Energy Northwest enters mediation on condenser lawsuit

Energy Northwest and the contractor it hired to replace the condenser at its nuclear power plant near Richland have agreed to mediation in a lawsuit filed by the contractor.

Judge Edward Shea has ordered a halt to proceedings in Eastern Washington District U.S. Court at least until spring at the request of Babcock & Wilcox Nuclear Energy, which filed the lawsuit, and Energy Northwest.

Mediation is expected to occur in mid-April, according to court documents.

If it is not successful, the case could resume.

"A stay will markedly increase the likelihood of a successful mediation," according to a court memorandum filed by both parties. It also will eliminate the burden and costs of court-ordered discovery and litigation deadlines during mediation, the memo said.

B&W filed the breach of contract lawsuit this fall after it completed work to replace the 26-year-old condenser at the Columbia Generating Station under a $33 million contract.

The new condenser, which turns steam generated by boiling water in the reactor back into water for reuse in the plant, is expected to allow the 1,150 megawatt plant to gain up to 12 megawatts of additional electricity generation.

The condenser was replaced during the refueling outage that Energy Northwest plans every other year. Energy Northwest planned for its longest refueling outage on record, at 80 days, 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 extended 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 does not want to hamper efforts to resolve issues with B&W.

However, Energy Northwest officials had 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, Energy Northwest officials said.

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.