The Arkansas River Power Authority (ARPA) on Feb. 28 filed suit against Babcock & Wilcox Power Generation Group (B&W, NYSE: BWC) alleging B&W supplied a coal-fired boiler that never met its emissions guarantees.
ARPA said in the lawsuit that, because B&W failed to deliver a fully functioning boiler, they have been unable to operate the power plant and incurred substantial losses in the millions of dollars, including money spent to resolve operating deficiencies per B&W’s modifications to the boiler, fines and penalties paid to regulators for exceeding emissions and legal fees spent for environmental litigation.
“ARPA has $150 million of outstanding debt on a power plant that can’t operate because of B&W’s failure,” said Robert Freidenberger, ARPA’s board president. “The ARPA Board of Directors feel that B&W must be held accountable for its actions and the damage it has caused the ARPA members.”
Construction on the plant began in 2004. Initial costs were $40 million in 2003 but have since increased to more than $170 million, according to The Pueblo Chieftain. ARPA provides power to five municipalities in Colorado. A sixth asked to drop its membership due to the high costs of the plant, the article said.
B&W said the company does not comment on pending litigation.
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