  United States Court of Appeals
      for the Federal Circuit
              __________________________

    KANSAS GAS AND ELECTRIC COMPANY,
   KANSAS CITY POWER & LIGHT COMPANY,
 AND KANSAS ELECTRIC POWER COOPERATIVE,
                     INC.,
             Plaintiffs-Appellants,
                           V.
                  UNITED STATES,
               Defendant-Cross Appellant.
              __________________________

                   2011-5044, -5045
              __________________________

    Appeals from the United States Court of Federal
Claims in Case No. 04-CV-099, Judge Christine O. C.
Miller.
               _________________________

                 Decided: July 12, 2012
               _________________________

   ROBERT L. SHAPIRO, Hughes Hubbard & Reed LLP, of
Washington, DC, argued for plaintiffs-appellants. With
him on the brief was DANIEL T. LLOYD.

    CHRISTOPHER J. CARNEY, Trial Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for defendant-
cross appellant. With him on the brief were TONY WEST,
KANSAS GAS & ELECTRIC CO   v. US                           2


Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, HAROLD D. LESTER, JR., Assistant Director, JAMES P.
CONNOR, JEREMIAH M. LUONGO, and LUKE A.E. PAZICKY,
Trial Attorneys. Of counsel were ANDREW V. AVERBACH
and ALAN J. LO RE. Of counsel on the brief was JANE K.
TAYLOR, Office of General Counsel, United States De-
partment of Energy, of Washington, DC.
               __________________________

  Before RADER, Chief Judge, BRYSON and LINN, Circuit
                        Judges.
    Opinion for the court filed by Chief Judge RADER.
 Opinion dissenting-in-part filed by Circuit Judge LINN.
RADER, Chief Judge.
    Kansas Gas and Electric Company (“KG&E”), Kansas
City Power & Light Company (“KCPL”), and Kansas
Electric Power Cooperative, Inc. (“KEPCO”) (collectively
“the Kansas Companies”) suffered damages due to the
Government’s partial breach of the Standard Contract for
Disposal of Spent Nuclear Fuel And/Or High-Level Ra-
dioactive Waste (“Standard Contract”). In June 2010, the
United States Court of Federal Claims conducted a nine-
day trial and awarded the Kansas Companies
$10,632,454.83.
    In determining the amount of damages, the trial court
correctly did not award damages for cost of capital and for
the costs associated with researching alternative storage
options for spent nuclear fuel (“SNF”) and high level
radioactive waste (“HLW”). The trial court also appropri-
ately reduced the Kansas Companies’ damages by the
value of the benefit they received as a result of their
mitigation activities. However, the trial court erred by
not accepting the Kansas Companies’ reasonable method
for calculating overhead costs. Therefore, this court
3                            KANSAS GAS & ELECTRIC CO   v. US


affirms-in-part and reverses-in-part the trial court’s
damages award.
                             I.
    In 1983, Congress enacted the Nuclear Waste Policy
Act of 1982 (“NWPA”). Pub. L. No. 97-425, 96 Stat. 2201
(codified at 42 U.S.C. §§ 10101–10270 (2006)). The
NWPA authorized the Department of Energy (“DOE”) to
enter into contracts for the collection and disposal of SNF
and HWL. 42 U.S.C. § 10222(a)(1). The Standard Con-
tract required the owners of SNF and HLW to pay fees
into the Nuclear Waste Fund, in exchange for which the
DOE would begin to dispose of the SNF and HLW “not
later than January 31, 1998.” 42 U.S.C. § 10222(a)(5)(B);
10 C.F.R. § 961.11 (2011).
    On October 10, 1984, the Kansas Companies entered
into the Standard Contract with DOE. Kan. Gas & Elec.
Co. v. United States, 95 Fed. Cl. 257, 260 (2010) (“KG &
E”). The Kansas Companies collectively own Wolf Creek
Nuclear Operating Corp., which operates the Wolf Creek
Generating Station (“Wolf Creek”), a nuclear power plant
located near Burlington, Kansas. Id. at 262. Wolf Creek’s
nuclear reactor initially operated with 193 fuel assem-
blies. Id. When fuel assemblies no longer efficiently
generate energy, the plant is refueled. The refueling
process removes the spent fuel assemblies from the reac-
tor core and places them into storage cells in racks located
in Wolf Creek’s spent fuel pool. The parties refer to this
storage option as “wet storage.” Id.
    While Government performance should have begun in
1998, not all utilities would have expected recovery of
their spent fuel at this time. See Yankee Atomic Elec. Co.
v. United States, 536 F.3d 1268, 1272–73 (Fed. Cir. 2008)
(explaining the role of the Standard Contract acceptance
rate). In this case, the record shows that the Govern-
KANSAS GAS & ELECTRIC CO   v. US                             4


