoupment through rates. Moreover, because of the complexity and technological uniqueness and hazard to public health and safety, disposal of this spent fuel was not an endeavor to be left to private industry but was a matter, the responsibility for which had to be the subject of careful governmental attention and strict regulation. And the Congress had made plain that this was the policy of the Government. Thus, in an official legislative Report reviewing the progress of federal management of nuclear energy under the Atoms-for-Peace Program, Congress had declared positively that “[t]he stated policy of the Federal Government has always been that the safe disposal of high-level waste is to be accomplished under Federal management.” 1980 U.S.Code Cong. & Admin.News at 6934. In discharging this responsibility to assure reasonably safe disposal of spent fuel in its Atoms-for-Peace Program, the Government had but two possible options: one was the promotion of disposal by storage of the fuel in off-site surface depositories; the other the promotion of reprocessing of such fuel. However, the Government had not regarded storage as a feasible and acceptable method of disposal and took no steps to develop or provide this method of disposal of spent fuel. This had been true from the very beginning of the Government’s nuclear program and it remained so for all practical purposes until 1977, when reprocessing was effectively suspended by judicial actions and presidential dictates. Neither in its own operations nor in its planning under the Atoms-for-Peace Program had the Government contemplated, recommended, or supported the use of storage depositories for such disposal. Until 1971, it had never given any thought even to an experimental program for storage of the fuel, and even then it did so only under the pressure of environmental groups contesting the safety of reprocessing. Because of the complaints of these groups, the Commission made a stab in that year at developing an experimental storage depository for spent fuel at Lyons, Kansas. Such attempt, however, quickly foundered under “an intense political attack on the program,” followed by the revelation of “technical flaws in the site.” This failure of an attempt at experiment with storage was later described in the legislative history of the Nuclear Waste Policy Act of 1982 (NWPA) as “now widely recognized as the landmark event in nuclear waste management history which would color future repository siting activities through the present day.” 1982 U.S.Code Cong. & Admin.News at 3793. Five years later, in 1976, after the courts had suspended further licensing of reprocessing facilities pending their action, the commission sought to renew its earlier checkmated 1971 effort by planning an experimental storage depository in Michigan, but a “political uproar quickly brought the program to defeat again, this time even before enough drilling could be accomplished to determine whether technical flaws in the site existed.” Ibid., at 3793. In 1977 President Carter terminated the uncertainty, deferring indefinitely the commercial reprocessing and recycling of the plutonium produced in the commercial nuclear power plants and in the process terminating the promotion of the Atoms-for-Peace Program. He declared in connection with AGNS that “[t]he plant at Barnwell, South Carolina, will receive neither Federal encouragement nor funding for its completion as a reprocessing facility.” While he terminated reprocessing, he promised as a replacement the construction of permanent storage depositories for spent fuel. He was, however, unable to obtain Congressional authorization for such construction. As late as 1982, the Congressional Committee, in reporting NWPA, remarked reprovingly that “[t]he failure of the government to provide a permanent waste disposal facility during more than 30 years of Federal nuclear activities is unmitigated.” Ibid., at 3794. And, while the Congress in the 1982 Act provided authorization for storage depositories for spent fuel, even the sites for such depositories have not yet been selected and the Commission in a Report dated August 31,1984, said that, while it found it to be a “reasonable assurance that a repository would be available by 2007-09 “under the 1982 Act,” it cautioned that “[t]he repository development schedule may have to accommodate such contingencies as vetoes of proposed repository sites, prolonged public hearings, protracted litigation, possible project reorientation, or delay in promulgation of siting guidelines.” 49 Fed.Reg. at 34663. It seems clear from this review that at no time since the enactment of the Atoms-for-Peace Program in 1954 has storage for the disposal of spent fuel been available for commercial nuclear power plants, nor did any planning for such facilities, and then only tentatively, actually begin until reprocessing was barred in 1977. Reprocessing as a method for disposing of spent fuel, on the other hand, was from the beginning of the 1954 program regarded and actively advanced by the AEC as not only an available means for disposal of spent fuel from nuclear power reactors but as the only proper and acceptable method. As Judge Edwards in his concurring opinion in Natural Resources, Etc. Council v. U.S. Nuclear Reg. Comm’n, 685 F.2d 459, 502 (D.C.Cir.1982), said: “The NRC’s original assumption was that all spent fuel produced by nuclear power reactors would be reprocessed before it was stored.” In its own operations prior to