Xcel says it doesn't owe nuclear contractor

Xcel Energy says it didn't stiff a big contractor on a nuclear power plant upgrade.

The Minneapolis-based utility, in court papers filed Tuesday, denied that it owes Babcock & Wilcox Nuclear Energy (B&W), another $45 million for work to replace two steam generators at the Prairie Island Nuclear Power Plant in Red Wing, Minn.

Although the project was finished last December, it ran behind schedule almost from the beginning, and B&W, a leading nuclear engineering firm based in Charlotte, N.C., shares blame with the prime contractor for delays, Xcel alleged.

"They continued to lose ground against the schedule on a virtually daily basis," Xcel's attorneys from the firm Faegre Baker Daniels of Minneapolis alleged in a response filed in Goodhue County District Court.

B&W filed its lawsuit last month against Xcel and prime contractor SNC Lavalin Nuclear Inc., alleging it wasn't fully paid and that Xcel hasn't told state utility regulators the whole story about the project's costs. Xcel has said the upgrade cost $285 million.

It is unclear whether the disputed $45 million is included in that figure or represents a potential additional liability. When asked to clarify, Xcel spokeswoman Mary Sandok responded by e-mail: "While we do not comment on details of pending litigation, generally speaking, our rate requests are based on a forecast of total project costs, and customers will benefit from any recoveries we obtain in disputes."

In the court papers, Xcel denied it misrepresented the project's cost to state regulators, who routinely review whether monopoly utilities are making prudent investments. Xcel also shot back at B&W, accusing the company of "slandering" the plant's property title by trying to slap on a mechanic's lien. Such liens are more typical on small homebuilding and commercial projects when contractors don't get paid.

It took more than a year, and 1,500 construction workers, to replace two 40-year-old steam generators on Prairie Island Unit 2. The 330-ton generators were assembled in France, arrived by ship and barge, and were hoisted through a hatch in the containment building with only inches of clearance. The generators create steam to drive turbines from water heated under pressure in the reactor. Unit 1's steam generators were replaced in 2004.

B&W contends that its contract to work on the project contained both fixed and "target" prices. Some of the higher costs and delays, B&W contends, grew out of Xcel's decision to perform additional work of its own at the same time, interfering with movement of workers and equipment in the plant.

The company has said it doesn't comment on litigation.