When the Lights Go Out

The Summer of 2001 has brought to American manufacturers a new potential for crisis - the so-called "rolling blackout." As energy reserves in the Western United States dip to all-time record lows, companies, particularly in California, are on notice by energy providers that precious electrical power may be cut to key operations with little or no advance warning. Most companies likely to be affected by such blackouts realize the possible liability, such as economic loss when production equipment is involuntarily idled or the risk to worker safety when equipment suddenly shuts down. Little attention, however, has been paid to the environmental liability that can be associated with process and pollution control equipment upsets that may occur when there is an unexpected loss of power. It is this environmental liability, particularly the responsibility to federal and state environmental regulators for excess air emissions or water effluent discharges, that can remain with the company for years to come.

Environmental Liability

When electrical power is lost to a manufacturing facility, waste streams, particularly air and water, can be caught untreated within process units or pollution control equipment. Without power, air emissions controls and wastewater treatment systems simply cannot function properly or must be bypassed altogether. Thus, where process and control equipment is shutdown unexpectedly in mid-operation, the result may be a release, or "burp," of air emissions or water effluent caught in the system upon re-start that will exceed permit or regulatory limits.

Even worse, once the power is restored, the normal functionality of pollution controls can often take hours, and even days, to restore. For instance, air pollution control equipment, particularly oxidizers or chemical-based treatment units, require time to obtain a sufficiently high temperature to achieve necessary pollution reduction. During this time, emissions may remain above authorized levels.

Without power, air emission controls and wastewater treatment systems simply cannot function properly or must be bypassed altogether.

As many companies are painfully aware, federal environmental statutes authorize severe penalties for a violation of an air emission or water effluent limit. For example, under the Clean Air Act and Clean Water Act, federal and state regulators are authorized to seek a penalty of up to $27,500.00 for each day the facility is in violation of a limit. Moreover, the possibility of government enforcement remains with the facility for a full five years after the violation.

To many of us, the threat of a penalty for violations associated with a loss of electrical power during a rolling blackout is unjust. The loss of power to a facility resulting from an energy crisis is beyond the control of most facilities. Moreover, facilities experiencing loss of electrical power already suffer economically from loss of production; adding the cost of environmental violations that may unintentionally occur during a blackout contributes to the misery of doing business in a power-depleted state such as California.

The Malfunction and Upset Defenses

Luckily, under existing law, including policies and regulations of the U.S. Environmental Protection Agency (EPA), excess air emissions or releases of non-permitted water effluent associated with a loss of power can likely be excused as a "malfunction" or "upset."1 If so excused, the threat of future enforcement against a company is eliminated.

With respect to compliance with air emissions limits, EPA issued its "Policy on Excess Air Emissions During Startup, Shutdown, Maintenance and Malfunctions" in September 1982. Under this policy, the exemption for malfunctions has been very narrowly interpreted and requires that EPA, or the appropriate state or local regulatory agency, use an "enforcement discretion approach." Such an approach requires the facility to conclusively demonstrate to the regulatory agency that the excess emissions, although constituting a violation, were due to "a sudden and unavoidable breakdown of process or control equipment." EPA has also stated in no uncertain terms that most excess emissions are avoidable by proper design and operations, and that unless any such excess emissions can be documented to have been unavoidable, they do not qualify for any relevant malfunction exemption. Although the policy refers to periods of startup and shutdown, unless any excess emissions occurring during such periods were caused by a sudden and unavoidable breakdown, or otherwise could not have been avoided by careful planning, operation and design, they will also not be excused.

Once the power is restored, the normal functionality of pollution controls can often take hours, and eve days, to restore.

With respect to water effluent limitations, EPA regulations provide an affirmative defense for non-compliance with technology-based permit limitations where the facility demonstrates that the non-compliance was due to an "upset." EPA defines an "upset" as "an exceptional incident in which there is a temporary and unintentional noncompliance with permit effluent limitation because of factors beyond the reasonable control of the permittee." Upsets may be caused by external events, such as power failures or storms or by unpreventable failures of control equipment. Non-compliance, however, due to operational error, inadequate design of process or control equipment, lack of maintenance or careless operation, is not excusable as an upset.

