“Consistent with 40 C.F.R. § 22.18(b), for purposes of the proceeding, Respondent: admits the jurisdictional allegations of the CA/FO; neither admits nor denies specific factual allegations contained in the CA/FO; consents to the assessment of any stated civil penalty, and to any conditions specified in the Consent Agreement; and waives any right to contest the allegations and its right to appeal the proposed Final Order accompanying the Consent Agreement.”

💡 Sunrise Power admitted EPA had authority but did not formally admit wrongdoing, a common tactic in settlements.

“Under section II.C.2(c) (‘Loss of Mechanical Integrity’) of the Permit, if a loss of mechanical integrity becomes evident during operation or a significant change in the annulus or injection pressure occurs during normal operating conditions, the permittee must notify EPA and terminate injection activities immediately.”

💡 The permit explicitly required Sunrise Power to stop injecting the instant mechanical integrity was lost, but the company continued for nearly an hour.

“According to information submitted by Respondent to the EPA, on June 22, 2021, Respondent became aware that well WW3 had lost mechanical integrity from approximately 10:10 a.m. Pacific time, until injection was stopped at 11:05 a.m. Respondent subsequently estimated that it injected 12,667 gallons of fluids into well WW3 during this time.”

💡 The company’s own submission confirms it continued injecting for 55 minutes after discovering the well had failed.

“On June 22, 2021, injectate from well WW3 was observed rising to the ground surface and pooling within 30-40 feet of the well head.”

💡 The mechanical failure was so severe that industrial wastewater surfaced near the wellhead, demonstrating complete loss of containment.

“EPA alleges that Respondent violated the Permit and the SDWA by failing to maintain the mechanical integrity of well WW3, and for underground injection not specifically authorized by the Permit, as described above.”

💡 EPA formally alleged violations of federal drinking water law designed to protect underground water sources.

“Section 1421(d)(2) of SDWA, 42 U.S.C. § 300h(d)(2), provides that underground injection endangers drinking water sources if such injection may result in the presence in underground water which supplies or can reasonably be expected to supply any public water system of any contaminant, and if the presence of such contaminant may result in such system not complying with any national primary drinking water regulation or may otherwise adversely affect the health of persons.”

💡 The law defines endangerment broadly to include any injection that might contaminate current or future drinking water sources.

“Under Section 1423(c)(1) of the SDWA, 42 U.S.C. § 300h-2(c)(1), and 40 C.F.R. §19.4, EPA may assess a civil penalty of not more than $27,894 for each day of violation, up to a maximum administrative penalty of $348,671, for violations occurring after November 2, 2015, where penalties are assessed on or after December 27, 2023.”

💡 EPA had authority to impose penalties up to $348,671 but settled for only $55,788, raising questions about deterrence.

“In 2012, EPA received a timely application for renewal of a Class I UIC permit for the injection wells, including WW3. As EPA has not issued a new UIC permit to the Facility, the conditions of the expired Permit remained in effect at all times relevant to the alleged violations. See 40 C.F.R. § 144.37(a).”

💡 Sunrise Power operated for over a decade under an expired permit while EPA processed its renewal, creating regulatory limbo.

“Section 1423(c)(4)(B) of the SDWA, 42 U.S.C. 300h-2(c)(4)(B), requires the Administrator to take into account the seriousness of the violation, the economic benefit (if any) resulting from the violation, any history of such violations, any good faith efforts to comply with the applicable requirements, the economic impact of the penalty on the violator, and such other matters as justice may require, when assessing a civil penalty for violations of the SDWA.”

💡 Federal law requires EPA to weigh multiple factors including economic benefit to the violator when setting penalties, but the settlement amount suggests these factors did not result in a significant deterrent.

“Pursuant to the Permit, Respondent is authorized to inject cooling tower blowdown, plant area wash wastewater, demineralizer resins regeneration wastewater, plant and equipment drains wastewater, filter backwash wastewater, and non-oil contaminated storm runoff wastewater from the Facility into the Upper Tulare formation via the six specified injection wells, including well WW3.”

💡 The industrial wastewater that surfaced included cooling tower chemicals and other industrial contaminants that posed potential risks to groundwater.

“This civil penalty represents an administrative civil penalty and shall not be deductible for purposes of federal taxes. 26 U.S.C. § 162(f).”

💡 Federal law prevents Sunrise Power from reducing the financial impact by claiming the penalty as a tax-deductible business expense.

“The Parties agree that settling this action without the filing of a complaint or the adjudication of any issue of fact or law is in their interest and in the public interest.”

💡 EPA and Sunrise Power agreed to settle without filing a formal complaint or adjudicating the facts, allowing the company to avoid a formal finding of wrongdoing.

“Respondent shut-in well WW3 on June 22, 2021. Respondent also shut-in adjacent well WW4 on September 3, 2021, and completed abandonment of wells WW3 and WW4 on November 21, 2022. To replace these wells, Respondent installed new wells WW5 (authorized to inject on May 12, 2023) and WW6 (authorized to inject on September 21, 2023).”

💡 Sunrise Power abandoned both WW3 and an adjacent well, suggesting the mechanical problems may have been more widespread than a single well failure.

“On April 11, 2003, EPA granted Respondent’s request to increase the Maximum Surface Injection Pressure allowed under section II.C.4(a) of the Permit, from 75 psi to 180 psi.”

💡 EPA authorized Sunrise Power to more than double its injection pressure in 2003, potentially increasing the risk of mechanical failures.

“Pursuant to 31 U.S.C. § 3717 and 40 C.F.R. § 13.11, Respondent must pay the following on any penalty amount overdue under this CA/FO: interest accrued on any overdue amount from the date payment was due at a rate established by the Secretary of the Treasury pursuant to 26 U.S.C. § 6621(a)(2); the United States’ enforcement expenses, including but not limited to attorneys’ fees and costs incurred by the United States for collection proceedings; a $15 handling charge fee each month that any portion of the penalty is more than thirty (30) days past due; and 6% per year penalty on any principal amount ninety (90) days past due.”

💡 The consequences for non-payment are modest interest and fees, not substantial additional penalties that might ensure swift compliance.