A Denver jury decided Nov. 16 that The Shaw Group, Baton Rouge, La., will have to pay Xcel Energy, Minneapolis, Minn. $40 million for delays and construction costs on the Comanche Unit 3 coal-fired powerplant in Pueblo, Colo. But in a split verdict, the jury also awarded Shaw an undisclosed amount of damages.
The verdict in district court for city and county of Denver relates to a dispute between Shaw and Xcel Energy regarding a contract entered into in February 2006 to build Xcel’s Comanche Unit 3, which began operating in May 2010 (Case No. 2009-CV-6913, Division 7).
Shaw claims that the actions of Xcel and other contractors resulted in delay and disruption costs to Shaw, which the contract requires Xcel to bear, according to the Louisiana contractor. Although the jury awarded such damages to Shaw, it also ruled that the company is responsible for damages to Xcel.
Shaw says the verdict will result in a $63 million pre-tax, or 45 cent per share, charge in the first quarter of 2011. According to a Shaw news release, Shaw will “pursue post-trial remedies, which may include asking the court to set aside the jury verdict and appeal to the state court of appeals.”
The original contract between Shaw and Xcel was for a $1.35-billion, 750-MW supercritical coal plant. The contract was for a lump-sum turnkey contract. Xcel was to procure contractors for some components, including steam generators and air quality control systems. The plant was originally expected to be online in the fall of 2009.
Shaw had originally sued Xcel for a $55-million breach of contract because the energy company failed to properly manage costs of the plant. The delays also breached a $10 million settlement that Shaw and Xcel reached in 2003 on another project, according to the original Shaw complaint.