The U.S. Energy Department has agreed to a $24 million legal settlement to resolve breach of contract litigation brought by Centrus Energy in the U.S. Court of Federal Claims.
The settlement agreement was reached Jan. 11, and Centrus reported the development on Jan. 17 in an 8-K filing with the U.S. Securities and Exchange Commission. The documents indicate DOE will pay Centrus $4.7 million and will forgo its claim its claim of about $19.3 million in credits owed to the government by the company.
The original May 2013 lawsuit sought damages of about $38 million for work done between 2003 and 2011 by the company, then called U.S. Enrichment Corp., or USEC. “USEC and the Government disagreed regarding USEC’s claimed Incurred Cost Adjustments” during the time period, according to the settlement.
The work was done on various contracts with DOE as well as subcontracts with agency contractors, according to the SEC filing.
USEC managed DOE’s Portsmouth Gaseous Diffusion Plant in Ohio and Paducah Gaseous Diffusion Plant in Kentucky after the department privatized its uranium enrichment function at those facilities in July 1998. The company enriched uranium for commercial nuclear power plants. The company ceased enrichment at Portsmouth in May 2001 and at Paducah in May 2013.
“Specifically, at Portsmouth, we were contracted to keep the facility in Cold Standby so it could be restarted if needed, and then later in Cold Shutdown, where we performed pre-D&D [decontamination and decommissioning] work to reduce contamination and otherwise prepare the facility for turnover to the D&D contractor in 2011,” said Centrus spokesman Jeremy Derryberry.
As part of the deal, Centrus has also agreed not to seek any additional payments under certain DOE subcontracts.
The settlement does not extend to claims either party might bring in connection with the American Centrifuge Project after September 30, 2017. The settlement also does not extend to Centrus subcontracts with UT-Battelle for work at the Oak Ridge National Laboratory in Tennessee.
In September 2015, Centrus began closing out its three-year demonstration of the American Centrifuge technology at the DOE’s Portsmouth Site when federal funding ended. The demonstration had 120 centrifuges linked together in a cascade to simulate industrial operation of the advanced enrichment method.
When DOE stopped its financial support, Centrus self-funded the American Centrifuge demonstration until February 2016, but Congress never provided money to restart the project. Since 2014, Centrus has done more limited research and development of the technology at DOE’s Oak Ridge National Laboratory.
Centrus Energy has said previously it expected to finish cleanup of the retired American Centrifuge demonstration site at Piketon, Ohio, by the end of 2017. Management will offer more details on the status of the cleanup work when it releases its next quarterly earnings report next month, Derryberry said in a Thursday email.
