Settlement with Xcel Could Cost Gov’t $200M
Minneapolis-based Xcel Energy, Inc., announced Friday that it has reached a settlement with the U.S. government to resolve two lawsuits-which could cost the federal government $200 million.
The settlement resolves two separate lawsuits that Xcel brought against the federal government-one that was on appeal and another that was scheduled to go to trial this month.
Xcel said that its subsidiary-Northern States Power Company (NSP)-and its customers incurred unnecessary costs because the U.S. Department of Energy (DOE) failed to begin removing used fuel from the company's nuclear plant sites by a 1998 deadline.
Under the settlement agreement, the federal government will pay about $100 million for used fuel storage costs incurred through 2008 at NSP's Prairie Island and Monticello nuclear generating plants, according to Xcel.
Xcel said that the settlement also requires the federal government to pay costs incurred from 2009 through 2013 related to the DOE's failure to remove used fuel-and the company expects those costs will total another $100 million, which will be paid over the next four years.
According to Xcel spokeswoman Mary Sandok, the extra fuel-storage costs were embedded in rates that were paid by NSP customers in Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan. The money collected under the settlement will be returned to customers in those states, and Xcel will decide the best means of returning the proceeds in the coming weeks.
“This is a good outcome for our customers,” Judy Poferl, president and CEO of NSP, said in a statement. “It compensates our customers for costs already incurred because of the federal government's delays and provides a timely means for recovering future costs.”
Xcel said that the two lawsuits it filed were among 74 filed by utilities against the federal government. Those lawsuits stemmed from contracts that the DOE entered into with the utilities and concern the agency's obligations under the Nuclear Waste Policy Act.
Xcel is the state's largest utility and the ninth-largest public company based on revenue, which totaled $10.3 billion in 2010.