Massachusetts power plant operator Salem Harbor Power Development LP on Tuesday asked a U.S. bankruptcy judge in Delaware to approve a $43 million settlement with federal energy regulators over construction delays at its natural-gas fired plant, Reuters reported. Salem Harbor said it had agreed to pay a $17 million civil penalty and to disgorge $26.7 million in profits as a result of a Federal Energy Regulatory Commission (FERC) investigation into its collection of payments meant to incentivize energy production. FERC had alleged that Salem Harbor took $100 million in payments, but failed to meet power generation commitments due to construction delays that prevented its power plant from opening on schedule. Salem Harbor did not admit wrongdoing, but said the settlement would avoid costly litigation in its bankruptcy case. Salem Harbor recently decided to pursue a restructuring that would hand its assets to secured lenders rather than finding an outside buyer, and it amended its chapter 11 plan of reorganization on Monday to remove references to a potential sale. The company will ask U.S. Bankruptcy Judge Mary Walrath on Thursday for her approval to begin soliciting creditor votes on the amended plan. Former construction partner Iberdrola Energy Projects Inc (IEP), which is attempting to preserve an arbitration award against Salem Harbor, objected to that request. IEP, which was hired to build Salem Harbor’s power plant in 2014 before the relationship soured, has been embroiled in litigation with the company since the 2018 termination of the construction agreement. Salem Harbor blamed IEP for rising costs and delays, and Iberdrola launched arbitration proceedings over the canceled contract, eventually winning a $236 million judgment against Salem Harbor.
