Environmental Due Diligence
In keeping with our proactive approach, we strive to address environmental, health, and safety issues before they become regulatory compliance and enforcement issues. To accomplish this, we work with clients during real estate and corporate and financing transactions and development of projects to identify potential environmental risks and liabilities. We also develop strategies to address identified issues and have experience in structuring and negotiating transactions to minimize and manage environmental liabilities.
A particularly useful tool in managing environmental, health and safety liabilities in Texas are audits conducted under the Texas Environmental, Health and Safety Audit Privilege Act (the “Audit Act”). The Audit Act encourages the use of voluntary audits to identify and remedy regulatory compliance issues. The Audit Act provides an immunity from administrative and civil penalties if violations are identified in an audit, voluntarily disclosed to the regulatory agency, and corrected within a reasonable time. Other states and also the federal government have similar policies and programs which encourage audits and self-disclosure. We have advised clients regarding their obligations under the Audit Act and similar state and federal programs and corrective action. We also regularly negotiate compliance agreements with TCEQ and other regulatory agencies as part of the disclosure of violations and also negotiate agreements among private parties, commonly as part of a commercial transaction, related to responsibility for and the correction of identified environmental, health, and safety issues.
- For the owner of a new natural gas-fired, combined-cycled power plant, we served as developer’s counsel for certain regulatory, project financing, and environmental matters, including providing a legal opinion to the lender regarding the developer’s compliance with all applicable state and local environmental permitting and regulatory requirements.
- For a client acquiring a 300 MW coal-fired power generation facility, we evaluated environmental liabilities prior to the acquisition, developed a strategy for an environmental audit under the Texas Environmental Audit Act, considered groundwater availability issues, and evaluated alternative fuel uses. We also assisted this client with all permitting and permit transfer considerations in acquisition of the assets, and prepared and filed all applicable PUCT and ERCOT registrations.
- We assisted a Texas-based utility in prudence reviews of a nuclear power plant investment and long-term purchased power contracts. Our representation included review and analysis of the prudence of that company’s decisions regarding construction of a nuclear power plant and a determination of how that nuclear investment would be treated in the utility’s rates.
- We have assisted chemical manufacturing and blending companies with placing their Texas plants under the Audit Act, providing counsel as to disclosures and necessary corrective actions and permitting strategy. We have also created detailed legal regulatory compliance charts to help ensure that the facilities will continue to meet state and federal regulations post-Audit.
- We advised the potential buyer of a natural gas storage facility on the environmental risks associated with the facility, identifying potential regulatory exposure associated with the permits before the TCEQ, EPA, and Railroad Commission of Texas