Judge approves settlement between Salem power plant owners, feds

Jul. 18—SALEM — A federal bankruptcy judge has signed off on a $43 million settlement between the owners of the former Footprint Salem Harbor power plant and federal regulators.

Judge Mary Walrath of the U.S. Bankruptcy Court in Delaware signed off on the settlement last week; it was entered on the court's docket Monday.

The settlement between the owners of the plant, now known as Salem Harbor Power Development, and the Federal Energy Regulatory Commission addresses allegations that the plant's owners withheld information about construction delays so that it could receive the first of a series of capacity payments.

The plant's owner was paid $104 million for a period of time in 2017 and 2018 before the plant was operational, according to findings of an investigation by regulators.

At that time, regulators alleged, the owners knew that progress on the plant had fallen significantly behind due to several issues, including a need to replace the engineering firm involved in the project and subcontractor issues.

Iberdrola Energy Products was hired to construct the new natural gas-fired plant on the site of a former coal-fired plant in 2014, but its contract was then terminated due to delays. Iberdrola later won a $236 million arbitration award over its termination. After that award was confirmed by a judge earlier this year, Salem Harbor filed for Chapter 11 bankruptcy protection.

The settlement calls for Salem Harbor, which does not have to admit wrongdoing, to pay a $17.1 million civil penalty and "disgorge" $26.7 million in profits.

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis