GE Hitachi, Feds Reach Settlement in False Claims ESBWR Lawsuit

General Electric Hitachi (GE Hitachi) will pay $2.7 million under a settlement agreement with the Department of Justice (DOJ) to resolve allegations that the company made false statements about a non-safety component of its advanced nuclear Economic Simplified Boiling-Water Reactor (ESBWR). 

The ESBWR, a 1,650-MWt reactor that uses natural circulation for normal operation and has passive safety features, is undergoing design certification by the Nuclear Regulatory Commission (NRC).

The government alleged that Wilmington, N.C.–based GE Hitachi concealed known flaws in its analysis of the ESBWR’s steam dryer from the Department of Energy and the NRC. A steam dryer removes liquid water droplets from steam produced by the nuclear reaction that generates electricity in boiling water reactors.

The NRC requires applicants for nuclear reactor design certification to demonstrate that vibrations caused by the steam dryer will not result in damage to a nuclear plant. “The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis and falsely represented that it had properly analyzed the steam dryer in accordance with applicable standards and had verified the accuracy of its modeling using reliable data,” the DOJ said in a statement last week.

But GE Hitachi said in a statement that it expressly denied the allegations regarding its plant-based load evaluation methodology (PBLE) for analyzing anticipated lads on the ESBWR steam dryer throughout the process.

“Even though [GE Hitachi] denies the allegations, we believe that resolution of this matter supports our continuing efforts to maintain and enhance a positive working relationship with the U.S. Government, and more specifically the [NRC],” the company said. “[GE Hitachi] steam dryers have worked effectively the world over for more than 50 years. As recent as the fall of 2012, the PBLE methodology was successfully utilized as part of the extended power uprate of one of the largest boiling water reactors in the world.”

The NRC issued the final safety evaluation report and final design approval for the standard ESBWR standard design in March 2011. According to the NRC, concerns with the ESBWR’s steam dryer identified in late 2011 “called into question certain conclusions in the staff’s safety review.” The government’s lawsuit will now delay the NRC’s final rulemaking process for the reactor design because the regulatory body must now first issue a supplemental final safety evaluation report.

The settlement was reportedly reached after LeRay Dandy, a former employee of the General Electric subsidiary (also partially owned by Tokyo-headquartered Hitachi Ltd.) filed a whistleblower suit under the False Claims Act. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. However, Dandy’s share of the settlement has not been determined.

The case is: United States ex rel. Dandy v. General Electric Hitachi Nuclear Energy Americas LLC, General Electric Company, 7:12-cv-009 (E.D.N.C.).  The DOJ stressed that the claims resolved by the settlement are allegations only; there has been no determination of liability.

—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)