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Judge upholds $383M verdict against Toshiba over faulty hydro plant overhaul

Judge upholds $383M verdict against Toshiba over faulty hydro plant overhaul

Rule Changes

Michigan utilities win contract dispute over Ludington Pumped Storage Plant rebuild

October 20th, 2026: Engineering News-Record reports the affirmation

Overview

Updated Oct 26

A federal judge upheld a $383 million jury verdict against Toshiba America Energy Systems over a failed overhaul of the Ludington Pumped Storage Plant. The Michigan hydro station, co-owned by Consumers Energy and DTE Electric, supplies 10% of each utility's generating capacity.

Jurors found in December 2025 that Toshiba breached warranties on the $560 million job, and Judge F. Kay Behm let that verdict stand on September 28. A February 2026 utility filing put total damages above $394 million and said appeals could take two years or more. Toshiba has not said whether it will appeal, and the claim against its parent, Toshiba Corporation, is still pending.

Why it matters

If the verdict survives appeal, Toshiba's payment could offset repair costs that might otherwise land on Michigan utility customers' bills.

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Key Indicators

$383M
Jury verdict affirmed by judge
Damages for Toshiba's breach of warranty, plus about $11M in liquidated damages for late work.
$560M
Original overhaul contract
Contract awarded to Toshiba in 2010 to restore the 50-year-old plant to near-new condition.
$790M
Projected total repair costs
Utilities' estimate of what fixing the defective work will cost, including the $508M already spent.
50
Hours per year affected turbines could run
Some pump-turbines were limited to about 50 hours of operation annually after the defective overhaul.

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People Involved

F. Kay Behm
F. Kay Behm
U.S. District Judge, Eastern District of Michigan
Presided over the trial and affirmed the verdict on September 28, 2026
BW
Brian Wheeler
Consumers Energy spokesperson
Spoke on behalf of both utilities after the verdict

Organizations Involved

TA
Toshiba America Energy Systems
Energy equipment subsidiary
Defendant; contract terminated by utilities in 2024

American subsidiary of Japan's Toshiba Corporation that contracted to overhaul the Ludington plant in 2010.
Consumers Energy
Consumers Energy
Electric utility
Co-owner of Ludington plant and plaintiff

Michigan electric utility and co-owner of the Ludington plant, which provides 10% of its generating capacity.
DTE Electric
DTE Electric
Electric utility
Co-owner of Ludington plant and plaintiff

Michigan utility and co-owner of the Ludington plant, which provides 10% of its generating capacity.
Voith Hydro
Voith Hydro
Hydroelectric equipment manufacturer
Repair contractor at Ludington

Hydroelectric equipment maker hired to repair the Ludington plant after the Toshiba contract was terminated.
Jenner & Block
Jenner & Block
Law firm
Represented the utilities in the lawsuit

Law firm that represented Consumers Energy and DTE Electric at trial.

Timeline

2010 October 2026

10 events Latest: October 20th, 2026 · 3 weeks ago
Tap a bar to jump to that date

  1. Engineering News-Record reports the affirmation

    Latest Report

    ENR publishes its account of Judge Behm's September 28 order upholding the $383M verdict.

  2. Judge Behm affirms verdict, denies new trial

    Legal

    Judge rejects Toshiba's motions to overturn the verdict, finding the award not legally excessive and jurors not biased.

  3. Utilities report litigation status to Michigan regulators

    Regulatory

    Consumers and DTE Electric's filing puts total damages above $394 million, including liquidated damages. It says appeals could take two years or more.

  4. Jury awards $383M to utilities

    Legal

    After a six-week trial, the jury finds Toshiba breached warranties and awards about $383 million, plus about $11 million in liquidated damages.

  5. Utilities terminate Toshiba contract

    Contract

    Consumers Energy and DTE end the Toshiba contract and hire Voith Hydro for repairs worth more than $400 million.

  6. Michigan regulators allow repair cost tracking

    Regulatory

    Michigan Public Service Commission lets the utilities track repair costs for potential reimbursement later.

