Duke Energy doesn’t owe Westinghouse disputed $352 million, judge rules

A federal judge in Charlotte has ruled that Duke Energy does not owe Westinghouse Electric $352 million in disputed costs after canceling a contract for a nuclear power plant in Florida.

The case before U.S. District Judge Max Cogburn stemmed from Duke’s termination of an engineering, procurement and construction – or “EPC” – contract for a nuclear plant in Levy County, Fla.

Progress Energy, which Duke acquired in 2012, had joined two other power companies in contributing to Westinghouse’s development of an advanced reactor, the AP1000, that was to be used in Levy County. Progress later pulled out of that consortium.

Progress canceled its EPC contract with Westinghouse in 2014. It cited delays in getting a federal operating and construction license because of a Westinghouse design error, and a change in Florida law on recovering construction costs from ratepayers.

Westinghouse, according to court documents, said that canceling the contract would cost Progress a previously-agreed $30 million termination fee. But it also added $482 million – which it later reduced to $352 million – that Westinghouse said was Progress’ share of developing the AP1000.

Cogburn sided with Duke last week, citing an agreement between the two companies that the Levy County contract was separate from AP1000 design work.

Cogburn ordered Duke to pay Westinghouse $34.2 million, representing the EPC contract termination fee plus interest. He denied Duke’s move to offset that payment by the $51 million Progress had paid Westinghouse for a turbine generator for Levy County that was ordered but never built.

“While we are disappointed anytime we have to go to litigation with a vendor, we are pleased with the judge’s decision not to award the termination cost claim,” Duke spokeswoman Rita Sipe said.

AP1000 reactors, meanwhile, are under construction at the Summer nuclear plant, north of Columbia, S.C., that is owned by South Carolina Electric & Gas and Santee Cooper, and at Georgia Power’s new Vogtle plant.

This story was originally published December 28, 2016 at 12:14 PM with the headline "Duke Energy doesn’t owe Westinghouse disputed $352 million, judge rules."