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Berkshire Power, services companies to pay over $8.5M to resolve criminal, civil charges

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Berkshire Power, services companies to pay over $8.5M to resolve criminal, civil charges

and twocompanies it hired to help run its Agawam, Mass., power plant have agreed toplead guilty to and/or pay fines stemming from allegations that they tamperedwith emissions equipment and submitted false information to the U.S. EPA andthe ISO New EnglandInc., Massachusetts Attorney General Maura Healey announced March30.

BerkshirePower and Power Plant ManagementServices LLC will plead guilty to felony charges that they violatedand conspired to violate the federal Clean Air Act by tampering with airpollution monitoring equipment and submitting false data regarding the plant'semissions levels between 2009 and 2011, according to a . PPMS also agreed to pleadguilty to criminal charges that it violated the Federal Power Act byintentionally misrepresenting the facility's availability to produce power tothe region's grid administrator in order to "maximize the plant's revenuesand to minimize repair expenditures," the attorney general's office said.

Underthe deals, Berkshire Power will pay $2.75 million and PPMS will pay $500,000 incriminal fines and will make contributions of $750,000 and $250,000,respectively, to the American Lung Association to fund a program for replacingpolluting wood burning stoves in western Massachusetts.

Healey'soffice also reported that yet another company — EthosEnergy Power PlantServices LLC, formerly Wood Group Power Plant Services LLC, which previouslyprovided operation and maintenance services for the approximately 245-MWnatural-gas-fired combined-cycle plant — entered into a consent judgment resolvingallegations that it violated Massachusetts public health law as a result of itsemployees' involvement with the emissions equipment tampering scheme. That dealprovides that EthosEnergy will pay a $1.1 million civil penalty and supply$200,000 to fund the installation of electric vehicle charging stations.

Atthe direction of Berkshire Power and PPMS, Wood Group employees tampered withthe plant's continuous emissions monitoring system to conceal that the plant'sair pollution emissions exceeded permitted limits, according to Healey'soffice. The purpose of the scheme allegedly was to avoid the plant's losingrevenue by reducing power production to stay within those limits or taking thefacility out of service to make needed repairs.

"Thisresolution addresses a pattern of behavior by multiple persons and entities inobstructing the enforcement of laws designed to protect the air webreathe," U.S. Attorney Carmen Ortiz said. "The comprehensiveresolution, including the first ever criminal charges for false statements to[FERC], demonstrates the seriousness with which we take conduct whichundermines environmental compliance and the fair regulation of energy markets."

Theviolations of the FPA also prompted a separate settlement, which FERCapproved March 30,requiring Berkshire Power and PPMS to pay a civil penalty of $2 million toresolve charges that they violated the ISO-NE's tariff and various federalregulations — including the commission's anti-manipulation rule — by schemingto defraud the grid operator. Berkshire Power also will disgorge slightly over$1 million, plus interest, and pay a monetary fine of $30,000 for violatingcertain mandatory reliability standards during the Jan. 1, 2008, to March 30,2011, time frame at issue.

Staffwith FERC's Office of Enforcement issued a notice in October 2015 alleging that BerkshirePower and PPMS violated the agency's rules, the ISO-NE's tariff and/or relevantreliability standards over a more than three-year period by "engaging in amanipulative scheme to conceal maintenance work and associated outages."In its March 30 order approving the resulting settlement of those allegations,FERC explained that it was tipped off by the U.S. Attorney's Office for theDistrict of Massachusetts, which itself was alerted after criminalinvestigators looking into the emissions scheme discovered the potential FPAviolations.

Accordingto FERC, staff's investigation identified "at least 16 separate periods ofsignificant maintenance-related outages" that went unreported during thetimeframe at issue, even while the plant's power and capacity were being bidinto the ISO-NE's markets.

"Individualsat the plant scheduled maintenance work for times when the plant was unlikelyto be dispatched and then failed to notify ISO-NE about the work or theassociated plant unavailability," the order noted. Moreover, a PPMSemployee serving as Berkshire's "projects general manager" instructedcontrol room operators to deliberately mislead the grid operator regarding theplant's availability if they received a dispatch call during one of theunreported outages.

FERCsaid the scheme continued even after that individual was informed that hisactions likely were illegal, and only stopped when he was removed from hisposition at the facility "due to discovery of potential violations offederal and state environmental laws at the plant." The commission notedthat the projects general manager — identified through various news sources asFrank Basile — died in December 2012.

Accordingto the SNL data, the ultimate owners of the Berkshire Power are and in a two-thirds/one-third split.