November 7, 2008
COMPLIANCE STATUS OF THE EXETER ENERGY
By: Paul Frisman, Principal Analyst
You asked about the Exeter Energy scrap tire-to-energy plant in Sterling. You are especially interested in the company's environmental compliance status.
EXETER ENERGY COMPANY
Exeter Energy Company operates a waste tire incineration plant in Sterling, Connecticut that burns about 10 million tires annually, generating between 29 and 31 megawatts (MW) of electricity (26 net MW after powering the plant.) The plant's two waste tire incinerator/boilers are major sources of sulfur oxide (SOx), nitrogen oxide (NOx), and hazardous air pollutant emissions, and must operate within DEP permit limits.
According to the Rubber Manufacturers Association, Exeter, built in 1991, provides the only large-scale end-use market for scrap tires in southern New England. It also serves as a major market for scrap tires from New York and northern New Jersey. Exeter is wholly-owned by CMS Energy, which is primarily a Michigan-based electric and natural gas utility.
An inspector from the Department of Environmental Protection's (DEP) Air Management Bureau visited the plant on March 5 and 14, 2008, and saw no visible emissions. Although one of the plant's two boilers was down for repairs, the inspector stated that the other was operating well within its permit limits for NOx, SOx, and hazardous air pollutants. The DEP inspector reviewed the annual compliance certification for 2007 where the company listed items that were in intermittent compliance. These included malfunctions that resulted in increased opacity (smoke density), problems with carbon monoxide, and other temporary problems. The inspector stated that Exeter dealt with these incidents in a timely manner. DEP is reviewing the opacity exceedances to see if they warrant issuing a notice of violation (NOV).
Between 1991 and 2006, DEP cited Exeter for numerous air pollution and hazardous waste violations. Specifically, DEP issued 21 NOVs for air pollution problems and one NOV for violating hazardous waste regulations. Issuance of an NOV puts the violator on notice, allows it to correct the violation or reduce its impact, and may result in compliance without further action. Action by the commissioner is not required.
The department issued two consent orders, one for violating air pollution regulations in 1992, and one for violating hazardous waste regulations in 2000. The commissioner may issue a consent order after negotiations with the violator. The consent order may include penalties and injunctive provisions. In some cases, DEP may include stipulated penalties for failure to comply with the order.
As a result of the 2000 consent order, Exeter paid a $21,148 fine and a civil penalty of $63,443, which DEP states Exeter complied with by recycling tires from distressed communities. This form of compliance, in which a violator may meet the terms of a civil penalty by completing an environmentally beneficial project, is called a Supplemental Environmental Project, or SEP.
DEP also referred two cases to the attorney general in 1992 and 1995 for violating air pollution regulations. A referral to the attorney general is the commissioner's formal request that the attorney general take legal action to recover penalties from, or seek injunctive relief against, a violator.
DEP reports that, following the 1992 referral to the attorney general, Exeter paid a $50,000 penalty and disposed of 75,000 tires from state facilities at a cost of $300,000 as its SEP. Following the 1995 attorney general referral, the company paid a $75,000 penalty and agreed to make $300,000 worth of plant upgrades as its SEP.
More information on Exeter Energy's parent corporation, CMS Energy, in available on-line at http://www.cmsenergy.com/. The company's financial information and its annual reports can be found on-line at http://phx.corporate-ir.net/phoenix.zhtml?c=101338&p=irol-reportsAnnual.