the 1954 Act the Government had acted on this assumption and had developed and used reprocessing for the disposal of the spent fuel discharged from its own reactors. Based on this experience, reprocessing was in its judgment an established and proven method for the disposal of the spent fuel. Moreover, all those knowledgeable in the nuclear field agreed with this judgment of the Government that reprocessing should be assumed as the proper way to dispose of the spent fuel. It was manifest then that both the Government and industry accepted reprocessing as the only practical method of disposing of spent fuel during the 60’s and that storage was neither recommended nor considered as a proper method of disposing of spent fuel. It was not enough, though, that reprocessing was an acceptable and proven method for disposing of spent fuel; the power industry had to be assured that reprocessing would be available when the spent fuel discharged by their proposed nuclear power reactors required removal from on-site. This was important because there were in the 50’s, when the Atoms-for-Peace Program was launched, no commercial reprocessing facilities, and the only available reprocessing facilities were owned and controlled by the Government. If its program for peaceful use of nuclear energy was to succeed, the AEC recognized the wisdom of promoting the development by industry of a commercial reprocessing industry in order to relieve the Government of any responsibility for providing reprocessing tor the commercial nuclear plant and the even more important need to allay any concern on the part of the power industry that it would have available reprocessing for the disposal of its spent fuel, whether commercial reprocessing ever eventuated or not. The Government addressed the first need by offering to industry access to much of its own technological and engineering research and development particularly in the reprocessing field. On the other hand, in order to assure the power industry about the availability of reprocessing in its own facilities, the AEC issued on February 27, 1957, an official announcement in the Federal Register, of “a [Governmental] policy of assuring the nuclear power industry that the Government would, in the event that commercial reprocessing services were not available at reasonable times and conditions when irradiated power reactor fuels were discharged from their reactors, make financial settlement for the materials contained in those elements, and reprocess them.” The language of the Commission’s order was: The Commission will undertake under contracts individually negotiated with persons licensed pursuant to sections 103 or 104 of the act, and possessing spent reactor fuel or blanket materials, to provide for processing of these materials in facilities owned by the Commission. Such processing will include the mechanical, metallurgical, and chemical treatment of these materials to recover the source and special nuclear materials remaining therein, and the storage of resulting wastes. This assurance to the utility industry was critical to the promotion of a nuclear power industry. As we have already observed, without this promise, it was highly unlikely that any utility would have been willing to accept the financial hazard of constructing an expensive nuclear power plant. The Government by this announcement intended to relieve this anxiety on the part of the industry by providing the power industry with the positive assurance of the availability when needed of facilities to dispose of its spent fuel for such nuclear reactors as it should install. Subsequent to its official announcement of its assurance to the electric industry that it would provide reprocessing services for any commercial nuclear power plants if commercial reprocessing were not available, the Government demonstrated its firm resolution to carry out that commitment. Although the Government’s reprocessing facilities would require some minimal adaptation in order to process spent fuel from the commercial nuclear reactors, the Congress, at the instance of the Commission, had made available funds for such adaptation in 1959. In its 1961 report (p. 47), the Commission had said: The Commission’s responsibility to receive irradiated fuels from research, test, power and propulsion reactors [for reprocessing] and to make financial settlement for the contained fuel values in accordance with existing notices (sic) has been consolidated at the Commission’s Savannah River and Idaho Offices. Moreover, see AEC Report for 1963, p. 54. The AEC clearly demonstrated its ability to reprocess commercial spent fuel by the execution in the early 60’s of contracts covering the reprocessing of spent fuel from the Yankee Atomic Electric Plant at Rowe, Massachusetts, and the Dresden Nuclear Power Station near Morris, Illinois. And in its 1966 Report, the Commission advised the Congress that its “Idaho and Savannah River operations received ‘spent’ fuel for processing from 3 domestic and 10 foreign reactors during the year.” It was thus clear that the Government not only intended but was punctually complying with the commitment given by it to the commercial nuclear power industry in its official announcement of 1957. The electric power industry in turn had responded affirmatively to this activity by the Commission. In 1958, the next year after the Commission’s assurance to the power industry, the first license for a nuclear power plant was issued and, since that