MINNEAPOLIS (AP) -- Xcel Energy says it has reached a $100 million settlement with the federal government over costs the company incurred because the Department of Energy failed to remove used nuclear fuel by a 1998 deadline.

The company says Friday that the government will pay for used fuel storage costs at Prairie Island and Monticello nuclear generating plants sustained through 2008 and for costs from 2009 to 2013.

The money will be returned to customers in Minnesota, Wisconsin, North Dakota, South Dakota and Michigan. The company says it will soon make regulatory filings about how it plans to return the money.

A company spokeswoman says Xcel has about 1.6 million customers in the five states and the typical residential customer will see a benefit of about $20.

The settlement resolves two cases, including federal lawsuit Xcel won in 2007 that was on appeal.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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RELEASE FROM XCEL ENERGY (07/08/2011):

MINNEAPOLIS – Xcel Energy announced today it has reached a settlement with the federal government regarding costs incurred by Northern States Power Co. and its customers because of the Department of Energy’s failure to begin removing used fuel from the company’s nuclear plant sites by a 1998 deadline.

Under the settlement, the federal government will pay approximately $100 million for used fuel storage costs at Prairie Island and Monticello nuclear generating plants incurred through 2008. The federal government also will pay costs incurred from 2009 through 2013 related to the DOE’s failure to remove used fuel.

The money will be returned to NSP customers in Minnesota, Wisconsin, North Dakota, South Dakota and Michigan. Xcel Energy will make appropriate regulatory filings in the coming weeks that will address the best means of returning the proceeds to customers.

“This is a good outcome for our customers,” said Judy Poferl, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “It compensates our customers for costs already incurred because of the federal government’s delays and provides a timely means for recovering future costs.”

Since 1994, NSP has been an industry leader in seeking to compel the federal government through legal action to comply with the Nuclear Waste Policy Act of 1982.

“This settlement will not alter our efforts to pressure the federal government to fulfill its obligations under the Nuclear Waste Policy Act to find a long-term solution for waste disposal outside of Minnesota,” Poferl said. “Xcel Energy will continue to press for federal action to remove the waste from plant sites and is committed to working with our stakeholders to this end.”

The settlement resolves litigation in two cases Xcel Energy brought against the federal government. The first case, decided by the Court of Federal Claims in September 2007, was on appeal, and the second case was scheduled to go to trial in the Court of Federal Claims this month.

The government’s first payment under the settlement of nearly $100 million addresses costs incurred through 2008. The settlement also provides for timely reimbursement for the actual costs incurred for used fuel storage between 2009 and 2013. Xcel Energy expects those costs will total another roughly $100 million that would be paid over the next four years. The settlement does not address costs for used fuel storage after 2013; such costs could be the subject of future litigation.

“We worked hard from the onset of this litigation to achieve the best remedy for our customers, and this settlement will provide them with both certainty and substantial economic relief while ending nearly two decades of costly, protracted litigation,” Poferl said. “We look forward to working with our state commissions on plans to return these benefits to our customers in a timely fashion.”

Xcel Energy’s lawsuits were among 74 filed by utilities against the federal government alleging partial breach of contract when the DOE failed to meet a Jan. 31, 1998, deadline to begin accepting used fuel. The dispute stemmed from contracts the DOE entered into with the utilities concerning the DOE’s obligations under the Nuclear Waste Policy Act. Seventeen lawsuits involving 44 reactors were settled previously.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company that provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies in eight Western and Midwestern states. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.