Power Plant Companies Fined $8.5M for Emissions Violations, False Reporting

A power plant owner and its management company in Massachusetts have agreed to pay $8.5 million and plead guilty to tampering with emissions equipment and submitting false information to environmental and energy regulators.

US attorney Carmen M. Ortiz and Massachusetts attorney general Maura Healey announced the settlement on March 30, following a joint federal and state investigation of the Berkshire Power Plant in Agawam, Massachusetts.

Berkshire Power Co., the owner of Berkshire Power Plant, and Power Plant Management Services, the plant manager, agreed to plead guilty to felony charges that they violated the federal Clean Air Act.

These charges arose from air pollution monitoring equipment tampering and related false emissions reporting between 2009 and 2011. Power Plant Management Services also agreed to plead guilty to charges that it violated the Federal Power Act — the first-ever criminal charges under this statute — for making false statements to the regional power grid administrator, ISO-New England, regarding the plant’s availability to produce power.

“Fraud against the commonwealth is very serious and will be aggressively prosecuted, criminally and civilly, by this office, especially when the consequence of the fraud is to expose the public to health and safety risks,” Healey said in a statement. “This type of conduct cannot be tolerated.”

The Berkshire Power Plant settlement comes a day after Healey announced Massachusetts will investigate whether ExxonMobil lied to the public and investors about climate change risks to its business, joining New York and California in investigating the oil giant.

In the Berkshire Power Plant case, Massachusetts and federal officials say employees tampered with the air pollution monitoring equipment to conceal the fact that the plant was emitting air pollutants in excess of permitted levels. They did this by biasing the plant’s continuous emissions monitoring system so it would show lower emissions levels than were actually being produced. Berkshire Power and Power Plant Management Services then used this inaccurate data in filing required state and federal emissions reports.

Officials say the reason the power plant owner and operator did this was to save money: reducing the power production to stay within the plant’s emissions limit would have resulted in lost revenues; taking the plant out of service to implement needed repairs would have cost additional money.

Under the terms of the plea agreements, Berkshire Power and Power Plant Management Services agree to pay a total of $4.25 million related to the criminal charges. Berkshire Power will pay $2.75 million in criminal fines for the Clean Air Act violations and make a $750,000 community service payment to the American Lung Association to fund a program for the replacement of polluting wood burning stoves in western Massachusetts. Power Plant Management Services will pay $500,000 in criminal fines for the Clean Air Act and Federal Power Act violations and make a $250,000 community service payment to the American Lung Association’s wood stove change-out program.

Between them, Berkshire Power, Power Plant Management Services and the plant’s former operation and maintenance company, EthosEnergy Power Plant Services, will also pay more than $4 million in civil penalties. EthosEnergy will pay a $1.1 million civil penalty, and make a $200,000 payment to fund the installation of electric vehicle charging stations in the commonwealth.

In addition to the criminal fines, Berkshire Power and Power Plant Management Services have agreed to pay about $3 million plus interest to the Federal Energy Regulatory Commission in civil penalties and disgorgement for their misrepresentations to ISO-New England regarding the plant’s availability to produce power.

For additional reading on environmental reporting, please refer to the following links: 
Down to Size: How to Manage the Big Data Behind Your Environmental Sustainability Reporting 
Setting Emissions Reduction Targets within the Corporate Sector – Part 3 
Sustainability Reporting: An Important Tool in Promoting Corporate Responsibility