time, some 82 licenses for the operation of nuclear power plants were issued. Moreover, in 1964, the Congress, in order to encourage the construction of commercial plants, had authorized utilities contracting for such plants to acquire and use uranium. P.L. 88-489, 78 Stat. 602; 1964 U.S.Code Cong. & Admin.News, 3105. Industry was not far behind the utilities, which were proceeding to construct nuclear power plants, in responding on its own part to the Government’s encouragement to enter the reprocessing field. The first commercial reprocessing facility was undertaken by the Nuclear Fuel Services, Inc. (NFS) in upper New York under a provisional construction permit issued in 1963. See 1963 AEC Report to Congress, pp. 53-54. Incidental to this permit, the AEC had entered into an agreement with NFS that if sufficient spent fuel was not offered for reprocessing after completion of the facility to permit the full operation of the facility, it (the Commission) would offer to NFS “certain of the private fuels now on hand or expected to be received by the AEC pursuant to its March 12, 1957, Federal Register notice offering to accept irradiated fuels for licensees until June 30, 1967, or until private reprocessing services are available at reasonable charges.” The AEC, also, announced: [A]fter start-up of the NFS plant, AEC-owned facilities will no longer receive irradiated reactor fuels unless the private processing services are not available at charges and terms which the AEC considers to be reasonable. In addition, the AEC has agreed not to intercede in any arrangement whereby a reactor operator voluntarily agrees to have his fuel processed at NFS. However, if a reactor operator believes that NFS’s charges and terms are unreasonable, it can present its case to AEC. If the Commission determines that such charges and terms are unreasonable, the AEC will accept the reactor operator’s irradiated fuel under the March 12, 1957, Federal Register notice. Construction had proceeded expeditiously on the reprocessing facility of NFS at West Valley, New York. The ground-breaking ceremony for the plant had been held on June 13, 1963, and in April 1966 (over a month before the contract involved in this litigation was signed) full-scale processing of irradiated reactor fuel began at the plant. That plant operated successfully from 1966 to 1971. In September of that same year (1966) General Electric announced it would build a reprocessing plant near Morris, Illinois, with operations expected to begin by the early 70’s. See 1966 Report of AEC, p. 359, App. 836. Allied Chemical in the same year declared its interest in developing a reprocessing plant. NFS announced in 1970 “plans to modify and expand its West Valley, N.Y., facility over the next five years,” practically doubling its capacity, and construction had continued in the meantime on General Electric’s Morris, Illinois, facility with completion extended to July 1, 1971. In December 1970, a construction permit was issued to the Allied Gulf Nuclear Services (AGNS), a joint subsidiary of Allied Chemical Nuclear Products, Inc. and Gulf Energy, and Environmental Systems, Inc., for the Barnwell Nuclear Fuel Plant to be located at Barnwell, South Carolina. In Natural Resources Defense Council, supra, 539 F.2d at 832, there is a comment that during this time Westinghouse itself had “applied for a license to undertake mixed oxide fuel fabrication at a proposed plant near Anderson, South Carolina.” The testimony in this case also is that in this period Exxon Nuclear Corporation had retained Bechtel Power Corporation to begin designing work on a large reprocessing plant and had acquired an option on 2,000 acres of land at Oak Ridge, Tennessee, on which it intended to build the plant. Encouraged by this response by industry and feeling assured of private industry’s ability to supply all needed reprocessing services, the Commission in the late 60's deferred any further development of its own reprocessing facilities in order to service the increasing number of commercial nuclear power plants. It is obvious that by 1970, reprocessing was firmly accepted by the Government and the utility industry as the approved and proper method for disposing of spent fuel. And this was recognized by the Congress and publicly declared by the AEC. According to the House Report on the NWPA of 1982 (1982 U.S.Code Cong. & Admin.News at 3793), the Congressional understanding was categorically stated: During this period [i.e., prior to 1976] the U.S. nuclear industry relied not on the repository development program but rather on a spent fuel reprocessing industry, and recycle of uranium and plutonium, as the solution to the “back end” of the nuclear fuel cycle. Utilities’ liability for nuclear spent fuel was expected to end when the fuel was shipped to a reprocessing facility; contracts for reprocessing services were expected to cover management and disposal of waste streams from the facilities. The Commission in an order published in 40 Fed.Reg. 42801, used similar language in describing the only method contemplated by the electric utility industry for disposing of spent fuel discharged by nuclear power reactors in the period prior to 1977: From the early days of the nuclear power industry in this country, electric utilities planning to construct and operate light water nuclear power reactors contemplated that the used or spent fuel discharged from the reactors would be chemically reprocessed to recover the