EA is retained by a confidential power client to provide on-call environmental risk management services. Since 2009, EA has provided environmental audit support and due diligence services at targeted facilities nationwide. We provide due diligence services in support of the client’s acquisition strategy. Typically, a “portfolio” of multiple power generating plants across multiple states is part of the deal. EA is included as part of the comprehensive due diligence assessment team to identify potential liabilities that may pose a “material impact” on the deal. Material impacts are usually defined as those environmental conditions that would require greater than $500,000–$1,000,000 to remedy. If the facilities are purchased, then EA performs comprehensive environmental compliance audits of the facilities to provide a baseline compliance assessment of the facility. To date, EA has evaluated over 200 power plants nationwide in Arizona, Alabama, California, Florida, Nevada, Connecticut, Kentucky, Illinois, Louisiana, Massachusetts, Michigan, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Virginia, and West Virginia.
Each assessment starts by reviewing all environmental and financial information provided in an “e-data room.” Site inspections with the deal team and a comprehensive report outlining not only items that may cause material financial impact, but also key environmental aspects of the operation, are prepared. Permit conditions, operational environmental aspects, and any item that may need to be managed post-acquisition were highlighted. EA’s primary focus is evaluating potential soil, groundwater, and surface water at the site. At the request of the client, EA will focus the assessment on certain potential liabilities such as pending Clean Air Act regulations (e.g., MATS, NAAQS, MACT), Clean Water Act regulations (e.g., 316[b]), FERC licensing requirements, and solid waste regulations (e.g., Coal Combustion Residual management). Experienced teams using uniform methodology allow for rapid assessment by the acquisition teams. EA also developed cost estimates bracketing material impacts in terms of high, medium, and low costs and the probability of incurring those costs for environmental conditions that may pose a material impact to the acquisition.
