GOVERNMENT REACHES $3 MILLION SETTLEMENT WITH PEPCO
OVER OIL PIPELINE SPILL IN MARYLAND

WASHINGTON, D.C. – The United States and the State of Maryland have reached a

$3 million settlement with Potomac Electric Power Company (PEPCO) and its pipeline operator, ST Services, to recover natural resource damages and assessment costs arising from an oil spill from a ruptured pipeline near PEPCO's Chalk Point Generating Station near Aquasco, Maryland. The spill occurred on April 7, 2000 and released 140,000 gallons of oil into Swanson Creek, a tributary of the Patuxent River, causing major injuries to wetlands, beaches, waterfowl, terrapins, and other natural resources.

The Justice Department, on behalf of the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Fish and Wildlife Service, and the Maryland Department of the Environment and Natural Resources have lodged a Consent Decree settling natural resource damage and cost recovery claims under which PEPCO and ST Services have agreed to pay $2,710,498 for projects identified in a joint federal-state "Restoration Plan and Environmental Assessment" and to reimburse $318,000 in remaining unpaid costs incurred in assessing the injuries caused by the spill. The restoration projects include the creation of new wetlands and oyster reef sanctuary, enhancement of shoreline habitat for diamond-backed terrapins, protection of ruddy duck nesting habitat, creation of canoe/kayak campsites, including a disabled-accessible canoe launch site, construction of a fishing pier, as well as other recreational improvements in the area.

"This important settlement recovers virtually 100% of the damages to natural resources caused by this tragic event," said Thomas L. Sansonetti, the Assistant Attorney General in charge of the Environment and Natural Resources Division. "We are pleased to have worked productively with both federal and state natural resource trustees to achieve this result, and we also want to acknowledge PEPCO's cooperative approach to the resolution of this matter."

The pipeline – owned by PEPCO and operated by ST Services at the time of the spill -- crosses several tidal rivers and tributaries connected to the Potomac and Patuxent Rivers and traverses through or near a number of environmentally sensitive areas, including wetlands, which serve as important habitat for many finfish and shellfish species and resident and migratory birds. The spill prompted emergency response from the U.S. Environment Protection Agency, the Coast Guard, Maryland Department of Environment and PEPCO, and was followed by an EPA emergency order requiring PEPCO to conduct oil recovery operations.

The Consent Decree was lodged on December 11, 2002 in the District Court for the District of Maryland. There will be a public comment period of 30 days.

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