Tacoma agrees to seven-figure settlement with U.S. Oil over power outage
The city of Tacoma will pay U.S. Oil and Refining Co. $2 million to settle all damages caused during a power outage that shut down the company’s operations in 2016.
The lawsuit, which was filed by U.S. Oil in Pierce County Superior Court in 2018, claimed the company lost millions due to a technician error and was not made aware by Tacoma Power of maintenance happening at a substation that caused the outage.
In the settlement, the city did not admit liability but decided it was in the best interest of the city to settle to “avoid the costs of litigation and the uncertainty of a trial,” said city attorney Bill Fosbre.
Tacoma City Council will vote Tuesday to authorize a full and final settlement of all damages claimed against Tacoma Power in the amount of $2,040,000. Tacoma Public Utilities Board approved the settlement at a Nov. 13 meeting.
U.S. Oil originally sought damages of more than $9 million. That changed as the parties spent months determining what occurred on April 28, 2016. U.S. Oil could not be reached for comment as of Tuesday.
“I would say it’s a good settlement, and we’ve made changes to make sure this never happens again,” Fosbre told The News Tribune.
One of those changes is to ensure an alternative path for power in the event of a planned outage.
Prior to 2000, U.S. Oil experienced multiple unexpected disruptions of power and shutdowns of the refinery, according to the lawsuit filed in 2018. In 2000, an agreement was established to use the Lincoln substation as a dedicated source of electricity to the refinery.
Part of that agreement included notifying U.S. Oil of maintenance at the substation. U.S. Oil said it was not informed prior to the maintenance that took place in April 2016 and resulted in a power outage.
“U.S. Oil has suffered substantial damages including, but not limited to, lost profits from refinery products that were not able to be produced, costs associated with managing the excess inventory of crude stock that had been purchased on contract but which could not be processed following the outage, and increased costs and fees associated with the interruption of refinery operations during the unexpected complete loss of power,” the lawsuit stated. It also cited damage to equipment.
U.S. Oil is one of five refineries in the state of Washington, producing a variety of refined petroleum projects, including gasoline(s), ultra-low sulfur diesel, jet fuel, marine fuels, and asphalt products, according to the lawsuit. It’s operated a refinery on the Tideflats since 1957.
In November 2018, Par Pacific Holdings, Inc. acquired U.S. Oil for $358 million.
This story was originally published November 19, 2019 at 1:01 PM.
