Sometimes, Settlements Really Are Win-Win Propositions: An Innovative NDPES Settlement That Works For Everyone

I don’t normally blog about cases in which I’m involved, but since this one made the front page of the Boston Globe, I suppose it’s sufficiently newsworthy. Yesterday, EPA announced that a settlement had been reached among EPA, MassDEP, our client GenOn Kendall, and the Charles River Watershed Association and the Conservation Law Foundation concerning the NPDES permit for Kendall Station. As a result of the settlement, when all the equipment needed to implement it has been installed, both the water intake and discharge and the thermal load will be reduced by over 95%.

How will this be accomplished? Installation of certain new equipment at Kendall Station and a new steam pipe across the Charles River will allow facility to sell more steam to Boston and avoid putting excess heat into the River. As a result, not only will the impacts on the River be reduced, there will be collateral air emissions benefits, as Kendall’s clean gas displaces fuel oil as a source of steam in Boston.

Credit in the first instance has to go to our client, GenOn, for thinking creatively about how to respond to the problem posed by the very restrictive conditions imposed in its 2006 NPDES renewal. GenOn firmly believed that it had strong technical arguments with which to dispute the permit terms. Rather than focusing on those arguments, however, GenOn instead worked to figure out a solution that will allow the plant to remain economic, while addressing the concerns of the regulators.

Credit also goes to EPA Region I and MassDEP, both of which responded enthusiastically and constructively to GenOn’s proposal. Notwithstanding the win-win nature of the solution, the negotiations were complicated and the permit is extremely complex. However, the agencies kept their eyes on the prize.

Finally, credit also goes to the Charles River Watershed Association and the Conservation Law Foundation. Both of them had appealed the original permit, arguing that it was not sufficiently stringent (well, they are environmental NGOs). They could have tried to play bad cop to the agencies’ good cop. After all, it may take until 2016 until all the new equipment is in place and operational. CRWA and CLF could have used this delay to extort more from GenOn. In fact, while GenOn was pleased to contribute $250,000 to a fish restocking effort in the Charles River that CRWA will help implement, CLF and CRWA cooperated fully in the final settlement.

One aspect of the settlement is particularly worth noting. As discussed, the settlement works because Kendall Station is in an urban location and has a market for additional steam. Many commentators have discussed the important role of combined heat and power in helping achieve the nation’s environmental goals. Not everything is going to be solar and wind. Clean gas facilities that can sell steam will be a major contributor over the coming decades. Often, environmental justice concerns are raised with respect to urban power plants. There ain’t no such thing as a free lunch. If we want CHP, then we have to put the power where there’s a market for the steam.

However, that full rant can wait for another day. Right now, as Peter Shelley of CLF said in the Globe, “this solution is the type of thing that makes you feel good.”