remaining quantities of fissile and fertile materials (uranium and plutonium) and that the materials so recovered would be recycled back into fresh reactor fuel. It was contemplated by the nuclear industry that spent fuel would be discharged periodically from operating reactors, stored in onsite fuel storage pools for a period of time to permit decay of radioactive materials contained within the fuel and to cool, and periodically shipped off-site for reprocessing. This recitation of events makes it plain that at the time the contract in this case was executed (1966) the practicality of reprocessing as a method of disposing of spent fuel discharged from nuclear reactors at private nuclear electric generating plants had been demonstrated both in the Government’s plants and in NFS’s facility and further that the AEC had, by reprocessing spent fuel for three private nuclear electric generating plants at its own facilities, shown that it was strictly observing its 1957 assurance to the utility industry of providing reprocessing of such fuel at its plants where reprocessing was not available at reasonable charges at private reprocessing facilities. Further, as the later 1970 Reports of the AEC established, NFS was not only successfully operating its reprocessing plant at that time but, encouraged by the success, also was later to seek to enlarge its facility in order to practically double its capacity. And, shortly after the contract herein was executed, other industrial concerns, as we have observed, had undertaken the construction of reprocessing facilities for the purpose of disposing of spent fuel discharged by the private electric utility nuclear plants. Reprocessing of spent fuel appeared both practical and available up to 1970, with a bright and seemingly assured promise of additional commercial reprocessing facilities in the future. By the early 70’s, however, a disturbing cloud on this promising picture of available commercial reprocessing facilities was evident, caused as it was by a rising crescendo of environmental complaints charging that the plutonium in such fuel presented an intolerable risk to health and safety requiring additional stringent regulations, if not complete discontinuance of reprocessing at all. These complaints by environmentalists rested to some extent on the procedural requirements of an environmental impact statement prior to any licensing of any nuclear power plants or any addition to it under the National Environmental Policy Act of 1969 (NEPA). The environmental complaints against the reprocessing of spent fuel and particularly the presence of plutonium in spent fuel, became from that point a recurrent assault on any licensing of reprocessing facilities and the operation of existing facilities. As one commentator has accurately put it, many of these assaults were intended for “delay” rather than for asserting “any substantive legal challenge.” Note, The Use of Generic Rulemaking to Resolve Environmental Issues in Nuclear Power Plant Licensing, 61 Va.L.Rev. 869, 878 (1975). If so, the complaints accomplished their purposes. To resolve these complaints and to avoid costly delays, both the Commission and the contractors took steps to meet the objections by changing to some extent their operations. All of these developments increased substantially the cost of construction of reprocessing facilities and of their operations. The effect of these developments was evident in AGNS’s statement of its objection to signing a contract with Westinghouse to reprocess the spent fuel of the Turkey Point plants because, as it said, since its earlier letter of intent, costs of reprocessing had increased “fourfold.” At the same time but without abandoning its policy of recommending reprocessing as the appropriate method for disposing of spent fuel, the Commission, which had in effect abandoned reprocessing for these commercial nuclear power plants, sought, as we have already observed, to test, on an experimental basis, storage as a practical alternative for the disposal of such spent fuel. But as Congress was later to observe, the project was quickly abandoned, a victim of public objections and complaints. By 1972, there were proceedings pending before the Commission to undertake different steps in the plutonium recycle process. These proceedings were described as follows: “Nuclear Fuel Services [for instance had] applied for permission to alter and expand its existing plant; Allied-General Nuclear Services [sought] licensing of proposed separations and uranium conversion facilities presently under construction at Barnwell, South Carolina; and Westinghouse Electric Corporation [had] applied for a license to undertake mixed oxide fuel fabrication at a proposed plant near Anderson, South Carolina.” See Natural Resources, 539 F.2d at 832. Certain environmental groups and the State of New York had intervened in these proceedings and raised strong objections to the granting of the petitions on environmental grounds. As a result of these and other objections, the Commission, which had the responsibility of addressing environmental concerns at the licensing stage of any proceedings before it, instituted in 1972 an informal “generic” rulemaking proceeding primarily for the purpose of considering and settling in one proceeding a number of issues of fact or policy common to the large number of licensing proceedings then before the Commission. This proceeding was intended to dispose of long-term “generic” waste