  7. Utilities file lawsuit against Toshiba

    Legal

    Consumers Energy and DTE Electric sue Toshiba America Energy Systems and Toshiba Corporation in federal court in Flint.

  8. Defects found in discharge rings on two units

    Discovery

    Cracks are found in discharge rings and extensions on two pump-turbine units, limiting some turbines to about 50 hours of operation per year.

  9. Overhaul work begins at Ludington plant

    Construction

    Toshiba begins work on six pump-turbines buried five stories underground near the Lake Michigan shore.

  10. Utilities award $560M overhaul contract to Toshiba

    Contract

    Consumers Energy and DTE Electric hire Toshiba to restore the 50-year-old Ludington plant to near-new condition.

Scenarios

1

Toshiba appeals to Sixth Circuit, verdict upheld

Likely Resolves by Q2 2028

Discussed by: Legal analysts and the utilities' counsel at Jenner & Block

Toshiba has grounds to appeal the September 28 order denying its motion for a new trial. The Sixth Circuit would review whether jury instructions were proper and whether the damages award was excessive. The utilities argue the award is supported by evidence of defective work, including the removal of stainless-steel overlays and unsuitable metal in discharge ring extensions.

2

Toshiba settles for reduced amount

Possible Resolves by End of 2027

Discussed by: Court watchers noting the cost and risk of appeal

Toshiba could negotiate a settlement to avoid years of appellate litigation and the risk of a larger award with interest. The utilities have already spent more than $500 million on repairs and may accept a negotiated payment to resolve the dispute and move forward with the plant's restoration.

3

Sixth Circuit reverses or remands verdict

Unlikely Resolves by Q2 2028

Discussed by: Toshiba's legal team

Toshiba argued the verdict was legally excessive and that Michigan utility customers serving as jurors had a financial interest in the outcome. Judge Behm rejected both arguments, but the Sixth Circuit could take a different view on appeal, potentially ordering a new trial or reducing the award.

4

Parent guaranty case against Toshiba Corporation goes to trial

Likely Resolves by End of 2027

Discussed by: Consumers Energy and DTE Electric, in their February 2026 filing with the Michigan Public Service Commission

The court split the utilities' claim against Toshiba Corporation, which guaranteed its subsidiary's contract, from the claims against Toshiba America Energy Systems. That claim remains pending and covers the same damages plus legal costs, which the guaranty lets the utilities recover.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

December 2005

Taum Sauk pumped storage failure (2005)

On December 14, 2005, the upper reservoir dam at the Taum Sauk pumped storage plant in Missouri breached, releasing 1.5 billion gallons of water down the mountain. The plant, owned by AmerenUE, had been operating with faulty water-level sensors that failed to stop the pumps.

Then

The breach destroyed the reservoir and flooded Johnson's Shut-Ins State Park. No one died, but the plant was shut down for years.

Now

The plant was rebuilt and reopened in 2010 with redundant safety systems. The failure became a case study in pumped storage infrastructure risk.

Why this matters now

Like Ludington, Taum Sauk was a pumped storage facility where infrastructure failure had major consequences for the owner and the public.

2010-2013

San Onofre steam generator replacement (2012)

Southern California Edison replaced the steam generators at the San Onofre nuclear plant in 2010-2011. Within months, premature tube degradation forced the plant to shut down, and it was permanently retired in 2013.

Then

The plant never reopened, and ratepayers absorbed billions in costs for the failed replacement.

Now

The failure highlighted the risks of major component replacement at aging power plants and led to a $77 million settlement with federal regulators.

Why this matters now

San Onofre shows what happens when replacement equipment at a large power plant fails — the costs and shutdowns can be enormous, much like the Ludington overhaul.

Sources

(6)
Engineering News-Record MLive Jenner & Block U.S. District Court, Eastern District of Michigan U.S. District Court, Eastern District of Michigan Michigan Public Service Commission