Saturday, February 10, 2007

What Happened To English Station Site Remediation Funds?


Photo copyright Bruce Crowder 2007

Looming over the Mill River from its perch on a tiny man-made island, the English Station is a power plant with a history stretching back more than a hundred years. The plant powered New Haven through the second industrial revolution, generating electricity from coal since 1901 and then from oil for the last 30 years or so of its operation. The doors were finally closed in 1992 when it's owner, United Illuminating, decided that running the plant was simply no longer worth the expense.

United Illuminating "sold" the plant several years ago to a small up-start company called Quinnipiac Energy. I say "sold" because QE was actually paid $4.25 million to take the site off UI's hands. Part of the reason for the negative sales price was the fact that a $2 million clean-up was necessary before the site could ever be used. The facility was originally built in the 1880s out of muck dredged from the highly-industrialized river, used for decades as a coal storage yard and then hosted a fossil-fuel power plant for a century, so it is not surprising that soil sample tests didn't come out sparkling clean (click here for a summary of the contamination and a bit more history).

There is a sign hanging on the front gate of the plant claiming "Environmental Clean-up in Progress", but as far as I can tell the ground around the building has not been touched. Obviously samples have been taken and analyzed, but the sign has been up for 6 years now and the site shows no signs of any clean-up that I can see. What is most troubling about this is that the money that was to be used for the clean up is drying up.

"At the time of the sale, a fund of approximately $1.9 million, an amount equal to the then-current estimate for remediation, was placed in escrow for purposes of bringing soil and groundwater on the site into compliance with applicable environmental laws. Approximately $0.5 million of the escrow fund remains unexpended. QE’s environmental consultant reports that approximately $2 million of remediation remains to be performed." [UI SEC filing 11/3/06]


I tracked back through SEC filings and watched the fund deplete year by year, but the estimated remediation cost stayed put at $2 million. The way the laws in CT work, selling a property does not alleviate clean-up responsibility so UI is ultimately responsible for cleaning up the site, but what happened to the $1.1 million?

UPDATE:  From the latest SEC filing 3/31/09
A site on the Mill River in New Haven was conveyed by UI in 2000 to an unaffiliated entity, Quinnipiac Energy LLC (QE), reserving to UI permanent easements for the operation of its transmission facilities on the site.  At the time of the sale, a fund of approximately $1.9 million, an amount equal to the then-current estimate for remediation, was placed in escrow for purposes of bringing soil and groundwater on the site into compliance with applicable environmental laws.  Approximately $0.1 million of the escrow fund remains unexpended.  QE has since sold the property to Evergreen Power, LLC (Evergreen Power) and Asnat Realty LLC (Asnat).  UI is unaware of what agreement was reached between QE and Evergreen Power and Asnat regarding future environmental liability or what remediation activity remains to be undertaken at the site.  UI could be required by applicable environmental laws to finish remediating any subsurface contamination at the site if it is determined that QE and/or Evergreen Power and Asnat have not completed the appropriate environmental remediation at the site.  In July 2008, Evergreen Power and Asnat submitted a claim seeking compensation for environmental remediation on the property, including the existing building which remains on the site.   Based upon the current status of the evaluation, UIL Holdings has not recorded a liability related to this claim in its Consolidated Balance Sheet as of March 31, 2009.

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