Free Joint Status Report - District Court of Federal Claims - federal

Case 1:02-cv-01894-EJD

Document 93

Filed 03/06/2006

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CONSUMERS ENERGY COMPANY, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) ) ) )

COFC No. 02-1894-C (Chief Judge Damich)

JOINT STATUS REPORT PURSUANT TO ORDER DATED JANUARY 12, 2006 Plaintiff Consumers Energy Company ("Plaintiff" or "Consumers Energy"), and Defendant United States of America ("Defendant" or the "government"), by and through their respective attorneys, submit this Joint Status Report in accordance with the Court's Order dated January 12, 2006, and state as follows: On January 12, 2006, this Court entered an Order staying the case at the request of the parties, and directing the parties to file a joint status report on or before March 6, 2006, addressing the status of settlement and/or the resumption of dispositive motions, discovery, and trial preparation. A. STATUS OF SETTLEMENT DISCUSSIONS On October 4, 2005, Consumers Energy submitted a Statement of Position Regarding Settlement letter to counsel for Defendant. Defendant reviewed and analyzed the Statement of Position letter, and on November 16, 2005, the parties participated in a telephone conference call through respective counsel to discuss the underlying economic assumptions and documentation. Defendant also discussed several technical concepts which, from Defendant's perspective, were required to be included in any formal settlement proposal. Some of the technical concepts required

Case 1:02-cv-01894-EJD

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further analysis by Plaintiff's experts, which was completed in February, 2006. On February 22, 2006, representatives of Consumers Energy and its counsel met with representatives of the Department of Energy ("DOE") and Department of Justice ("DOJ") at DOJ's offices in Washington, D.C. A new consideration has been recently added to the settlement discussions in that Consumers Energy has decided to sell the Palisades Nuclear Plant, and the parties' discussions on February 22 focused on whether the current settlement template can or should be modified as a result of that decision. The parties also discussed in detail the settlement process going forward, and the documentation which DOE will require for review in each step of the process. Consumers Energy's experts have analyzed the effect of the potential sale of Palisades under various settlement scenarios, and Consumers Energy believes that settlement continues to be viable if certain technical assumptions can be agreed upon with the government. The parties expect to have further discussions on these issues in the next few weeks. As a result, the parties respectfully request a continuation of the stay, and that further motions, discovery and trial preparation be suspended for another 60 days. The parties continue to believe that the settlement reached in another SNF case, Exelon v United States, may form the conceptual basis for settlement in this case. The format of the Exelon settlement was a compromise, and included lump sum and yearly reconciliation components. Consumers Energy's economic expert produced a report strictly for purposes of settlement, which conforms as closely as possible to the format of the Exelon settlement, as a basis to begin discussions. Plaintiff has re-analyzed the report in response to issues raised during the parties' November 16, 2005 conference call, and undertook further analysis after the parties' meeting on February 22, 2006. The parties request additional time to allow for the submission and subsequent

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review of a formal offer of settlement. CONCLUSION AND RELIEF REQUESTED The parties respectfully request that further activity in this case be temporarily suspended for a period of 60 days while the parties engage in settlement discussions. The parties further request that they be allowed to file a Joint Status Report in 60 days reporting the status of settlement negotiations and/or the need for further action in the case. Respectfully submitted, Peter D. Keisler Assistant Attorney General David M. Cohen Director s/ Harold D. Lester, Jr. Harold D. Lester, Jr. Assistant Director Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Tele: (202) 305-7562 Fax: (202) 307-2503 OF COUNSEL: Jane K. Taylor Office of General Counsel Department of Energy 1000 Independence Avenue, S.W. Washington, D.C. 20585 Attorneys for Defendant Dated: March 6, 2006 3 s/ Thomas O Mason Thomas O. Mason Williams, Mullen, Clark & Dobbins 8270 Greensboro Drive, Suite 700 McLean, VA 22102 (703) 760-5200 Harvey J. Messing (P23309) Jeffrey S. Theuer (P44161) LOOMIS, EWERT, PARSLEY, DAVIS & GOTTING, P.C. 232 S. Capitol Avenue, Suite 1000 Lansing, MI 48933 (517) 482-2400 Attorneys for Plaintiff OF COUNSEL: James E. Brunner (P28051) Arunas T. Udrys (P21660) Consumers Energy Company 212 West Michigan Avenue Jackson, MI 49201 (517) 788-2151 Attorneys for Plaintiff

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CERTIFICATE OF FILING I hereby certify that on this 6th day of March, 2006, a copy of the foregoing "JOINT STATUS REPORT PURSUANT TO ORDER DATED JANUARY 12, 2006" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. s/ Francis E. Purcell, Jr.

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