An influential local environmental group and a New Jersey company on Tuesday settled a case over the siting of a natural-gas-fired power plant in Salem, an agreement that should allow the $1 billion project to move forward.
In the settlement with the Conservation Law Foundation, the power plant developer, Footprint Power LLC of Bridgewater, N.J., agreed to reduce greenhouse gas emissions annually over the life of the plant to meet the goals of a state law aimed at addressing climate change. Footprint also agreed to shut the plant by the beginning of 2050.
Greenhouse gases such as carbon dioxide, which are produced by burning fossil fuels such as natural gas, coal, and oil, are considered major contributors to rising global temperatures. The Conservation Law Foundation last year filed suit with the state’s Supreme Judicial Court to block the plant, arguing that state regulators had not sufficiently weighed the impact of its emissions on achieving the greenhouse gas reductions mandated by state law.
Conservation Law Foundation officials said the settlement helps regulate the growing use of natural gas so it furthers, rather than undermines, clean energy goals. The group believes this is the first time a new gas plant in the United States has been subjected to annual greenhouse gas reduction requirements.
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“It’s critically important to bring any natural gas infrastructure into alignment with our climate objectives,” said Sue Reid, director of the Conservation Law Foundation in Massachusetts.
Scott Silverstein, Footprint Power’s chief operating officer, said the negotiations with the Conservation Law Foundation brought both parties to “a good place.” The settlement should allow the company to complete the plant by 2016, as scheduled.
“The challenge was how do we take a good project and make sure that the yardstick that it is going to be measured against is appropriate,” Silverstein said. “The emissions reduction planthat we included there is that yardstick.”
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The parties have asked the state’s Energy Facilities Siting Board, which oversees the siting of power plants, to approve the settlement. It was unclear Tuesday when the board might act.
The new natural gas plant will replace a 63-year-old coal- and oil-fired facility, Salem Harbor Power Station, which is scheduled to close in June. Footprint bought Salem Harbor in 2012 from Dominion, a Virginia-based energy company.
The new gas plant is expected to occupy less than one-third of the land used by the coal plant, opening acres of prime waterfront land to development. Salem city officials have talked about a harbor walk, larger wharf, and expanded facilities for ferries, fishing vessels, and cruise ships.
When the Conservation Law Foundation filed suit to block the new plant, ISO New England, the region’s grid operator, warned that without a replacement for the coal plant, Boston and northeast Massachusetts could face a shortage of generating capacity that might lead to rolling blackouts.
“The ISO took no position on the merits of the case,” spokeswoman Marcia Blomberg said in an e-mail. “Our concern was to have it resolved quickly, given the need for new resources to meet demand for electricity in Greater Boston and the region as a whole.”
Dan Dolan, president of the New England Power Generators Association, a trade group, said he was happy to see a settlement that would allow the project to move forward, but worried about the 2050 expiration date on the plant.
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“That’s frankly something that we’re going to have to take a closer look at,” he said. “What are the implications there?’
In addition to requiring emissions reductions from the Salem plant, the settlement also included a few promises from the state, including up to $6 million total for Holyoke, Salem, and Somerset, which host coal plants. The money would be used to promote the use of renewable energy technologies.
The state also said it will come up with a plan to address thousands of leaky natural gas pipelines that release methane, another greenhouse gas, into the atmosphere, and cost consumers who end up paying for gas they never receive.
“We support the proposed settlement agreement because it strikes a balance that will help us achieve both our long term environmental and economic objectives,” Barbara Kates-Garnick, the state’s undersecretary for energy, said in a statement.
Erin Ailworth can be reached at erin.ailworth@globe.com. Follow her on Twitter @ailworth.