disposal environmental concerns for all pending proceedings in one administrative process. All the pending license proceedings were accordingly brought within this broad generic proceeding. In February 1974, the Commission announced, as a step in that proceeding, “that a generic environmental impact statement” (GESMO) would be prepared examining such essential issues as nation-wide environmental effects, safeguards against adverse effects, and alternatives to the recycle activities. In a later “provisional” decision in this “generic” rulemaking proceeding, issued in 1975, the Commission suggested a ban on any licensing of reprocessing facilities or spent fuel transportation until the final GESMO report. When this “provisional” decision was publicized, the nuclear industry protested the terms of the decision, claiming it would impose excessive costs in purchases of additional enriched uranium and in meeting the costs of spent fuel disposal. The Commission responded to these complaints by issuing its final decision in November 1975, in which it provided that “certain interim commercial licensing [of reprocessing] should be allowed” and that a “final version of the GESMO study, both in environmental concerns and safeguards ... be issued in 1976.” This order of the Commission was reviewed by the Second Circuit in accordance with the review procedure set forth in the Act, on petition of the environmental groups. The result of such review was the decision in Natural Resources Defense Council v. U.S. Nuclear Reg. Comm’n, 539 F.2d 824. The Court held that the Commission could not grant licenses for reprocessing facilities or for the transportation of plutonium and uranium mixed oxide fuel “until the GESMO Report and supplement had been issued in final form and the Commission had made its final decision thereon.” The Court, however, affirmed the procedural guidelines developed by the Commission in its decision for further proceedings in this case. Certiorari was sought in Natural Resources, 430 U.S. 944, 97 S.Ct. 1578, 51 L.Ed.2d 791 (1977), but in October 1976, two months after the decision, President Carter issued a policy statement urging temporary deferral of reprocessing. Previously, in 1971, NFS, discouraged by the delays in acting on its request for authority to increase its reprocessing facilities and doubtful that it could operate under the increasing restraints imposed, abandoned its application and operations. All other applications for the construction of reprocessing facilities were tied up in what seemed to be interminable dilatory proceedings. As we have said, the Government had abandoned its policy of accepting spent fuel from the commercial nuclear power plants for reprocessing. By that time there were no reprocessing facilities available anywhere for spent fuel discharged by private nuclear power plants. This was the situation which forced Westinghouse to advise Florida it could not carry out its contract to remove and dispose of the Turkey Point spent fuel. In November of 1976, two operators of nuclear electric generating plants, facing the same dilemma as Florida, filed applications for an amendment of their licenses to operate in order to increase their capacity for on-site storage of spent fuel as the only immediate method of disposing of spent fuel on an interim basis. The proposed increases “contemplated [in the petition as filed] no increase in the physical dimensions [of the pools for on-site storage], but rather the installation of new racks that would permit closer spacing of the fuel assemblies in the pool.” Both of the petitions were predicated on the absence, after the decision by the Second Circuit, of any available method for reprocessing or storage of such spent fuel and the imminent necessary discontinuance of operations at the plants unless additional on-site storage were permitted until the Government provided a new means of disposal. In reviewing orders issued in connection with those petitions the Court in Minnesota said: “No one disputes that solutions to the commercial waste dilemma are not currently available.” Minnesota v. U.S. Nuclear Regulatory Comm’n, 602 F.2d 412, 416 (D.C.Cir.1979). The results of these proceedings were orders authorizing reracking on-site by commercial nuclear plants. See, 1982 U.S.Code Cong. & Admin.News, 3803. At this point in the controversy on how to deal with the spent fuel, President Carter announced that “spent fuel reprocessing and the development of advanced plutonium non-based reactors would be indefinitely deferred in this country.” President Carter in the same announcement told “the domestic nuclear industry that the Federal government would provide interim storage for utilities’ spent fuel,” 1982 U.S.Code Cong. & Admin.News, 3794. President Carter’s administration was, however, unable to obtain authority to provide such interim storage from Congress, and no storage facilities for spent fuel were either planned or constructed in accordance with President Carter’s official announcement. In October 1977, the Department of Energy announced its “New Spent Fuel Policy” inplementing President Carter’s April 1977 announcement of the indefinite suspension of “civilian reprocessing of spent nuclear fuel in order to evaluate alternative fuel cycles and processes which may reduce the risk of nuclear weapons proliferation.” It described this action as “a logical extension ... of the long-established Federal responsibility for permanent disposal of high-level