ment’s first scheduled collection of Wolf Creek’s SNF
would have been in 2006. KG & E, 95 Fed. Cl. at 260.
    As early as 1993, the Kansas Companies anticipated
they would need to pursue alternative storage options for
Wolf Creek if DOE declined to accept spent fuel by 1998.
Id. at 264. The Kansas Companies tasked Mr. Matthew
K. Morris, the nuclear engineer responsible for adminis-
tering the Standard Contract at Wolf Creek, with explor-
ing options to create more available space in Wolf Creek’s
spent fuel pool. Id. Wolf Creek’s Principal Engineer for
Nuclear Fuels, Mr. Scott Ferguson, also researched addi-
tional storage options. Id. at 261, 296.
    The Kansas Companies concluded their spent fuel
storage study in 1995. The report evaluated six options:
(1) plant operations/fuel design; (2) increased in-pool
storage; (3) dry storage technologies; (4) shipment to
private interim storage facilities; (5) shipment to a federal
facility; and (6), combinations of the first five alternatives.
Id. at 264. The report concluded that the best three
options were reracking the storage pool, dry cask storage,
or a combination of the two. Id. at 266.
     The Kansas Companies ultimately decided to rerack
the storage pool. Id. Under this option, they removed the
existing racks from the pool, replaced them with higher
density racks, and placed them closer together while still
maintaining sufficient cooling flow. Id. The Kansas
Companies installed the racks with the help of a contrac-
tor, Holtec International.
    While conducting the rerack, the Kansas Companies
both increased their storage capacity and used racks that
could support higher enrichment fuel assemblies. Joint
App. at 120; 311; 638-39. These higher enrichment fuel
assemblies allowed Wolf Creek to achieve the same en-
ergy output from the reactor with fewer fuel assemblies.
5                           KANSAS GAS & ELECTRIC CO   v. US


This reduced the number of assemblies purchased and
discharged. Id. at 122. The rerack project was completed
in the spring of 2000. KG & E, 95 Fed. Cl. at 268.
    Of course, the Government did not proceed to collect
and dispose of SNF and HLW on January 31, 1998. This
court has previously held that the Government thus
partially breached the Standard Contract with the nu-
clear energy industry. See N. States Power Co. v. United
States, 224 F.3d 1361, 1367 (Fed. Cir. 2000) and Me.
Yankee Atomic Power Co. v. United States, 225 F.3d 1336,
1343 (Fed. Cir. 2000). Therefore, the trial court in this
case focused on the quantum of damages owed to the
Kansas Companies on account of the Government’s
breach. The trial court found that even if the Government
had not breached the Standard Contract, Wolf Creek
would have run out of wet storage by 2005, “necessitating
alternative storage measures.” Id. at 278. Thus, the trial
court, in applying this court’s precedent in Yankee Atomic
Power Co. v. United States, 536 F.3d 1268 (Fed. Cir.
2008), required the Kansas Companies to both prove their
damages and show what costs, if any, they would have
experienced absent the breach. KG & E, 95 Fed. Cl. at
273–74, 277.
    The Kansas Companies presented numerous alterna-
tive storage measures they would have pursued in the
non-breach world. The trial court found that the Kansas
Companies would have pursued a low-cost measure
wherein Wolf Creek would receive credit for the soluble
boron already present in the water in the spent fuel
storage pool. Id. at 295–96. Boron is a neutron absorber
that can control the reactivity of spent fuel, and the
Nuclear Regulatory Commission had issued “criticality
credit” to several utilities for the boron present in their
pools. This credit would have allowed Wolf Creek to store
KANSAS GAS & ELECTRIC CO   v. US                            6


fuel assemblies at a greater density, thus resolving its
short-term storage issues.
    The trial court also found that the Kansas Companies
would have performed “a gate-drop analysis” in the non-
breach world. Id. at 280, 298. Due to the structure of
Wolf Creek’s pool, 18 storage cells were directly under a
large moveable gate which, if it accidently fell into the
pool, could have damaged fuel assemblies stored below.
Id. at 279-80. These storage cells could not be used
without “doing the appropriate analysis to show that, if
[the gate] was to drop, that it would not damage the fuel
causing a release.” Id. at 280. This analysis would have
occurred in the non-breach world, allowing Wolf Creek to
store fuel in these 18 cells. The trial court found such an
analysis would have cost at least $100,000. Id. at 298.
     After determining the costs in the non-breach world,
the trial court examined the Kansas Companies’ direct
costs of mitigating the Government’s breach. The trial
court awarded $9.7 million for the rerack project, “less
$100,000 in costs that [the Kansas Companies] minimally
would have incurred but for the breach . . . .” Id. The
trial court disallowed the Kansas Companies’ claim for
the costs associated with the alternative storage options
study conducted by Messrs. Morris and Ferguson. Spe-
cifically, the trial court noted that Morris and Ferguson
adequately accounted for their time in studying all op-
tions, but made “no effort . . . to apportion this time to the
rerack alternative. . . .” Id. at 297.
    The trial court also awarded overhead costs. The
Kansas Companies divided overhead into three pools of
costs: labor overhead ($160,467.99), material overhead
($260,725.47), and construction overhead ($3,420,935.18).
Id. at 298. The parties did not dispute the labor over-
head. Id. In operating Wolf Creek, the Kansas Compa-
7                            KANSAS GAS & ELECTRIC CO   v. US


nies account for overhead costs using a “total-cost alloca-
tion method.” Id. at 299. They have used this method
since 1987, and the method complies with Federal Energy
Regulatory Commission (“FERC”) regulations regarding
the allocation of costs between a particular capital project
versus the applicable overhead account. Id. at 298–99.
    The trial court concluded that the Kansas Companies’
use of total-cost accounting was reasonable for business
purposes, but stated that “what makes for good business
accounting does not translate automatically into a fair
and reasonable apportionment of damages.” Id. at 308.
The trial court found that the total-cost allocation method
included the cost of construction materials in its base
overhead rate, the inclusion of which “unreasonably
inflates the amount of construction overheads.” Id. at
309. Thus, the trial court reduced the Kansas Companies’
construction overhead award by sixty percent, or the
“approximate percentage amount of material charges
relating to the rerack project compared with the total cost
of the project.” Id. Thus, this judgment awarded the
Kansas Companies their requested labor and material
overhead costs, but only $1,368,374.07 for construction
overhead.
    Lastly, the trial court found that the Kansas Compa-
nies realized a “real world savings” due to the ability to
use higher enrichment fuel assemblies at Wolf Creek. Id.
at 310. The net effect of the rerack was a savings of at
least $800,000, and the trial court reduced the Kansas
Companies’ total award by this amount. The total award
to the Kansas Companies was $10,632,454.83.
    The Kansas Companies appeal the trial court’s reduc-
tion in damages for the supposed benefit they received
from the new fuel racks. They also appeal the trial court’s
analysis of their construction overhead costs. Lastly, they
KANSAS GAS & ELECTRIC CO   v. US                           8


