UtiliCorp United, Inc.
Providing settlement advice, expert testimony and rebuttal reports for an electricity and natural gas distributor
UtiliCorp United, Inc. (UCU ) is responsible for approximately 30 former manufactured gas plant sites that they acquired through acquisitions and mergers with other utilities. UCU holds the legal responsibility for clean up of any residual contamination left over from when these sites functioned as manufactured gas plant sites. UCU wanted to recover insurance funds to remediate its properties that formerly served as manufactured gas plants. Although UCU did not currently own all of the sites, they wanted to settle with its insurance carriers to recover funds to remediate these sites. The problem in this situation is that insurance settlement and litigation is generally a one-time occurrence – if UCU settled before remediation was complete it ran the risk of being responsible for any costs above the settlement. On the other hand, if UCU waited to file a claim through these, it ran the risk that these carriers could be insolvent, which is becoming a more common occurrence in the insurance industry.
PA Consulting Group was retained to develop probabilistic cost estimates for the environmental liability at each site and for providing insurance allocation modelling for the five different insurance profiles the sites fell under. In addition, PA was to provide settlement advice and expert testimony on insurance allocation in any litigation with insurance carriers.
PA worked with the UCU’s attorney’s to develop demand documents for each of the insurance carriers. PA then presented its findings to each of the carriers. These presentations included a defense of the methodology to the insurance carriers’ consultants. PA also produced rebuttal reports to refute the findings of the consultants retained by the carriers.
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