The Guam Power Authority has reached a settlement agreement with the U.S. Environmental Protection Agency over Clean Air Act violations.
GPA has been negotiating with U.S. EPA since 2013 in an effort to avoid strict penalties which could have reached several hundred million dollars.
The settlement resolves the violations of federal regulations under the National Emission Standards for Hazardous Air Pollutants known as NESHAPs.
GPA was facing fines of up to $600 million for the emissions coming from the smokestacks at the Cabras power plant which have violated EPA standards for more than a decade.
However, GPA in a news release issued today, announced they will only have to pay a $400,000 civil penalty under the terms of a consent decree reached with U.S. EPA.
The settlement is between the U.S. EPA, the Guam Power Authority and Marianas Energy Company.
Part of the settlement agreement requires GPA to build a new, state-of-the-art power plant that burns ultra-low sulfur diesel. The plant must also be capable of converting liquefied natural gas through re-gasification to be burned as natural gas.
That plant and the financing for it have already been approved and the contract to build it has been awarded to the Korean Power Company which signed a contract with GPA last November.
GPA will retire some of its older power plants, re-power some of its plants with Ultra Low Sulfur Diesel and overhaul its fuel delivery system to convert from residual fuel oil to Ultra Low Sulfur Diesel as well as construct a 100-megawatt solar power plant and construct an energy storage system.
The U.S. Justice Department, on behalf of U.S. EPA, filed the consent decree in the U.S. District Court in Washington D.C. on Thursday, Feb. 6.
“GPA looks forward to relieving the United States’ concerns through this settlement,” stated GPA General Manager John M. Benavente.
“We believe this settlement is a fair resolution to the alleged violations and GPA will complete the work to satisfy the settlement terms, which will provide our ratepayers and the citizens of Guam with clean and green energy for years to come,” added Benavente.