wastes.” It stated a policy of planning permanent storage, backed up by interim storage by private interests whom the Government might interest in establishing such interim storage facilities. The immediate payment of a future-calculated storage fee should be required, and on payment of that fee, the Government would take full title to the spent fuel. The Department, however, added, that, “[(Questions surrounding the permanent disposition of nuclear wastes have not yet been resolved.” The Department’s announcement included this language: “If, at some time in the future, the U.S. should decide that commercial reprocessing or other energy recovery methods for spent fuel can be accomplished economically and without serious proliferation risks, the spent fuel [can] either be returned with an appropriate storage charge refund, or compensation could be provided for the net fuel value.” Comments were later invited from the nuclear utility industry. In reporting the response of the utilities, the Department observed that: “Almost unanimously the utilities voiced their concern with the policy of deferral of reprocessing. ... Virtually everybody desired recognition of the future value of the recovered fuel. This relates in part to the virtually unanimous position on reprocessing as desirable.” The Nuclear Regulatory Commission issued a “Memorandum of Decision” on December 23, 1977, after the above announcement and comments. In this Memorandum it decided to terminate the GESMO proceeding and proceedings “on pending or future plutonium recycle-related license applications” with some limited exceptions not relevant here. In October 1981, President Reagan, however, shifted ground and issued a “Series of Policy Initiatives” in this area. In this Statement, the President expressed the need to develop a commercial nuclear power industry. He recognized the problem of “commercial waste disposal” and, in order to assist in removing the handicaps to the solution of such problem, President Reagan lifted “the indefinite ban which previous administrations placed on commercial reprocessing facilities in the United States.” He added: “[W]e will pursue consistent, long-term policies concerning reprocessing of spent fuel from nuclear power reactors and eliminate regulatory impediments to commercial interest in this technology, while insuring adequate safeguards.” The importance of having “the private sector take the lead in developing commercial reprocessing services” was reiterated. That Government had failed in meeting “its responsibilities” in this area was accepted in the Statement. 17 Weekly Comp. of Pres. Doc., 1101-02 (October 12, 1981). At this point Congress realized that “[failures in the Federal repository development program, the collapse of the domestic spent fuel reprocessing industry and quickly deteriorating public confidence in our ability to deal safely with nuclear waste, together with other critical safety and economic issues, were seriously undermining the strength of the domestic nuclear industry” and that “[n]uclear waste management was on its way to becoming a top Federal energy priority.” 1982 U.S. Code Cong. & Admin.News, 3794-95. This realization was the catalyst for the enactment of Nuclear Waste Policy Act (NWPA) of 1982, 42 U.S.C. § 10101 et seq. (1983). This Act of 1982 provided for the expeditious development of permanent, deep repositories for nuclear waste. While these depositories were being developed, Congress anticipated that, by increased reracking, on-site storage for spent fuel could be assured for the operating plants, with the proviso that, in those special cases when the Commission should find that there were not on-site facilities for storage of spent fuel in the interim before the completion of the permanent depositories, the Department of Energy would offer interim storage for such fuel until such permanent depositories were completed. All utilities using nuclear fuel were required to enter into a negotiated contract for the payment of a fee to the Department of Energy for such future storage to be available after the Government had constructed permanent storage facilities. The Congress contemplated that the costs of disposal of spent nuclear fuel should be paid by those ratepayers who receive the benefit of the lower cost of nuclear-generated electric power. The reason for this was stated in the Senate Report on the 1980 Act. See 1980 U.S.Code Cong. & Admin.News, 6941: Congress finds that the responsibility for both the storage and disposal of nuclear waste rests with the Federal Government and that the costs associated with such storage and disposal should, to the greatest extent possible, be borne by the direct beneficiaries of nuclear activities. Actually, President Carter had “emphasized [at the time that he proposed in 1977 the development of permanent storage] that all costs of storage and permanent disposal will be borne through fees paid by the direct users of the facilities and will ultimately be borne by those who benefit from the activities generating the waste.” And, at the instance of Florida, the Florida Public Service Commission had agreed in principle with this proposition holding that the ratepayers receiving the benefit of the nuclear fuel should pay the costs of permanent disposal of the spent fuel and had agreed that Florida could make provision for the collection of these charges in its rate base. It is true that the Commission did note that there was a controversy between