PFAS Liability Does Not Have to Be a Transactional Deal Killer

Challenge

A client of TRC’s was in the process of selling a natural gas-fired power plant when, during due diligence, PFAS were discovered in the on-site potable well due to a historical release of aqueous film forming foam (AFFF) which had impacted the site subsurface soils and groundwater. The discovery of this environmental condition represented a material remediation liability and consequently posed a ‘material environmental defect’ in accordance with the transaction’s purchase and sale agreement.

Both the buyer and the TRC client selling the plant had to decide whether to terminate the deal or negotiate a liability resolution agreement. In order to preserve the TRC client’s risk mitigation strategy and establish a basis for resolution negotiations, the client asked TRC to quantify the extent of the investigation and remediation liability amongst developing state and federal PFAS regulations.

Solutions

TRC expedited the investigation and all state regulatory review processes to meet the demands of the deal schedule. TRC accelerated the remediation by proposing and gaining regulatory approval for interim actions including sequestration of PFAS impacted soil by asphalt and geosynthetic capping, excavation of a septic system and mound, potable well abandonment, natural attenuation of PFAS impacted soils and a contingency for a groundwater extraction treatment system.

To address long-term PFAS liability concerns necessary for the pending deal, TRC conducted proven remedy decision tree analyses and probabilistic cost modeling. The life-cycle of the remedy bracketed the site’s PFAS liability into a technically-sound and financially justified liability costing basis. The PFAS liability assessment was bundled with the ongoing site investigation and approved interim actions into a remediation plan that was reviewed and accepted by the buyer which ultimately saved the deal.

Benefits

TRC’s established working relationships with regulators and industry leading PFAS expertise gave the client the option of moving quickly through the developing PFAS regulatory process with certainty. Using TRC’s full life-cycle cost range quantification processes and output, the client was successful in negotiating the liability cost justification to reach a contract resolution. The transaction was resumed and ultimately a mutually accepted successful closure was reached in less than six months from the discovery date of the PFAS risk exposure.

• Asset Value – $100s of Millions of dollars
• PFAS Risk Liability Exposure – Millions of dollars
• Remedy Duration Evaluated – 25+ years
• Significant Cost Avoidance — $3-5M from interim action