Railroads agree to $10.5 million share of lakefront Superfund cleanup costs
January 29, 2015
Xcel Energy has reached a $10.5 million settlement with a pair of railroad companies who are among the entities named in a lawsuit filed by Xcel asserting they share responsibility for contamination on the Ashland waterfront caused by activities that include a manufactured gas plant that operated for decades from the late 1800s until the 1940s at the site near Chequamegon Bay.
The railroads named in the 2013 lawsuit are the Soo Line and the Wisconsin Central Ltd.
According to historic records, Soo Line Railroad Company, and its predecessors, owned and controlled land and operated a railroad corridor at the site from at least the 1870s through 1987. The Wisconsin Central Ltd. acquired the existing rail corridor and related facilities in 1987. The Canadian National Railroad in turn acquired them in 2001.
Defendants remaining in the suit include the City of Ashland, Ashland County, and electrical contractor L.E. Meyers Co., which operated the manufactured gas facility for a few years.
According to the Internet legal resources website Law 360, the consent decree was filed last November 11. Xcel Energy announced it on Wednesday. The Law 360 report said as part of the decree, Northern States Power, a subsidiary of Xcel, would receive $6 million from the settlement, while $4.5 million would go to the federal government.
In 2011, the United States Environmental Protection Agency identified the two railroad companies, NSP-Wisconsin and the City of Ashland as potentially responsible for historic contamination at the site, and records indicate that there are other additional responsible parties. In 2012, NSP-Wisconsin was the only potentially responsible party to offer to perform and fund the on-land cleanup at the site.
“This settlement is another step to ensure that each
entity responsible will pay its fair share of the cleanup costs,” said Mark Stoering, president and CEO of NSP-Wisconsin. “We look forward to continued discussions with the other parties responsible for costs at the site.”
According to NSP-Wisconsin General Manager for Customer and Community Service David Donovan, the $10.5 million represents only a fraction of the total cleanup cost, which could exceed $100 million.
“It is a small portion, but it is one step of many in getting to those who contributed to the contamination, in our view, to pay their fair share,” he said. “This is a good settlement level.”
Donovan said he did not know what the implications of the settlement were for the city and county of Ashland.
“Right now I don’t know that it has much impact with regards to the litigation with the city and the others who are parties to the lawsuit,” he said. “We just think this is one step; we are continuing to work, to communicate and to try and come up with a settlement with the city and continue to do that. But I do not think there is any direct impact with the city at this time.”
Nevertheless, Donovan said it was fair to say that the size of the settlement was something for the other defendants in the suit to think about.
“It certainly adds to the discussion we will have with the city,” he said. “The city will have to make some determinations on how they view that settlement and how that will influence their discussions with us,” he said.
Donovan said the settlement with the railroads was settled primarily due to mediation efforts that helped the two parties to reach a mutually agreeable settlement
“Since we both agreed that this seemed to be a fair amount, we both settled at this time,” he said. “Could it have been larger if we had waited until the end, yes. Could it have been smaller if we waited until the end, yes, but this was somewhere tht we felt was in the middle and people on both sides thought it was fair.”
Ashland City Administrator Pete Mann said that the city has also been involved in settlement discussions with Xcel for about a year.
“I imagine it will continue right up until the eve of the trial,” he said. “I don’t know what implications the settlement with the railroad has with the discussions the city has Xcel.”
Mann said a dollar figure has been raised in those discussions by Xcel.
“But I’m really getting into territory that I shouldn’t be talking about,” he said.
Mann did say it is the city’s position that it has no liability at all in the case.
“Until Xcel starts realizing that, I guess there really is no point in talking about numbers,” he said.
The case goes to trial on April 27.