Florida and its “vendors” over certain parts of this cost and it reserved determination on this part of the costs. Despite the strong words and the confident assertions reflected in the Report on NWPA, the Department of Energy has failed five years later to identify a site for the permanent storage of spent fuel discharged by the private nuclear generating plants. When such sites will finally be located remains indefinite and speculative. In any event, this record of Government activity in the development of commercial nuclear power generation, it would seem, has created a situation recognized by the Court in Minnesota v. U.S. Nuclear Regulatory Comm’n, 602 F.2d at 416, to be “undisputed” that since 1972 there have been not only no available reprocessing facilities to dispose of spent fuel from the Turkey Point plants but also there has been no available alternative off-site storage facilities for such disposal. When there will be any facility for the disposal of such spent fuel remains uncertain to this day. It is interesting that, although reprocessing has been stymied, reliance on reprocessing in disposing of the spent fuel is still considered as possible at some point in the Government’s disposal program. This is evident from the language in the Congressional Reports on the Low-Level Radioactive Waste Policy Act of 1980. The Congress said the bill was “neutral with respect to the option for further processing of the spent fuel or the high-level waste” (p. 6937) and referred to the continuance of rights of the nuclear plant to the residual value of the spent fuel taken by the Government from the plant should reprocessing of such fuel be later available. Such was the record of Governmental activity in promoting the commercial use of atomic energy in the generation of electric power. This record is an integral part of the proceedings herein and was in large part the basis for many of the findings of fact and conclusions stated by the district court in its opinions herein. We, therefore, turn now to the opinions of the district court. III. Over a period of almost four years, the district court filed three opinions in disposing of the issues in this case. In all the opinions it was accepted that Westinghouse had not performed its agreement to dispose of the spent fuel discharged by the Turkey Point reactors for the first ten years of the reactors’ operations. The dispute between the parties, therefore, centered on the issue whether such non-performance was excusable under the facts of the ease. Admittedly, the opinions are not entirely consistent in their resolution of this issue; in fact the opinions admit the inconsistency as between the second opinion, on the one hand, and first and third, on the other. For a full understanding of the district court’s findings and reasoning in these several opinions, it is necessary to review them separately. We begin our review with the first opinion, entered on June 25, 1981, and reported in 517 F.Supp. 440. A. District Court’s First Opinion In this initial opinion, the district court treated all the pleas in excuse filed by Westinghouse and found them inadequate to excuse performance by Westinghouse of its obligation to dispose of the spent fuel. The primary emphasis of this opinion, however, was on Westinghouse’s plea of excuse because of impossibility of performance, though, as we have said, it considered and dealt with the other defenses in its opinion. The district court justified its primary emphasis on impossibility, observing that all the defenses were related to impossibility and rested on the same factual assumptions as that defense. Since in our opinion the resolution of the defense of impossibility of performance may well resolve the issue, we confine our review of the first opinion to its treatment of that plea. Actually, this seems to have been the later treatment of the case by the district court, since its second and third opinions deal almost exclusively with the impossibility defense. Any analysis of the district court’s first opinion must begin with a statement of the doctrine of impossibility of performance as a defense to a breach of contract suit as enunciated in the opinion by the district court. Looking to the doctrine as stated in the older traditional version of impossibility, as phrased in Texas Co. v. Hogarth Shipping Co., 256 U.S. 619, 629, 41 S.Ct. 612, 614, 65 L.Ed. 1123 (1921), and the modern, more liberal doctrine of commercial impracticability, as stated in Transatlantic Financing Corp. v. United States, 363 F.2d 312, 315 (D.C.Cir.1966), the district court summarized the current statement of this doctrine of impossibility or impracticability of performance and defense to a breach of contract to be as follows: When the contracting parties contract in contemplation of the existence of “some particular thing essential to its performance” and “before the time of performance and without the fault of either party the particular thing ceases to exist or be available for the purpose,” the promisor will be excused from performance, irrespective of whether the existence of the thing was stated as a condition of the contract or not. Under those circumstances performance has become in the words of Eastern Air Lines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957, 991 (5th Cir.1976), “so vitally different from what was anticipated [by the parties] that the contract cannot reasonably be thought to govern.” To this statement of the doctrine, the