PRASA To Pay $10 Million In Criminal And Civil Fines, Spend Nearly $1.7 Billion In Capital Improvements And Other Projects

The Puerto Rico Aqueduct and Sewer Authority (PRASA) entered into an agreement that called for PRASA to plead guilty to 15 felony counts of violating the Clean Water Act (CWA), the U.S. Justice Department and EPA announced on June 22. Under the plea agreement, PRASA will pay a criminal fine of $9 million -- the largest fine ever paid by a utility for violating the CWA.

The violations involve the illegal discharge of pollutants from nine sanitary wastewater treatment plants and five drinking water treatment plants. In addition, a comprehensive civil settlement was reached between PRASA and the federal government resolving repeated environmental violations at 61 wastewater treatment plants throughout Puerto Rico.

In the civil settlement, PRASA will spend an estimated $1.7 billion implementing capital improvement projects (CIPs) and other remedial measures at all of its 61 wastewater treatment plants and related collection systems over the next 15 years. To comply with the settlement, PRASA will complete 145 short-, mid- and long-term CIPs, which will include installing dechlorination equipment, installing flow-proportional chlorination equipment, repairing and replacing equipment, and implementing a chemical treatment program for phosphorous removal, among other steps.

"(These) criminal and civil actions are a landmark step in assisting PRASA, an offender with a pervasive history of violations, to comply with the Clean Water Act, a law that protects both the people and the environment of Puerto Rico from undue exposure to harmful pollutants," said Sue Ellen Wooldridge, assistant attorney general for the DOJ's Environment and Natural Resources Division. "We are pleased that we have reached a resolution to these matters, and that PRASA has agreed to make the necessary improvements and committed funds to ensure significant improvements to its wastewater treatment plants."

On the morning of June 22, the federal grand jury in San Juan returned a 15-count indictment charging PRASA with criminal violations of the CWA arising out of PRASA's role, as owner and operator, and its conduct in the operation and management of the wastewater and drinking water treatment systems in Puerto Rico. DOJ also filed a plea agreement with PRASA under which the utility will plead guilty to the indictment filed by the grand jury.

Under the plea agreement, PRASA will pay a fine of $9 million, complete capital improvements to the nine wastewater treatment systems for nearly $109 million, spend $10 million to correct the discharges to the Martin PeZa Creek, and serve a five-year term of probation. Further, under the agreement, PRASA is required to fully comply with the terms in the civil consent decree and has agreed that the court may extend PRASA's term of probation, with all available sentencing options, to ensure that PRASA comes into substantial compliance with the conditions of probation.

The civil settlement resolves allegations that: PRASA violated pollution discharge permits issued by EPA under the CWA; failed to properly operate and maintain all 61 treatment facilities; and discharged raw sewage from seven collection systems in violation of the CWA. In addition to the nearly $1.7 billion in capital improvements and other remedial measures, PRASA will pay a $1 million civil penalty and implement a supplemental environmental project at an estimated cost of $3 million. The project requires PRASA to provide sewer service to at least one community on the island that has not been connected to PRASA's facilities.

The consent decree is subject to a 30-day public comment period and is available on DOJ's Web site at http://www.usdoj.gov/enrd/open.html and on the EPA Web site at http://www.epa.gov/compliance/resources/cases/civil/cwa/ prasa060706.html.

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