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Massachusetts Gas Plant Owner, Managers Plead Guilty to Tampering & False Reporting

Berkshire Power Co. (BPC) and Power Plant Management Services (PPMS) agreed to plead guilty and pay $8.5 million in fines on felony charges that workers tampered with emissions control monitors and submitted false information at a gas-fired plant in Massachusetts.

BPC owns the Berkshire Power Plant and PPMS manages it. Both companies agreed to plead guilty to charges that they tampered with the equipment and related false emissions reporting between January 2009 and March 2011. PPMS also agreed to plead guilty to charges 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.

During the two-year time frame, BPC engaged PPMS to manage the plant, including overseeing day-to-day operations and maintenance and to act as the owner’s representative for the plant. A PPMS employee served as the Plant General Manager and BPC’s on-site representative. BPC also retained Wood Group during that time to provide the day-to-day plant operation and maintenance.

Documents say PPMS and BPC caused Wood Group employees at the plant to intentionally bias the plant’s Continuous Emissions Monitoring System so it would show lower emissions levels than were actually being produced. The companies then used that data to file required emissions reports with the U.S. Environmental Protection Agency and the Massachusetts Department of Environmental Protection. The tampering occurred to avoid shutting down the plant and losing revenues in order to install emissions controls or reducing power production to stay within emissions limits.

During the course of the tampering investigation, investigators also learned that PPMS made and caused staff at the plant to falsely claim to ISO-New England that the plant was available to produce power when it wasn’t in order to maximize plant revenues and minimize repair expenditures.

“The deliberate scheme Berkshire Power Plant management and staff undertook gave them an unfair competitive advantage over responsible companies, and undermined a system that depends on honest data reporting,” said Tyler Amon, Special Agent in Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Boston. “Maximizing profit to minimize the cost of controlling pollution is placing greed over protecting nearby communities. EPA will continue to pursue cases that maintain data integrity, so we can do our job to protect clean air.”

Under terms of the plea agreements, BPC and PPMS will pay a total of $4.25 million related to the criminal charges. BPC 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 for its wood stove change-out program. PPMS will pay $500,000 in criminal fines for the CAA and FPA violations and make a $250,000 community service payment to the American Lung Association’s wood stove change-out program. The two companies, along with the plant’s former O&M company, EthosEnergy Power Plant Services LLC (formerly Wood Group Power Plant Services LLC), will pay over $4 million in civil penalties. In addition to these fines, BPC and PPMS agreed to pay over $3 million plus interest to the Federal Energy Regulatory Commission in civil penalties and disgorgement for their misrepresentations to ISO-New England.

“Reporting environmental information accurately is essential to state and federal efforts to improve air quality. Cases where information is misrepresented will be pursued to the fullest extent to protect the integrity of our air quality programs,” said MassDEP Commissioner Martin Suuberg. “Some of the funds generated by this settlement will support innovative programs to improve air quality in the Commonwealth, including the woodstove change-out and electric vehicle subsidy programs.”

In February 2015, U.S. Attorney Carmen M. Ortiz filed charges against two former Wood Group employees who are accused of tampering with the equipment and ordering employees to do the tampering. Since Wood Group spearheaded the disclosure of the tampering conduct to the EPA and MassDEP and provided a high level of cooperation, the case against EthosEnergy will be resolved with a civil settlement.