district court added two subsidiary principles applicable to the invocation of the doctrine. In the first of these the district court drew a distinction between the situations where the means of performance was specified in the contract and the situations where the means of performance, though clearly contemplated by the parties, was not specified in the contract. In the former situation, impracticability of performance under the specified means excused performance; in the latter situation, the impracticability of performance by the concededly contemplated means will not excuse performance if there is available a reasonable alternative means of performance that can be utilized without excessive costs. The district court found warrant for these additions in the rulings in Transatlantic Financing Corp. v. United States, 363 F.2d 312, 315 (D.C.Cir.1966), and in American Trading and Production Corp. v. Shell International Marine, Ltd., 453 F.2d 939, 941 (2d Cir.1972). The other addition the district court made in the application of the doctrine is deduced from the decision in United States v. Wegematic Corp., 360 F.2d 674 (2d Cir.1966). As the district court construed that decision, it held that if “the promisor entered [into] the contract knowing that the technology [or means of performance] it intended to use was uncertain and that difficulties and added expense might occur, ... [in that situation] the risk of such difficulties was implicitly allocated to the [promisor].” The district court concluded that the application of this defense of impossibility or impracticability of performance, as deduced by it from the authorities cited, raised four factual questions which it phrased as: (1) Was performance as agreed rendered impracticable? (2) Did the claimed impracticability arise from an unforeseen contingency? (3) Was the non-occurrence of the contingency a basic assumption of the contract? (4) Did the parties, explicitly or implicitly, allocate the risk that the contingency would occur? The district court resolved all those factual questions against the defendant and, therefore, dismissed Westinghouse’s defense of impossibility or impracticability of performance. The district court said, in answer to the first question, that performance as agreed had not become impracticable. In reaching this conclusion, it cited Transatlantic Financing and American Trading, both of which involved sea-carriage contracts for transportation of cargo originally intended to move through the Suez Canal but which, as a result of the closing of that Canal during the Israeli-Egyptian War, was forced to move through the longer and more expensive Cape of Good Hope route. The carrier sought payment for the excessive costs of the longer Cape of Good Hope route. The plea of impracticability was dismissed. The reasoning of the Court in both cases for such dismissal was stated in American Trading, 453 F.2d at 942: This leaves us with the question as to whether the owner was excused from performance on the theory of commercial impracticability (Restatement of Contracts § 454 (1932)). Even though the owner is not excused because of strict impossibility, it is urged that American law recognizes that performance is rendered impossible if it can only be accomplished with extreme and unreasonable difficulty, expense, injury or loss. There is no extreme or unreasonable difficulty apparent here. The alternate route taken was well recognized, and there is no claim that the vessel or the crew or the nature of the cargo made the route actually taken unreasonably difficult, dangerous or onerous. The owner’s case here essentially rests upon the element of the additional expense involved — $131,978.44. This represents an increase of less than one third over the agreed upon $417,-327.36. We find that this increase in expense is not sufficient to constitute commercial impracticability under either American or English authority. Mere increase in cost alone is not a sufficient excuse for non-performance (Restatement of Contracts § 467 (1932)). It must be an “extreme and unreasonable” expense (Restatement of Contracts § 454 (1932)). The district court found this case analogous to the situation stated by the Court in American Trading. To reach this result, it said that, while “both Westinghouse and Florida contemplated that the spent fuel would be reprocessed,” reprocessing was not “viewed as the exclusive means of performance. Indeed, reprocessing was not in actuality the contemplated ‘means’ of performance at all; it was the contemplated disposition of the spent fuel after performance.” (Court’s Italics). It then apparently assumed that there was a method of disposal of the spent fuel that provided an alternative to reprocessing and, having made that assumption, it found that, though “the additional cost of removal itself [by the alternative method] might be sufficient to constitute impracticability in another context,” Westinghouse assumed the risk that reprocessing would prove more expensive than anticipated. It added that any increased expense incurred by Westinghouse in disposing of the fuel was not “sufficient to rise to the level of impracticability.” The district court dismissed any claim that the impracticability of performance arose out of an “unforeseen occurrence” because as it said, Westinghouse knew at the time it executed the contract that “reprocessing was, at best, a highly uncertain proposition. In fact, as a practical matter, there was no such t