Recovering Industry Losses from Federal Inaction

“The ruling marks yet another victory for Pillsbury Winthrop Shaw Pittman’s energy practice, which has chalked up two other big wins in the spent-fuel disposal realm in the last month alone.”

—Energy Law360, October 19, 2007

It has been almost 25 years since American utility companies began paying sizeable fees to the U.S. government in exchange for safe disposal of spent nuclear fuel, and nearly 10 years since the U.S. Department of Energy first failed to honor its statutory and contractual obligations. Since then, more than one-third of the affected utility companies have enlisted Pillsbury to handle their claims—potentially aggregating in the billions of dollars—for providing alternative storage and covering other costs imposed by the government’s breach of contract.

In the past year, the firm has spent more than 15 weeks in trial before the U.S. Court of Federal Claims on multiple cases. In 2007, this led to three favorable verdicts, including a $116.5 million court victory in September for Northern States Power Company, a subsidiary of Minneapolis-based Xcel Energy.

In October, two additional decisions in favor of another Pillsbury client, Entergy Corporation, yielded nearly $60 million in damages covering the company’s Arkansas and Mississippi nuclear plants. On a percentage basis, the Entergy awards were equivalent to the Xcel award. In all three cases, the damages obtained represented virtually all of the clients’ hard costs to date.

In addition, the DOE is paying another Pillsbury client more than $20 million to settle its past claims. Future payments will occur as the client incurs additional costs. This settlement, which came after prolonged negotiations with the Department of Justice, represents one of the few instances where a utility plaintiff has been able to resolve its spent fuel claims without protracted litigation.

Many of the still-pending spent fuel cases are slated for resolution over the next few years. Pillsbury is the firm of choice for utilities in this arena, where it has 17 pending cases. The DOE’s latest schedule indicates that it will miss its 1998 storage deadline by at least 22 years.