Westinghouse Electric Corp. has reached a $112 million out-of-court settlement with four Texas utilities on a uranium-supply suit.
The agreement was signed by U.S. District Court Judge Robert R. Mehrige Jr., who presided over a trial in Richmond involving eight cases brought by utilities against Westinghouse.
The suits were filed after Westinghouse agreed to sell the utilities 80 million pounds of uranium at an average price of $10. When the price of uranium soared to above $40 a pound, Westinghouse stoodto lose $2 billion.
The company said it could not honor the contracts. The suits and negotiations followed.
Westinghouse originally had agreed to sell 11.3 million pounds of uranium to the four utilities, called the South Texas Project (STP), at approximately $12 a pound, or a total of about $144 million. Had Westinghouse been forced to sell it at that price after uranium rose to over $40 per pound, the cost would have been about $450 million and Westinghouse could have lost about $300 million.
Under the agreement, Westinghouse will pay STP $1 million in cash within 30 days and provide 6 million pounds of uranium. STP will pay the total cost of production for this uranium.
Westinghouse also will sell an additional 1 millionpounds of uranium at a discounted price and provide 2.4 million pounds of uranium under the court-ordered allocation plan at prices originally qouted.
STP also has the opportunity to obtain as much as 4.5 million additional pounds of uranium produced by a Westinghouse subsidiary.
STP may be entitled to additional settlement benefits if Westinghouse recovers damages from its lawsuit against 29 uranium producers based on a claim there was a conspiracy to fix prices.