appeal the trial court’s refusal to award damages for the
costs of studying alternative storage options and for their
costs of capital.
   This court has jurisdiction under 28 U.S.C. §
1295(a)(3).
                             II.
    This court reviews the factual findings of the Court of
Federal Claims for clear error, Indiana Michigan Power
Co. v. United States, 422 F.3d 1369,1373 (Fed. Cir. 2005),
including “the general types of damages awarded . . . ,
their appropriateness . . . , and rates used to calculate
them . . .,” Home Savings of America v. United States, 399
F.3d 1341, 1347 (Fed. Cir. 2005). “A finding may be held
clearly erroneous when . . . the appellate court is left with
a definite and firm conviction that a mistake has been
committed.” Ind. Mich., 422 F.3d at 1373 (quoting In re
Mark Indus., 751 F.2d 1219, 1222–23 (Fed. Cir. 1984)).
This court reviews the trial court’s legal conclusions
without deference. Yankee Atomic, 536 F.3d at 1272.
This court provides the trial court with wide discretion in
determining an appropriate quantum of damages. Hi-
Shear Tech. Corp. v. United States, 356 F.3d 1372, 1382
(Fed. Cir. 2004).
     As a general rule, “[a] non-breaching party is not enti-
tled, through the award of damages, to achieve a position
superior to the one it would reasonably have occupied had
the breach not occurred.” LaSalle Talman Bank, F.S.B.,
v. United States, 317 F.3d 1363, 1371 (Fed. Cir. 2003)
(citing 3 E. Allen Farnsworth, Farnsworth on Contracts
193 (2d ed. 1998)). See also United States v. City of Twin
Falls, 806 F.2d 862, 873–74 (9th Cir. 1986) (contract
damages to non-breaching party are reduced by gains
after breach because contract damages seek only to “fairly
compensate the injured party for his loss”); Restatement
9                            KANSAS GAS & ELECTRIC CO   v. US


(Second) of Contracts § 347 cmt. e (“The injured party is
limited to damages based on his actual loss caused by the
breach. If he makes an especially favorable substitute
transaction, so that he sustains a smaller loss than might
have been expected, his damages are reduced by the loss
avoided as a result of that transaction.”).
    Damages do not extend to remote consequences of the
breach. Similarly, mitigation efforts may result in direct
savings that reduce the damages claim. LaSalle, 317 F.3d
at 1371; Citizens Fed. Bank, FSB v. United States, 59 Fed.
Cl. 507, 526 (2003) (finding that the benefits of mitigation
must be credited to the government as the breaching
party). Thus, “where the defendant’s wrong or breach of
contract has not only caused damage, but has also con-
ferred a benefit upon plaintiff which he would not other-
wise have reaped, the value of this benefit must be
credited to defendant in assessing the damages.” LaSalle,
317 F.3d at 1372 (quoting Charles T. McCormick, Hand-
book on the Law of Damages 146 (1935)).
    The Kansas Companies claim the trial court erred in
reducing their damages by $800,000 for the benefits they
received from the rerack project, i.e., the ability to use
higher-enrichment fuel and purchase fewer fuel assem-
blies. The Kansas Companies claim that any benefit they
received was too remote and not directly related to the
breach because the decision to “pursue more highly en-
riched fresh nuclear fuel” was an “independent business
decision” and influenced by the market price of uranium
conversion, enrichment, and fabrication. Corrected Brief
for Plaintiffs-Appellants 28–30. They also argue that the
benefit was not immediate because it accrued over time as
Wolf Creek procured fresh fuel for its reactor.
    The trial court correctly reduced the Kansas Compa-
nies’ damages to account for efficiency benefits from the
KANSAS GAS & ELECTRIC CO   v. US                        10


rerack project. First, the Kansas Companies acquired
higher enrichment fuel as a direct consequence of the
decision to rerack the wet storage pool. To alter either
the storage configuration of the wet storage pool or the
enrichment levels of fuel used at Wolf Creek, the NRC
had to approve a license amendment. Joint App. at 358.
In 1998, as part of its mitigation efforts, Wolf Creek
sought NRC approval to both rerack its fuel storage pool
and to use higher enrichment fuel assemblies. See Envi-
ronmental Assessment, 63 Fed. Reg. 68,478 (Dec. 11,
1998) (“The proposed action would revise the [Wolf Creek]
technical specifications to allow an increase in the [Wolf
Creek] spent fuel pool (SFP) storage capacity and to allow
an increase in the maximum nominal fuel enrichment to
5.0 nominal weight percent U-235.”); Notice of Issuance of
Amendment, 64 Fed. Reg. 14,950 (March 29, 1999) (grant-
ing the amendment to Wolf Creek’s license).
    The Kansas Companies’ internal engineering and con-
tract documents also confirm that the purpose of the
rerack project was both to “increase Wolf Creek on-site
spent fuel storage capacity and to allow an increase in the
maximum allowable nominal fuel enrichment stored in
the spent fuel pool to 5.0 [nominal weight percent] U-
235.” Joint App. at 638–39. Indeed, Mr. Richard Muench,
former President and Chief Executive Officer of Wolf
Creek, testified that the Kansas Companies conducted an
evaluation to show it was more economical to switch to
higher enrichment fuel, and that they took “the opportu-
nity to go to the higher enrichment at the same time we
were switching our racks.” Id. at 310–11 (emphasis
added). Thus the record shows that the decision to pursue
higher enrichment fuel assemblies was not an independ-
ent business decision but part and parcel of the Kansas
Companies’ mitigation efforts.
11                          KANSAS GAS & ELECTRIC CO   v. US


