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LONG BEACH : City, Builder Settle Suit Over Energy Plant

March 03, 1994|JOHN POPE

The City Council agreed Tuesday to accept a $16-million settlement from the builder and the operator of a city refuse-to-energy plant to resolve a lengthy legal dispute.

Under the settlement, Pittsburgh-based Dravo Corp. agreed to pay the city $6 million now and another $4 million in monthly payments over several years. The plant's operator, Montenay Pacific Power Corp., agreed to make $6 million in additional repairs to the facility.

Dravo also agreed to dismiss a countersuit seeking $17 million in unpaid bills for the construction project. A federal judge must approve terms of the agreement.

Long Beach sued Dravo in 1989, contending the city was losing millions of dollars a year because the plant, which began operation in 1988, was not producing enough energy. Long Beach sought damages of $49 million for alleged design and construction problems.

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