Xcel Energy 2009 Annual Report Download - page 154

In March 2008, OSHA proposed penalties totaling $189,900 for twenty-two serious violations and three willful
violations arising out of the accident. In April 2008, Xcel Energy notified OSHA of its decision to contest all of the
proposed citations. On May 28, 2008, the Secretary of Labor filed its complaint, and Xcel Energy subsequently filed its
answer on June 17, 2008. The Court ordered this proceeding stayed until March 3, 2009 and subsequently extended
the stay to October 2009. The Court is currently considering whether to extend the stay.
A lawsuit was filed in Colorado state court in Denver on behalf of four of the deceased workers and four of the injured
workers (Foster, et. al. v. PSCo, et. al.). PSCo and Xcel Energy were named as defendants in that case, along with RPI
Coatings and related companies and the two other contractors who also performed work in connection with the
relining project at Cabin Creek. A second lawsuit (Ledbetter et. al vs. PSCo et. al) was also filed in Colorado state
court in Denver on behalf of three employees allegedly injured in the accident. A third lawsuit was filed on behalf of
one of the deceased RPI workers in the California state court (Aguirre v. RPI, et. al.), naming PSCo, RPI, and the two
other contractors as defendants. The court subsequently dismissed the Aguirre lawsuit. Settlements were subsequently
reached in all three lawsuits. These confidential settlements are not expected to have a material effect on the financial
statements of Xcel Energy or its subsidiaries.
On Aug. 28, 2009, the U. S. Government announced that Xcel Energy and PSCo have been charged with five
misdemeanor counts in federal court in Colorado for violation of an OSHA regulation related to the accident at Cabin
Creek in October 2007. RPI Coatings, the contractor performing the work at the plant, and two individuals employed
by RPI have also been indicted. On Sept. 22, 2009, both Xcel Energy and PSCo entered a not guilty plea, and both
will vigorously defend against these charges. In December 2009, Xcel Energy and PSCo filed two separate motions to
dismiss. It is uncertain when the court will rule on these motions.
Stone & Webster, Inc. vs. PSCo — On July 14, 2009, Stone & Webster, Inc. (Shaw) filed a complaint against PSCo in
State District Court in Denver, Colo. for damages allegedly arising out of its construction work on the Comanche
Unit 3 coal fired plant in Pueblo, Colo. Shaw, a contractor retained to perform certain engineering, procurement and
construction work on Comanche Unit 3, alleges, among other things, that PSCo was responsible for and mismanaged
the construction of Comanche Unit 3. Shaw further claims that this alleged mismanagement caused delays and damages
in excess of $55 million. The complaint also alleges that Xcel Energy and related entities, including PSCo, guaranteed
Shaw $10 million in future profits under the terms of a 2003 settlement agreement. Shaw alleges that it will not receive
the $10 million to which it is entitled. Accordingly, Shaw seeks an amount up to $10 million relating to the 2003
settlement agreement. PSCo denies these allegations and believes the claims are without merit. PSCo filed an answer
and counterclaim in August 2009, denying the allegations in the complaint and alleging that Shaw has failed to
discharge its contractual obligations and has caused delays, and that PSCo is entitled, among other things, to liquidated
damages and excess costs incurred. It is not anticipated that this lawsuit will affect Comanche Unit 3’s scheduled
in-service date.
Fru-Con Construction Corporation vs. UE et al. — In March 2005, Fru-Con Construction Corporation (Fru-Con)
commenced a lawsuit in U. S. District Court in the Eastern District of California against UE and the Sacramento
Municipal Utility District (SMUD) for damages allegedly suffered during the construction of a natural gas-fired,
combined-cycle power plant in Sacramento County. Fru-Con’s complaint alleges that it entered into a contract with
SMUD to construct the power plant and further alleges that UE was negligent with regard to the design services it
furnished to SMUD. In August 2005, the court granted UE’s motion to dismiss. Because SMUD remains a defendant
in this action, the court has not entered a final judgment subject to an appeal with respect to its order to dismiss UE
from the lawsuit. Because this lawsuit was commenced prior to the April 2005, closing of the sale of UE to Zachry,
Xcel Energy is obligated to indemnify Zachry for damages related to this case up to $17.5 million. Pursuant to the
terms of its professional liability policy, UE is insured up to $35 million.
Connie DeWeese vs. PSCo — In November 2008, there was an explosion in Pueblo, Colo. which destroyed a tavern
and a neighboring store. The explosion killed one person and injured seven people. The Pueblo Fire Department and
the Federal Bureau of Alcohol, Tobacco and Firearms (ATF) have determined a natural gas leak from a pipeline under
the street led to the explosion, stating that natural gas passed through the soil and built up in the tavern’s basement.
On Feb. 8, 2010, a wrongful death lawsuit was filed in Colorado District Court in Pueblo, Colorado against PSCo and
the City of Pueblo by several parties that were allegedly injured, as a result of this explosion. The plaintiffs are also
alleging economic and noneconomic damages. Among other things, the lawsuit alleges that the accident occurred as a
result of PSCo’s negligence. PSCo denies liability for this accident and intends to file an answer to the complaint on or
before March 1, 2010.
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