    The record also shows that the higher enrichment fuel
assemblies produced a real-world benefit. Mr. Morris
testified that the new racks allowed Wolf Creek to use
higher enrichment fuel assemblies and thus to purchase
fewer assemblies. KG & E, 95 Fed. Cl. at 310; Joint App.
at 122. Mr. Muench confirmed that the net effect of
switching Wolf Creek to higher enrichment fuel was a
savings of “hundreds of thousands of dollars per cycle,”
and that at least four fuel cycles had occurred since
mitigation. KG & E, 95 Fed. Cl. at 310; Joint App. at 311.
The trial court found that this constituted a “real-world
savings,” and accordingly reduced the damages. This
court does not lightly disturb such a factual finding. Cf.
Citizens Bank v. United States, 66 Fed. Cl. 179, 204 (2005)
(denying the government’s request to reduce damages in a
Winstar case because, while the government was entitled
to reduction in damages for any benefit obtained through
the breach as a matter of law, the thrift “did not in fact
realize any of these benefits”).
    The Kansas Companies’ argue that this benefit was
too remote because it accrued over time as influenced by
market forces. As noted above, the Kansas Companies
chose at the time of the breach and mitigation to pursue
higher enrichment fuel assemblies. The long-term benefit
of fuel cost savings does not sever its connection to the
Kansas Companies’ mitigation efforts.
    This court upheld a similar damages determination in
LaSalle Talman Bank, a Winstar case. Talman Bank, in
mitigation of the Government’s breach of contract, re-
ceived a cash infusion of $300 million. Because the cash
infusion was a direct result of the Government’s breach,
this court upheld a reduction in damages to account for
benefits arising from the infusion. 317 F.3d at 1373–74.
Ultimately, the benefit was calculated as the earnings
generated by the $300 million cash infusion from 1992
KANSAS GAS & ELECTRIC CO   v. US                           12


(the date of mitigation) to 2003. LaSalle Talman Bank,
F.S.B., v. United States, 64 Fed. Cl. 90, 112-13 (2005),
aff’d, 462 F.3d 1331 (Fed. Cir. 2006). This court did not
change that reduction even though the plaintiff’s earnings
resulted from uncertain market forces over time. The
same result applies in this case.
    By enhancing the racks to accommodate high-
enrichment fuel assemblies, the Kansas Companies
mitigated the Government’s breach in a way that pro-
duced a benefit. While the passage of time causes greater
realization of the benefit and market forces may influence
a future valuation of the benefit, the Kansas Companies
have, as of the time of this litigation, received a benefit as
a direct result of their mitigation activity. Thus, the trial
court correctly reduced the Kansas Companies’ damages
by the amount of the benefit received in mitigating the
Government’s partial breach of the Standard Contract.
    This court’s precedent in Dominion Resources, Inc. v.
United States, 641 F.3d 1359 (Fed. Cir. 2011) does not
alter this decision. In Dominion, the government asserted
that because “Dominion’s one-time [disposal] fee was not
yet payable because of the government’s breach, Domin-
ion may have profited by having use of the money in the
meantime.” Id. at 1364. This court affirmed the trial
court and refused to allow the government to question
whether Dominion received a benefit, but it did so as a
matter of contractual interpretation. Id. at 1364–65. The
Standard Contract provides options for the payment of
the fee and expressly states that if the utility chooses to
wait to pay the fee, interest is to be calculated “from April
7, 1983, to the date of the payment based upon the 13-
week Treasury bill rate.” Id. at 1364. Because the parties
agreed ex ante to a one-time fee with interest at the
thirteen-week Treasury bill rate, Dominion could not “ask
for increased damages should its investment of the one-
13                           KANSAS GAS & ELECTRIC CO   v. US


time fee return less than the thirteen-week rate, and the
government [could not] ask for a reduction in damages
should Dominion’s investments return more.” Id. at 1365.
This case does not feature the contractual concerns that
governed the Dominion case.
                            III.
    The Kansas Companies incurred overhead costs when
managing their rerack operations to mitigate the breach.
The Kansas Companies maintain an accounting system
which tracks and apportions all overhead costs. The
accounting system, termed “a total-cost allocation meth-
odology,” uses a two-step process to determine the per-
centage overhead rate.
    In the first step, the capitalized administrative costs,
indirect labor costs, and labor overheads on indirect labor
for each department are split between capital projects and
plant operations based on the amount of work the de-
partment does to support each of those functions. KG &
E, 95 Fed. Cl. at 299; Joint App. at 416–17. The portion
assigned to capital projects is called the “available to
allocate pool.” For example, the Kansas Companies’
accounting department allocated 6% of the CEO’s time
towards construction projects, and 94% of his time to
plant operations. Joint App. at 418. Thus, 6% of the
CEO’s labor costs were allocated towards the plant’s total
construction overhead.
    Next, the available to allocate pool is divided by the
total costs of the planned capital projects for the year for
the capital budget. KG & E, 95 Fed. Cl. at 300. This
equation yields the construction overhead rate. The end
result of the total cost allocation method is that the larg-
est capital projects receive the largest share of the over-
head pool allocations, while smaller capital projects
receive smaller allocations. Id.
KANSAS GAS & ELECTRIC CO   v. US                         14


