CUC, EPA at odds anew over projects’ role

The Commonwealth Utilities Corp. and the U.S. Environmental Protection Agency are in disagreement again, this time over EPA’s role over the implementation of identified CUC projects with the upcoming selection of the Engineering and Environmental Management Company, which will have the power to expeditiously complete the projects.

CUC, through counsel James S. Sirok, has filed a motion, requesting the U.S. District Court for the NMI to clarify the court’s order as they relate to the management responsibilities of the EEMC over the various projects directed and mandated by “stipulated order number 2.”

Sirok raised the question before the court whether the EEMC order is to be construed to mean that the EEMC is responsible for the implementation and management of all EPA identified 13 SO2 projects during the term of its contract.

“The reason that CUC is raising the issue now is that it is crucial that all parties and the selected EEMC understand the scope of the EEMC’s duties and responsibilities prior to executing a contract to perform services under the order,” Sirok said.

The SO2 projects include the CUC pipeline; tank erection cleanout and testing; secondary containment; and used oil disposal, and others.

Sirok said under the provisions of the EEMC order, CUC believes that the EPA does not have the authority to micro-manage the SO2 projects and SO2 project management responsibilities of the EEMC.

In EPA’s response, U.S. Department of Justice Environmental Enforcement Section senior attorney Bradley R. O’Brien said CUC’s position that EPA does not have the authority to direct whether the EEMC, CUC, or EPA will implement SO2 projects is incorrect.

O’Brien said CUC’s self-described “13 SO2 projects” are not part of the EEMC order but are among the projects required under SO2, which the EEMC order expressly did not modify, preclude, or impact.

O’Brien said the EEMC order provides EPA general authority to prioritize projects, select the entity to implement the project, and oversee the work.

“As the regulatory environmental agency, the EEMC order provides EPA a substantial role in selecting the projects that will be implemented by the EEMC and overseeing how the work is implemented,” he said.

O’Brien said it appears that CUC is attempting to leverage the EEMC order to resolve CUC’s numerous contracting issues relating to its failures to implement SO2 projects.

O’Brien said CUC’s motion seeks to place CUC’s longstanding contract disputes involving numerous parties on the EEMC’s shoulders without the consent of the EEMC or the contractors.

“The impact of CUC’s position is not supportable and would result in imposing CUC’s contracts upon the court, the court’s relationship with the EEMC, and undermining available funding,” the EPA counsel added.

In CUC’s reply, Sirok said the conduct of “selecting” the projects that will be implemented by EEMC is drastically different than the conduct of “prioritizing” the projects that will be implemented by the EEMC.

“Simply put, there is no provision in the EEMC order which clearly states that EPA has the ability to unilaterally select which SO2 projects the EEMC will implement and manage,” Sirok said.

Last September, U.S. District Court for the NMI designated judge David O. Carter approved a settlement agreement entered by EPA, CUC, and the CNMI government that will require the CNMI government to, among other things, deposit over $22.8 million until 2018 to complete some stalled CUC projects.

The order gave parties 45 days to submit proposed potential EEMCs for court approval. The judge extended the deadline by an additional 23 days upon the parties’ request.

The appointment of EEMC shall be for five years, unless terminated earlier with the court’s approval.

From 15 interested candidates for EEMC position, EPA has reportedly narrowed down to three firms that are being provided for the court’s consideration.