A lawsuit in which New England Power Company, now National Grid, sought more than $100 million in damages from a terminated power contract with Norwood may finally be over.
The Board of Selectmen, acting as the town's electric light commissioners, has reached a tentative settlement with the power company that will end the dispute over how much interest the town owes the power company on a U.S. First Circuit Court of Appeals ruling that the town owes $78 million to New England Power Co. for breaking a contract with the energy provider in 1998.
"We are waiting on the final paperwork to come back (from power company lawyers) and once we sign that, we can release all the details," said selectmen Chairman Bill Plasko said Monday.
The power company has appealed to the Federal Energy Regulatory Commission that it is also owed 18 percent interest dating back to 1998 in the $78 million ruling, a figure that could boost the overall damages close to $110 million.
In May 2007, Town Meeting authorized the borrowing of up to $80 million to pay damages to the company, and Plasko said that will be sufficient to pay the settlement amount.
"This settlement is well within that authorization," said Plasko.
Plasko said town officials tried without success on numerous occasions to negotiate a settlement.
"As recently as December or January, we made an attempt to see if we could negotiate something and we never heard back," said Plasko.
But last month, power company officials reached out to the town and the two sides began negotiating. Plasko said he expected to get a final ruling from the regulatory commission within the next few months, which may have spurred the negotiations. Plasko also believes that efforts of U.S. Rep. Stephen Lynch, D-9th, and U.S. Sens. John Kerry and Edward Kennedy, who intervened on the town's behalf asking the commission to reduce the interest claims, may have helped.
Plasko said he's hopeful to have the final deal signed by the June 30 Board of Selectmen meeting.
"We feel like it's a good deal for the town because it removes a potentially large liability, and it's a good deal for them because they get their money, and they get it faster," said Plasko. "And it will be nice to finally be done with this."
Norwood General Manager John Carroll told Town Meeting members last month that, despite the large amounts of money involved, he believes selectmen in 1998 made the right decision to leave New England Power and get a new electric contract.
"This was not a $100 million mistake," said Carroll.
He said he still believes the power company breached the contract by selling off its generation plants. Carroll said that getting out of the contract saved the town and ratepayers millions.
Carroll said surrounding towns have an average monthly electric bill of $106, while Norwood residents pay $64 a month.
He also said the Electric Light Department makes roughly $4 million in profits every year that go directly into the town coffers.
Daily News staff writer Brian Falla can be reached at 781-433-8339 or at bfalla@cnc.com.