    The Kansas Companies make these calculations an-
nually. Joint App. at 416–17. However, throughout any
given year, these calculations are compared against
actual expenditures on direct costs to account for any
discrepancies. Review of the overhead rate occurs on at
least a quarterly basis. KG & E, 95 Fed. Cl. at 300.
    The Kansas Companies have used the “total-cost allo-
cation method” for material overhead and construction
overhead calculations since 1987. Id. at 299–300. This
accounting method complies with FERC accounting
regulations. FERC requires that all major electric utili-
ties meet certain accounting standards called the Uniform
System of Accounts. See 18 C.F.R. § 101 (2012). The
standards require utilities to use an accounting system
that properly measures, inter alia, direct and indirect
overhead construction costs. Id. The records must “be so
kept as to show the total amount of each overhead for
each year, the nature and amount of each overhead
expenditure charged to each construction work order and
to each electric plant account, and the bases of distribu-
tion of such costs.” Id. In this case, the record shows that
the Kansas Companies’ cost accounting method complied
with FERC regulations. KG & E, 95 Fed. Cl. at 298.
    As explained in Indiana Michigan, “damages for
breach of contract are recoverable where: (1) the damages
were reasonably foreseeable by the breaching party at the
time of contracting; (2) the breach is a substantial causal
factor in the damages; and (3) the damages are shown
with reasonable certainty.” 422 F.3d at 1373 (citing
Energy Capital Corp. v. United States, 302 F.3d 1314,
1320 (Fed. Cir. 2002)). Once a company has proved that
certain work was undertaken because of the breach, it
may proceed to prove the amount of the associated cost
(including both direct and indirect costs) by any available
and reasonable technique. Energy Nw. v. United States,
15                          KANSAS GAS & ELECTRIC CO   v. US


641 F.3d 1300, 1309 (Fed. Cir. 2011). These reasonable
techniques need not prove damages with Cartesian cer-
tainty. Id. (citing Ferguson Beauregard/Logic Controls v.
Mega Sys., LLC, 350 F.3d 1327, 1345 (Fed. Cir. 2003)).
    This court upholds an internal accounting system as
showing overhead costs with reasonable certainty when it
allocates a portion of the expenses to a particular project
using codes, Carolina Power & Light Co. v. United States,
573 F.3d 1271, 1276-77 (Fed. Cir. 2009), when it allocates
according to accepted accounting principles, Energy Nw.,
641 F.3d at 1309, and when it allocates with accounting
procedures that comply with mandatory FERC regula-
tions, System Fuels, Inc. v. United States, 666 F.3d 1306,
1311-12 (Fed. Cir. 2012). See also, Vt. Yankee Nuclear
Power Corp. v. Entergy Nuclear Vt. Yankee, --- F.3d ----,
2012 WL 2126813, at *15–16 (Fed. Cir., June 13, 2012)
(reversing the Court of Federal Claims when it denied
damages for overhead costs despite acknowledging that
the utility’s accounting practices followed GAAP and
FERC regulations); Consolidated Edison Co. of N.Y., Inc.
v. Entergy Nuclear Indian Point 2, LLC, 676 F.3d 1331,
2012 WL 1284402, at *7–8 (Fed. Cir. 2012) (reversing the
Court of Federal Claims’ denial of damages for overhead
costs when the utility proved the costs with a separate
accounting system compliant with FERC regulations).
     This case bears strikingly similarity to System Fuels
and Consolidated Edison. In each of these cases, the
utilities in question maintained a separate accounting
system to allocate overhead costs, and these accounting
methods were compliant with FERC regulations and
generally accepted accounting principles (“GAAP”).
Consolidated Edison, 2012 WL 1284402, at *7; Sys. Fuels,
666 F.3d at 1311. In each of these cases, the trial court
found that the method employed by the utilities was
“imprecise,” resulting in inflated overhead costs, and it
KANSAS GAS & ELECTRIC CO   v. US                          16


denied portions of the utilities’ overhead costs as a result.
In each of these cases, this court reversed the trial court,
holding that where the utilities used accounting proce-
dures as mandated by FERC and consistent with GAAP,
the utilities’ accounting records sufficiently demonstrated
damages with reasonable particularity. Consolidated
Edison, 2012 WL 1284402, at *7; Sys. Fuels, 666 F.3d at
1312.
    In light of this record, the trial court erred by denying
the Kansas Companies a portion of their overhead dam-
ages calculated via the total-cost allocation method. The
Kansas Companies used an internal accounting system
which coded costs to specific projects, the allocation rates
were re-examined on a regular basis in order to reflect
actual capital project costs, and the total-cost allocation
method complied with required FERC accounting regula-
tions. The trial court explicitly recognized that the total-
cost allocation method was a “reasonable” technique,
stating: “the court has no quarrel with [the Plaintiffs’
damages expert’s] characterization of Wolf Creek’s use of
the total-cost method as a reasonable form of cost ac-
counting for business purposes. The fact that Wolf Creek
has used this method since 1987 confirms this point.” KG
& E, 95 Fed. Cl. at 308. Therefore, this court reverses the
trial court’s denial of damages for overhead costs calcu-
lated via the total-cost allocation method as inconsistent
with precedent and the record.
                             IV.
    The Kansas Companies also appeal the trial court’s
denial of damages for the costs of a report authored by
Messrs. Morris and Ferguson. The report, begun in 1994,
analyzed nearly two dozen spent fuel storage options.
Joint App. at 101, 364, 597. While the total hours spent
by Messrs. Morris and Ferguson in preparing the report
17                           KANSAS GAS & ELECTRIC CO   v. US


