U.S. District Judge Robert R. Merhige Jr. approved late yesterday afternoon the final terms of the agreements settling the uranium contract litigation involving Westinghouse Electric Corp. and Virginia Electric and Power Co.
The companies had announced an agreement in principle April 16 to resolve their 4-year-old dispute that arose when Westinghouse canceled three uranium supply contracts it had with Vepco involving more than 14 million pounds of uranium.
As reported previously, Vepco said the settlement provides for the payment of cash, uranium deliveries and goods and services having a present value to the utility of more than $380 million.
"This sum is equal to the value of the uranium contracts under litigation if they had been fully performed by Westinghouse," Vepco said.
The specific terms of the settlement were approved by Vepco's board of directors several hours before the final order dismissing the case was signed by Merhige.
In addition to a cash payment having a present value of $129 million, Vepco will receive 7.5 million pounds of uranium from Westinghouse between 1980 and 1994 with a present value to the utility of about $130 million.
The settlement also stipulates that Vepco may receive cash payments having a present value of up to $48 million from Westinghouse out of any proceeds it might receive if it is successful in its pending antitrust suit against members of the uranium cartel.
Westinghouse estimated that the pretax cost of its current and future obligations to Vepco as a result of the settlement is approximately $202.2 million. This will be accounted for, the company said, as an extraordinary item in the second quarter.
As part of the uranium settlement, the companies also completed their previously announced plans to resolve a dispute over repairs to the steam generators at the Surry power station. Westinghouse had built the turbine generator equipment which Vepco now is having to replace at the plant.
"This agreement provides for recovery from Westinghouse of cash and goods and services of over $32 million," Vepco said. "This is equivalent to about 35 percent of the cost of repairs to the steam generators and turbine generator."
While the turbine generator settlement was less than 100 cents on the dollar, Vepco said Dean William B. Spong Jr. of the College of William and Mary's law school had found the terms to be fair and equitable to both the utility and to Westinghouse. Spong has served as Merhige's special settlement negotiator in the uranium contract litigation.
With the judge's signature on the Vepco settlement, six of the 10 individual lawsuits that went to trial in September 1977 have been resolved. The four plaintiffs who have no settled are scheduled to begin the damages phase of their trial Oct. 1. The damages case had been set to start in mid-July, but was postponed for 2 1/2 months because of a conflict in Merhige's schedule.
Asked at the conclusion of the hearing about the settlement prospects for Northeast Utilities, Long Island Lighting Co., South Carolina Electric and Gas Co., Spong said he remained hopeful that they could be resolved before the damages trial is scheduled to begin.
Richmond Times-Dispatch at A-5 (June 23, 1979)
Cooper, Elliott, "Vepco Accord in Fuel Case Is Approved" (1979). 1976–1985: William B. Spong, Jr.. 32.