Lubricants containing PCBs were once widely used in transformers, compressors and other machines mainly because of their fire-retardant properties. The EPA banned production of PCBs in 1978. Concerns about human health, and the extensive presence and persistence of PCBs and other chemicals in the environment led Congress to enact the Toxic Substances Control Act in 1976.

The violations – noted during EPA inspections of the companys facilities in 2005 and 2006 – included improper PCB disposal, storage, marking, recordkeeping and marketing at several of the utility companys facilities.

EPA Region 4 spokeswoman Jeananne Gettle told Lube Report that according to the consent agreement, MLGW routinely mixed transformer oil that contained PCBs with oil that didnt. The utility company then sold the co-mingled oil to companies that burned it as fuel, she added. The Toxic Substances Control Act requires that utilities dispose of transformer oils containing more than a certain PCB level via approved disposal facilities.

Under what the EPA calls a Supplemental Environmental Project, MLGW will launch a voluntary three-year, $10 million cleanup program to reduce the number of transformers and capacitors, and the amount of transformer oils, that contain regulated quantities of PCBs. Weve got some older equipment in our system, and were going to replace them with newer transformers that are PCB-free, company spokesman Chris Stanley told Lube Report.

The Memphis utility company said phase one will involve replacement of at least 880 transformers as well as removal of 2,859 large high-voltage PCB capacitators located inside substations. The cost is built into the utilitys capital budget, with the project starting in 2009.

According to EPA, the program will remove more than 1.2 million pounds of PCBs from the environment.