were adequately accounted for, the trial court stated that
“[b]ecause no effort was made to apportion this time to
the rerack alternatives, the court disallows the additional
Morris and Ferguson labor.” KG & E, 94 Fed. Cl. at 297.
    Viewing the record as a whole, this court notes that
the trial court found, and the Kansas Companies have not
challenged, that the first scheduled collection of Wolf
Creek’s spent fuel in the non-breach world would have
occurred in 2006. Id. at 278. But, as the trial court also
found, “2006 would have been one year too late for Wolf
Creek; by spring 2005, accumulating SNF would have
overcome Wolf Creek’s dwindling available storage,
necessitating alternative storage measures.” Id. The
trial court concluded that, after reviewing its options,
Wolf Creek most likely would have pursued using soluble
boron to lower the reactivity of the storage pool, thus
mitigating its dwindling storage capacity.
    Thus, the record shows that Wolf Creek would have
had to pursue alternative storage measures in both the
breach and non-breach worlds. In other words, it would
have needed similar research in both worlds to determine
future options. The trial court denied breach world dam-
ages for the costs of such research “[b]ecause no effort was
made to apportion this time to the rerack alternatives . . .
.” Id. at 297. In other words, the Kansas Companies did
not meet their burden of proving any overlap between the
costs of studying alternative storage options in the breach
versus the non-breach worlds. Without record evidence
about the research costs in both worlds, the trial court
could not perform the necessary comparison between the
breach and non-breach worlds and thus could not accu-
rately assess the damages. See Yankee Atomic Elec. Co.,
526 F.3d at 1273; Glendale Fed. Bank, FSB v. United
States, 239 F.3d 1374, 1380 (Fed. Cir. 2001) (instructing
that plaintiffs bear the burden of demonstrating “what
KANSAS GAS & ELECTRIC CO   v. US                          18


might have been”); Bluebonnet Sav. Bank FSB v. United
States, 67 Fed. Cl. 231, 238 (2005) (“[B]ecause plaintiffs in
this case are seeking expectancy damages, it is incumbent
upon them to establish a plausible ‘but-for’ world.”).
Thus, the Court of Federal Claims did not err in disallow-
ing damages for the spent fuel storage study.
                             V.
    The Kansas Companies also appeal the trial court’s
denial of damages for the cost of capital to fund its mitiga-
tion activities. The utilities seek to recover $466,977 in
cost-of-capital damages for the financing of the breach-
related projects.
    In Energy Northwest, this court held that the no-
interest rule barred parties to the Standard Contract from
recovering the costs of financing mitigation projects. 641
F.3d at 1310–13 (citing 28 U.S.C. § 2516(a)); see also Sys.
Fuels, 666 F.3d at 1310–11. In Boston Edison Co. v.
Untied States, the court held that the “commercial enter-
prise exception” to the no-interest rule did not apply in
the context of the NWPA. 658 F.3d 1361, 1371 (Fed. Cir.
2011). Consistent with these decisions, this court affirms
the trial court’s denial of the Kansas Companies’ cost of
capital claims.
                             VI.
    The Kansas Companies’ method for calculating over-
head costs was reasonable and complied with FERC
accounting standards. As such, this court reverses the
trial court’s refusal to accept these calculations. This
court affirms the remainder of the trial court’s decision.
As such, there is no need to address the issues raised in
the Government’s cross-appeal.
19                            KANSAS GAS & ELECTRIC CO   v. US


 AFFIRMED-IN-PART AND REVERSED-IN-PART


                           COSTS
     Costs to Plaintiffs-Appellants.
  United States Court of Appeals
      for the Federal Circuit
               __________________________

    KANSAS GAS AND ELECTRIC COMPANY,
   KANSAS CITY POWER & LIGHT COMPANY,
 AND KANSAS ELECTRIC POWER COOPERATIVE,
                     INC.,
             Plaintiffs-Appellants,
                            v.
                  UNITED STATES,
               Defendant-Cross Appellant.
               __________________________

                    2011-5044, -5045
               __________________________

    Appeals from the United States Court of Federal
Claims In No. 04-CV-099, Judge Christine O.C. Miller.
               __________________________

