Energy Northwest officials agreed Thursday to pay slightly more than $18 million to settle a lawsuit brought by Babcock & Wilcox Nuclear Energy.
B&W sued in U.S. District Court last year for breach of contract after it completed work to replace the 26-year-old condenser at Energy Northwest's nuclear power plant near Richland. It had a $33 million contract for the work.
The executive board discussed the proposed settlement behind closed doors Thursday because state law allows for litigation issues, then voted in a public session to accept the work on the condenser project and to ratify the $18 million settlement agreement.
"It came in at the best level we could have hoped for," said executive board Chairman Sid Morrison. "It came out below our estimate."
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The condenser at the Columbia Generating Station was replaced during the refueling outage that Energy Northwest has every other year. Energy Northwest planned for its longest refueling outage on record, at 80 days, in spring 2011 to allow time for the condenser replacement.
However, the outage lasted about 175 days as work dragged on to replace the condenser, and Bonneville Power Administration estimated the net cost of the outage at about $60 million.
The Columbia Generating Station provides power to about 1 million homes when it is operating and is a critical part of the Bonneville Power Administration's power system, which markets the plant's power.
B&W claimed in the lawsuit that Energy Northwest failed to reveal important information about the work, costing B&W about $50 million.
Energy Northwest has said little about the project since the lawsuit was filed, saying it did not want to hamper efforts to resolve issues with B&W.
However, Energy Northwest officials discussed problems in board meetings and with the Herald before the lawsuit was filed.
They said then that B&W did inadequate planning and preparation, and management problems persisted in areas of quality and safety.
About four months into the outage, Energy Northwest said it had mandated repeated work stoppages totaling a combined 20 days because of concerns about industrial safety and risk to the contractor's workers. At one point, it hired an alternate contractor to do some welding and the new contractor was able to produce quality work much faster, said Energy Northwest officials.
B&W said in the lawsuit that it found different conditions, including more radiological contamination, than Energy Northwest described during the bidding process. Design documents were incomplete or inadequate, causing more work to be done than originally indicated, the lawsuit said.
Lack of adequate maintenance and failure by Energy Northwest to operate the plant effectively caused additional problems, the lawsuit alleged.
B&W brought more workers and management onto the project to accelerate work and catch up at Energy Northwest's direction, but Energy Northwest did not increase the contract pay to compensate, the complaint said.
Proceedings in the lawsuit were halted in late 2011 to allow mediation this spring.
If B&W also approves the proposed settlement and the lawsuit is dismissed, Energy Northwest may release more information.
The new condenser is working well, Morrison said. Energy Northwest was one of the nation's last boiling water reactors to replace its condenser and it was a good investment, he said.
-- Annette Cary: 582-1533; email@example.com