FOR IMMEDIATE RELEASE CIV
WEDNESDAY, May 27, 1998 (202) 616-2765
TDD (202) 514-1888
JUSTICE DEPARTMENT SUES UTILITY COMPANY FOR RENEGING ON DEAL TO PURCHASE SHARE IN LOUISIANA NUCLEAR PLANT
WASHINGTON, D.C. -- The Department of Justice, joined by the Chapter 11 Trustee for Cajun Electric Power Cooperative, Inc., today sued a Philadelphia-based utility company seeking more than $67 million in damages because the company allegedly reneged on an agreement to purchase a 30 percent interest in a Louisiana nuclear power plant.
The suit filed today on behalf of the Rural Utilities Service (RUS) of the Department of Agriculture in District Court in Baton Rouge seeks damages from PECO Energy Company, an electrical and natural gas utility.
Assistant Attorney General Frank W. Hunger of the Civil Division said the lawsuit alleges that in 1997, PECO entered into contracts to purchase a portion of the River Bend nuclear power plant in Eastern Louisiana for $50 million, but subsequently reneged on its contractual obligations, without justification. As a result of PECO's failure to comply with its contractual obligations, RUS suffered damages equal to the $50 million contract price, plus interest, because RUS was unable to locate another purchaser within the time allowed for the government to receive the sales proceeds, under a settlement previously approved in the Cajun Chapter 11 proceedings.
According to the complaint, PECO had agreed to purchase 30 percent of the River Bend nuclear plant from Cajun, which previously owned the 30 percent interest in the plant. Cajun is currently in Chapter 11 bankruptcy proceedings. The suit alleges that the Cajun Estate suffered a variety of other forms of damages totaling $17,364,687.