LINN, Circuit Judge, dissenting in part.
    The majority concludes that when the Kansas Com-
panies used Federal Energy Regulatory Commission
(“FERC”)-compliant accounting practices to allocate
overhead to their mitigation efforts, they were disposi-
tively entitled to recover the full amount of that overhead
as damages. I respectfully disagree. When, as here, a
trial court is presented with evidence that regulatory-
accounting practices were used to calculate the amount of
overhead attributable to mitigation projects, that amount
is presumptively a correct measure of damages for over-
head. And our precedent firmly establishes that a trial
2                             KANSAS GAS & ELECTRIC CO   v. US

court is not free to disregard it simply because it ques-
tions the precision of the accepted accounting practice.
But the fact that a regulatory-compliant accounting
practice is followed should not prevent a trial court from
considering other record evidence showing that the
amount claimed as damages based on such accounting
practice is grossly disproportionate to the actual damages
incurred. Nor does it overshadow the substantial discre-
tion a trial court enjoys in crafting its damages award or
the clear error standard of review applicable to fact ques-
tions such as this.
     Here, the United States Court of Federal Claims
(“trial court”) did not disregard evidence of accepted
accounting practices. Rather it determined, in view of the
record as a whole, that in this case such practices re-
flected an overhead amount that was a demonstrably
inaccurate reflection of the damages incurred. Rather
than simply deny overhead damages altogether, the trial
court used all of the evidence of record to craft a more
correct and therefore more reasonable award. In so doing,
the trial court carefully considered the record in general,
and the testimony of the experts in particular, in treating
as an issue of first impression the question of whether the
total-cost overhead allocation methodology provided a
correct measure of damages. Kan. Gas & Elec. Co. v.
United States, 95 Fed. Cl. 257, 307 (2010). In analyzing
this question, the trial court first observed that plaintiffs’
damages expert, Professor Jerold Zimmerman, who
testified that this methodology was reasonable and for a
“valid business purpose”:
        never asked for or was given Wolf Creek’s
        raw financial data, nor did he talk with
        Wolf Creek’s accounting personnel. . . .
        [Nor was he asked] to review whether
        Wolf Creek’s $3.7 million in claimed con-
        struction and material overheads derived
        from the correct measure of damages. Tr.
KANSAS GAS & ELECTRIC CO   v. US                        3
       at 1865. In fact, Prof. Zimmerman admit-
       ted that he was not “charge[d]” with “opin-
       ing on the numbers” . . . . Tr. at 1883
       (“Well I didn’t have to [review Wolf
       Creek’s raw financial data] to assess the
       logical flaws in [defendant’s expert,] Mr.
       Johnson’s report. Since I wasn’t opining
       on the numbers, one can look at the logical
       analysis and say whether the logic is cor-
       rect without actually looking and testing
       the numbers.”).
Id. The trial court also looked to the testimony of defen-
dant’s expert, R. Larry Johnson, and noted:
       Mr. Johnson testified that the total-cost
       method is not widely used in the cost ac-
       counting community. Tr. at 1705-06 (cit-
       ing, inter alia, Professor Zimmerman’s
       cost accounting textbook analysis of a sur-
       vey of allocation methodologies using 293
       respondents in which total-cost method
       does not appear). . . . Mr. Johnson analo-
       gized how the total-cost method creates
       disproportionate overheads to the use of
       “gold wire” rather than steel in construct-
       ing a wheel. If five different projects each
       had $100.00 in labor overhead, a total of
       $500.00 in direct labor would be allowed,
       and each project would receive a twenty
       percent (or $20.00) allocation of overhead
       based on the labor. Mr. Johnson then
       added the material costs of steel wire to
       four of the five projects costing $10.00
       each, but the fifth project used gold wire
       costing $1000.00. Because the amount of
       labor expended remains constant, the fifth
       project does not consume more overhead
       resources. However, under the total-cost
4                            KANSAS GAS & ELECTRIC CO   v. US

        allocation, four of the projects would re-
        ceive a $7.00 overhead allocation rather
        than $20.00, and the gold wire project
        would receive $72.00.
Id. at 306.
    Based on a meticulously-documented examination of
the factual record, the trial court explained that it had:
        no quarrel with [the] characterization of
        Wolf Creek’s use of the total-cost method
        as a reasonable form of cost accounting for
        business purposes. . . . However, what
        makes for good business accounting does
        not translate automatically into a fair and
        reasonable apportionment of damages. . . .
        [Rather,] the allocation method used to
        calculate these overhead amounts must
        bear some relationship to the resources
        actually expended. In cross-examining
        Mr. Robke, [who was responsible for ac-
        counting on the rerack project,] defendant
        established that the construction material
        costs—that is, the cost of the racks—bore
        no relationship to Wolf Creek’s resources
        expended on the rerack project. . . . [T]he
        exchange with Mr. Robke shows that, if
        the racks did—hypothetically—cost $12
        million rather than $6 million, the total-
        cost allocation methodology doubles the
        overhead allocated for those materials
        without any actual change in internal re-
        sources. . . .  The material cost of the
        rerack project clearly was not the driver of
        the construction overheads, and it did not
        affect the internal support provided to the
        project.
Id. at 308.
KANSAS GAS & ELECTRIC CO    v. US                            5
    The trial court thus determined “that the total-cost
method’s inclusion of the cost of construction materials in
its allocation base unreasonably inflates the amount of
construction overheads” and, on the facts found, cannot be
solely relied upon to support a reasonable damages
award. Id. at 309.
    I see no error, let alone clear error, in the trial court’s
careful treatment of the evidence in making its reason-
able damages determination. The majority points to no
clear error and, indeed, makes only passing reference to
the record in its analysis. Without addressing the expert
testimony or the trial court’s findings of fact, the majority
concludes that because “[t]he Kansas Companies used an
internal accounting system which coded costs to specific
projects, [because] the allocation rates were re-examined
on a regular basis in order to reflect actual capital project
costs, and [because] the total-cost allocation method
complied with required FERC accounting regulations” the
trial court’s “denial of damages for overhead costs . . .
[was] inconsistent with precedent and the record.” Maj.
Op. at 16. While the majority’s statements all sound
eminently reasonable, they fail to consider the real issue.
As noted above, the trial court did not take issue with the
accounting method as being reasonable, nor with the
premise that it was accurately applied. Rather, it rested
its decision on the observation that if plaintiffs were
allowed to include the cost of disproportionately expensive
materials in the total cost analysis, the government
unreasonably would be held responsible for costs that had
nothing to do with the capital project to which they had
been attributed or with the government’s breach. To this
point, the trial court quoted the testimony of Mr. Johnson,
who explained:
        Did [Wolf Creek’s] accounting department
        incur more costs because [they] bought $6
        million in casks? Did [Wolf Creek’s] hu-
        man resources department incur more
6                            KANSAS GAS & ELECTRIC CO   v. US