In determining whether an exceedance of an air or water limitation is excusable, companies should be aware that many state and local regulatory agencies have adopted malfunction and upset defenses similar to those established by EPA into their pollution control statues, ordinances and regulations. This includes state and local agencies responsible for air and water permits, and notably, many sanitation agencies where there are industrial wastewater discharges to local sewers.

Managing Blackouts

Although the law provides for a malfunction/upset defense, if a company simply believes that a violation during an electricity blackout is de facto (existing in actual fact though not by legal establishment) excused, then the company is wrong. Under existing law, the burden is solely upon the company to demonstrate to regulators that the violation was caused by an unintentional, sudden and wholly unavoidable event. Since the company may be asked to explain a violation during a blackout many months, or even years, after it occurred, good environmental management calls on careful documentation of the event. Indeed, such documentation, and often reporting of the violation, is required under the law.

To maximize the likelihood of defending a blackout related violation, a company should consider taking the following action:

Luckily, under existing law, excess air emissions or releases of non-permitted water effluent associated with a loss of power can likely be excused as a "malfunction" or "upset."
  • Familiarize key employees with the statutes, ordinances, regulations and policies of relevant state and local regulatory agencies to determine if there are applicable provisions, in addition to those established by EPA, to address malfunctions and upsets. If the facility discharges wastewater to a sewer, then be sure to inquire with the local sanitation district as well.
  • Maintain a contemporaneous malfunction/upset log. Document that an event has occurred and the reason for the event (e.g., a power outage due to a local blackout). Be sure to note at the time of the event that process and control equipment were otherwise being operated properly. Keep in mind that this type of documentation is required by many agencies, including under EPA regulations excusing violations of water effluent limits during upsets.
  • Determine whether there is also a legal requirement to report the event to any agency. For instance, EPA requires that all upset conditions be reported to the local agency responsible for issuing water discharge permits within 24 hours. Many local sanitation districts also require notification if the violation involves wastewater discharged to a sewer. Also, if the pollutant being released into the air or water is subject to notification requirements under the federal Emergency Planning and Community Right to Know Act (EPCRA), it will be necessary to determine if the applicable reportable quantity (RQ) for that pollutant was exceeded. If so, additional reporting requirements may apply.
  • Evaluate whether the company can take reasonable preventive steps to avoid violations at the facility during a blackout. For example, it may be reasonable to install a back-up energy source, such as a diesel-fired generator, to allow the facility to avoid a shutdown or to take process and control equipment off-line more systematically when the power goes out. Interestingly, EPA has previously taken the position that where a facility commonly experiences electrical outages, back-up power supplies are required to avoid violations. Hopefully such a harsh position will be unlikely from EPA where violations occur as a result of a state or regional power crisis.
  • Finally, when a violation does occur, take action to ensure that the amount and duration of the excess air emissions or release of water effluent is reduced to the maximum extent possible. In other words, once the power is restored to the facility, give equal priority to placing control equipment back on-line as to recommencing production.


While rolling-blackouts undoubtedly impact facilities in the power-starved West, if proper environmental management is employed, companies should be able to find their way through the dark without incurring environmental liability. To do so, however, the burden is on the company, and in particular those within the company responsible for environmental management, to take steps necessary to ensure that the malfunction and upset defenses will undoubtedly apply to any violation that may occur during a blackout. In short, when the power does go out and production is interrupted, it certainly is not the time for environmental management to go out as well.


The term "malfunction" is generally used by EPA with respect to the breakdown of air pollution control equipment; for water effluent controls, the term "upset" is used by EPA.


EPA Malfunction Policy -- es.epa.gov/oeca/ore/aed/comp/ccomp/c5.html
EPA Upset Rule (40 CFR 122.41(n)) -- frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=40&PART=122&SECTIO N=41&YEAR=2000&TYPE=TEXT
California Daily Power Conditions and Black-out Alerts www.caiso.com/SystemStatus.html

This article originally appeared in the 01/01/2002 issue of Environmental Protection.

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