SALEM — A lot has been accomplished on Salem Harbor since Footprint Power began the permitting process for a new power plant in 2012, but some things haven’t changed. Yet another appeal by opponents of the gas-fired plant is winding its way through the court system.
Salem residents Jeffrey Brooks, William Dearstyne and Andrea Maubourquette and Marblehead resident Linda Haley are appealing to federal court, challenging the Prevention of Significant Deterioration air permit authorized by state environmental officials last year. Their previous appeal to the U.S. Environmental Protection Agency was unsuccessful.
The case was opened Nov. 28 after the EPA’s Environmental Appeals Board dismissed the complaint in September, and briefs are due March 2.
Scott Silverstein, president and CEO of Footprint Power, mentioned the appeal during an update on the plant’s progress with community leaders on Friday. A big difference this time, he said, is the litigation won’t hold up the project.
Multiple earlier appeals were made directly to the permitting agencies, he explained, and that delayed issuance of those permits. Now the permits are in place, and Footprint can continue construction unless a judge decides otherwise, he said. Opening of the new plant has already been delayed until 2017, Silverstein said, because appeals and court challenges slowed the process.
At this point, demolition of the old plant is nearly complete, he said, and thousands of tons of contaminated soil have been replaced with clean fill. In addition, a long-term tax deal is in place with the city, along with an extensive community benefits agreement. And last month financing was secured for the new, $1 billion power plant.
On Friday, when Silverstein met with the Salem Partnership board of directors to provide a project update, board president Jim Muise asked Silverstein if the hurdles and slate of legal challenges Footprint has faced the past three years has dampened their enthusiasm for this type of projects.
“It hasn’t dampened our enthusiasm at all,” he responded, adding that Salem was a “poster child” for what they wanted to do — find an old power plant and redevelop it into a state-of-the-art facility in an energy market in need of greater capacity. Footprint looked at the site for two years prior to acquiring it.
“This has emboldened us to go into other projects,” he said.
The project’s major investor, Highstar Capital — a division of Oaktree Capital Management — now has the controlling interest in the new plant, while Footprint Power retains a minority stake and is in charge of asset management and local commitments, such as turning the old coal pier into a working wharf and partnering with the city to create a port authority. Footprint will also remain the “public face” of the project.
He said Highstar’s investment is in the project, and therefore the permits and negotiated agreements with the city are still in place — they were all for the actual project, not Footprint Power.
That shouldn’t be a surprise, he said. Footprint made clear from the start that it would be seeking major investment partners. Operation of the plant once it’s online will similarly be shared among ownership interests.
Highstar, which specializes in energy, environmental services and transportation infrastructure across the United States and abroad, provided 87.5 percent of the equity necessary for construction. The remaining 12.5 percent was picked up by an affiliate of the Toyota Tsusho Corp., and a consortium of lenders provided $730 million in debt financing.
‘In our blood’
“We’re thrilled to be part of this project and this community,” said Andrew Nevin, a managing director at Highstar. “We were intrigued from the get-go. ... Power is in our blood.”
Nevin noted that Highstar has an extensive portfolio that includes acquiring, redeveloping and operating power plants here and abroad, and said the fund counts its energy projects among its most successful. He said a construction management team has been deployed to work with Footprint on the new plant.
Silverstein emphasized that Footprint still retains full control of the L-shaped, 40 acres of land surrounding the site of the new plant. That land will ultimately be developed and add to the city’s tax base, he said. Several interested parties have already contacted Footprint about parceling off the land, but any such plans will have to wait until the new plant comes online in 2017 and site access is no longer needed for construction.
Demolition of the old oil- and coal-fired plant began last July. Site remediation began in earnest in November, and 25,000 tons of contaminated soil has been shipped out on a barge.
Demolition is now finished for all areas south of the Fort Avenue entrance. The next phase of work, slated to begin in March, will shift to an area north of the main driveway to include the two remaining stacks, a boiler house, administrative offices and remaining outbuildings. Footprint plans to reuse a guard house and re-purpose part of a turbine building.
Silverstein said 43,000 tons of clean fill have arrived, and another shipment is due in a couple of weeks. This spring, remediation will focus on an old coal pile and a small area in the southwestern corner of the site. New construction will begin in the next few weeks when pilings are installed, he said.
You can reach John Castelluccio at 978-338-2527, email@example.com or via Twitter at @SNjcastelluccio.