       costs because [they] bought $6 million in
       casks? And the answer I think to those
       things has to be “no.”
95 Fed. Cl. at 308-9. As the trial court then stated,
“Plaintiffs failed to rebut this argument.” Id. at 309.
Thus, the whole point of the trial court’s explanation is
that even assuming plaintiffs correctly used the total-cost
methodology to calculate overhead, the resulting damages
request, given the facts of this case, was simply wrong.
    The majority does not address the evidence or the
trial court’s reasoning based on the record, but instead
relies on System Fuels, Inc. v. United States, 666 F.3d
1306 (Fed. Cir. 2012), and Consolidated Edison Co. of
New York v. Entergy Nuclear Indian Point 2, LLC, 676
F.3d 1331 (Fed. Cir. 2012), to elide the significance of the
facts found. In my view, neither System Fuels nor Con-
solidated Edison supports such treatment because neither
of those cases can be fairly read to stand for the proposi-
tion that once it is established that an accepted account-
ing method was used, the trial court’s role in finding the
correct measure of overhead damages is at an end. And
nothing in either case says that the trial court must
disregard contrary evidence once accounting compliance
has been shown.
    In System Fuels, this court explained that the trial
court clearly erred when it found that records of generally
accepted accounting practices “did not demonstrate the
effect of the mitigation project on [overhead pools] with
reasonable particularity.” System Fuels, 666 F.3d at 1312
(quotations omitted). But there, the trial court refused to
award any amount merely because “[p]laintiffs . . . were
unable to verify exactly what portion of the capital sus-
pense loader was incurred for work exclusively on [the
mitigation project].” System Fuels, Inc. v. U.S., 78 Fed.
Cl. 769, 800 (2007) (emphasis added). Similarly, in Con-
solidated Edison, this court applied System Fuels in
rejecting the trial court’s determination that accepted
KANSAS GAS & ELECTRIC CO   v. US                         7
accounting methodology was “too ‘imprecise.’” Consol.
Edison, 676 F.3d at 1340 (citation omitted). The trial
court’s annunciation of a “precision” requirement there
was tantamount to an incorrect gloss on the reasonable
certainty requirement in our damages cases, see, e.g.,
Indiana Michigan Power Co. v. United States, 422 F.3d
1369, 1373 (Fed. Cir. 2005), and was properly reversed as
such. In any case it was a far cry from a specific,
grounded, factual determination, as the trial court made
here, demonstrating that the plaintiffs’ proposed measure
of damages was not merely approximate, but actually and
plainly wrong. 1
    These cases establish that business-reasonable ac-
counting methods are good evidence of damages. But
neither case establishes that when evidence of the use of a
generally accepted method of accounting is present, the

   1  The majority also relies upon this court’s recent re-
versal of the trial court in Vermont Nuclear Power Corp.
v. Entergy Nuclear Vermont Yankee, --- F.3d ----, 2012 WL
2126813 (Fed. Cir. June 13, 2012) to support its conten-
tion that GAP and FERC-compliant accounting is per se
proof of the correct measure of overhead damages. This
reliance is equally misplaced. There, the trial court had
refused to allow any damages for the portion of an over-
head pool attributed to breach-related projects by ac-
cepted accounting practices because imprecision in the
calculation of the total overhead pool made “the recovery
of capital suspense loader charges dubious.” Entergy
Nuclear Vt. Yankee, LLC v. United States, 95 Fed. Cl. 160,
194-95 (2010) (quotation omitted). But unlike Entergy
Nuclear, the trial court here did not merely disregard
accepted accounting practices as “imprecise.” Instead, it
looked to the record as a whole and determined that while
recovery of overhead damages was appropriate, it was
necessary to adjust the requested amount in order to
correct a known and specific inaccuracy.
8                            KANSAS GAS & ELECTRIC CO   v. US

trial court need not consider relevant evidence of aberrant
results stemming from the use of such method. Nor could
they: Our precedent states that “[d]amages for a breach
of contract are recoverable where . . . [in relevant part]
the damages are shown with reasonable certainty.” Id.
(emphasis added). Nothing prohibited the trial court from
adjusting its damages award even though it was reasona-
bly certain that the requested amount was wrong.
    Evidence that generally accepted accounting practices
were followed does not obviate examination of the under-
lying facts and should not nullify the trial court’s role as
the weigher of evidence, the finder of facts, and the crafter
of reasonable damages awards. Here, the trial court
properly fulfilled that role, and nothing in the majority’s
opinion suggests that the trial court’s assessment of the
facts was clearly erroneous.
    Because the trial court’s fact-finding as to overhead
was not clearly erroneous, and because its reduction of
the requested amount was not an abuse of its discretion, I
would affirm the trial court’s overhead award. For these
reasons, I respectfully dissent from section III of the
majority opinion.
