The owner and management company of the Berkshire Power Plant—a 252-MW natural gas–fired combined cycle plant located in Agawam, Mass.—agreed to plead guilty on March 30 to felony charges that the companies violated and conspired to violate the federal Clean Air Act.
The indictments against Berkshire Power Co. (BPC), the owner of the plant, and Power Plant Management Services (PPMS), the plant manager, stem from tampering that occurred between 2009 and 2011 on air pollution monitoring equipment and the related false emissions reporting that resulted.
A Culture of Deception
According to documents filed in federal and state court, between January 2009 and March 2011, BPC engaged PPMS to manage the Berkshire Power Plant, including overseeing day-to-day operations and maintenance and acting as the owner’s representative for the plant. A PPMS employee served as the plant’s general manager and as BPC’s onsite representative. BPC also retained Wood Group Power Plant Services (now EthosEnergy Power Plant Services) during that same time to provide the day-to-day plant operations and maintenance services.
The Department of Justice press release suggested that Fred Baker, the former operations and maintenance manager at the plant, and Scott Paterson, a former instrument and control technician, were intimately involved in the deception. During the time in question, Baker allegedly instructed Paterson and other operators at the facility to tamper with the plant’s continuous emissions monitoring system (CEMS).
The CEMS is an environmental monitoring system, required by federal law, which continuously samples, measures, and records the concentration of regulated pollutants. Baker, Paterson, and others at the Berkshire plant presumably tampered with the CEMS to save money, delay repairs, and avoid reporting to federal and state regulators that the plant, at times, was releasing pollutants—specifically, nitrogen oxides in this case—in excess of regulatory limits.
Initially, the defendants are said to have lowered the CEMS monitors’ readings by approximately 0.5 parts per million (ppm). In the summers of 2009 and 2010, when the plant underwent required independent audits of the pollution monitoring equipment, Baker instructed Paterson to take out the fraudulent adjustments in the monitors prior to the audit and reintroduce them after the auditors had left. Paterson is believed to have made the fraudulent adjustments prior to, and after, each independent audit. The Berkshire plant was required to, and did, report the results of these audits to the Massachusetts Department of Environmental Protection and to the U.S. Environmental Protection Agency (EPA).
In 2010, the 0.5-ppm adjustment was allegedly not sufficient to allow the plant to run at full power and comply with the facility’s Clean Air Act permit. Rather than doing the necessary repairs to the plant and its environmental pollution control equipment, or running the plant at lower power levels, Baker is believed to have instructed staff, including Paterson, to lower the CEMS readings even more to avoid reporting pollution emissions.
“Berkshire Power Plant management and staff had institutionalized a deliberate scheme to evade compliance with the Clean Air Act by altering their emission monitoring equipment as it suited them and not the law,” said Tyler Amon, special agent in charge of the EPA’s Criminal Investigation division in Boston.
Paying the Price for Cheating
In light of the fact that Wood Group spearheaded the disclosure of the tampering conduct and provided a high level of cooperation during the case, the case against EthosEnergy is being resolved with a civil settlement.
During the course of the tampering investigation, criminal investigators also learned that PPMS made, and caused staff at the plant to make, false statements to the ISO-New England (ISO-NE) about the plant’s availability to produce power for the New England grid. It also caused staff to falsely claim to the ISO that the plant was available to produce power when it was not. The company’s motive was apparently to maximize the plant’s revenues and to minimize repair expenditures. Therefore, PPMS also agreed to plead guilty to charges that it violated the Federal Power Act for making false statements to ISO-NE. These are the first-ever criminal charges under that statute.
“This resolution addresses a pattern of behavior by multiple persons and entities in obstructing the enforcement of laws designed to protect the air we breathe,” said U.S. Attorney Carmen Ortiz. “The comprehensive resolution, including the first ever criminal charges for false statements to the Federal Energy Regulatory Commission, demonstrates the seriousness with which we take conduct which undermines environmental compliance and the fair regulation of energy markets.”
Between them, BPC and PPMS will pay a total of $4.25 million in criminal charges and more than $4 million in civil penalties. EthosEnergy will pay a $1.1 million civil penalty and make a $200,000 payment to fund installation of electric vehicle charging stations in Massachusetts. BPC and PPMS have also agreed to pay $3,042,563 in civil penalties and disgorgement, plus interest, to the Federal Energy Regulatory Commission for misrepresentations provided to ISO-NE. According to the Department of Justice, both Baker and Paterson have also agreed to plead guilty to the charges they face.
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)