Property Types

Electrical Cooperatives

Electric cooperatives (co-ops) are private, independent electric utilities owned by members that receive electricity. They can face many environmental exposures from using, storing, and transporting transformers and other electrical equipment, maintenance of electrical equipment and vehicles, electric pole storage, and operations at facility yards. Mineral oil is present in electrical equipment, subject to leakage or spills during operation, transportation, or storage. A release of fuels or hydraulic fluids used in vehicles or equipment or stored at facility yards can create environmental impacts. Additionally, the storage of electric poles can create environmental risks.

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Environmental Exposures May Include:

Substation Releases
PCB Contamination
Facility Yard Spills
Subsurface Seepage from Stored Inventory
Fleet Maintenance
Carbon Monoxide
Waste Management
Accidental Releases During Transport
Hazardous Chemical Seepage and Off-site Migration
Contaminated Soils
Underground Utilities
Pesticides and Herbicides
Illicit Abandonment
Fire Suppression Chemicals

Substation Releases

Substations typically contain large pad-mounted transformers, breakers, and other electrical equipment. The transformers located at substations can contain significant amounts of mineral oils. A leak or spill from this equipment can impact soil or groundwater or migrate in stormwater to nearby storm drains, drywells, or surface water bodies. Migration of contaminants off-site could result in third-party claims for cleanup, bodily injury, or property damage.

PCB Contamination

Pole-mounted transformers are located on electrical poles within the distribution network, and pad or pole-mounted transformers are located at customers’ facilities. Some older transformers in service may contain PCB-contaminated mineral oils. These transformers can become damaged in storms or other incidents and leak or spill transformer oils, resulting in environmental impacts, including at third-party-owned locations. Third parties could file claims for cleanup and property damage.

Facility Yard Spills

At facility yards, electric co-ops store many replacement transformers and other electrical equipment to replace damaged equipment in use. Storage of transformers and equipment at these facilities could lead to leaks and spills of mineral oils that could cause environmental risks.

Subsurface Seepage from Stored Inventory

Transformers and other electrical equipment removed from service require storage at facility sites and either are refurbished or require disposal. Spills or leaks of oils could occur during storage or refurbishing activities, which can migrate into the subsurface or collect in stormwater run-off, resulting in environmental impacts.

Fleet Maintenance

Equipment and vehicles utilized by electric co-ops are powered by diesel fuel or other petroleum products and utilize hydraulic fluids and lubricants. The fuels and maintenance fluids may be stored in containers, aboveground, or underground storage tanks. Also, waste oils and fluids may be generated from equipment maintenance. Leaks from equipment or storage areas or spills during refueling or maintenance can contaminate soil or groundwater or be carried by stormwater into storm drainage systems and migrate directly or indirectly to surface waters. Cleaning of vehicles or equipment may generate wastewater or sludge. Spills could occur during cleaning or from waste storage areas, creating environmental risks.

Carbon Monoxide

Vehicles and powered equipment, such as forklifts, trucks, and cranes, may be used in electric co-op operations. These types of internal combustion vehicles are powered by diesel or propane, which can emit carbon monoxide gas.

Waste Management

Waste transformer and motor oils, hydraulic fluids, wastewater, and sludge may be generated at electric co-ops. Improper waste disposal could lead to environmental liability or legal consequences for violating regulatory requirements.

Accidental Releases During Transport

Releases may occur during an accident involving a truck transporting transformers or other electrical equipment. The releases may migrate from the roadway and contaminate the surrounding area. The releases may also travel to shallow groundwater or surface water, such as lakes, rivers, streams, or creeks. A release to groundwater could potentially contaminate drinking water sources.

Hazardous Chemical Seepage and Off-site Migration

Electric co-ops store electrical poles used in their distribution system in storage yards. They also install or decommission old poles. The poles may be coated with pentachlorophenol, chromated copper arsenate, copper naphthenate, ammoniacal copper zinc arsenate, creosote, or 4.5-di-chloro-2-N-octyl-4-isothiazolin-3-one (DCOI). Excessive release of preservative solutions can occur from the poles. Suppose poles at the yard are not stored off the ground or over a low permeability surface. In that case, they can leach chemicals into soil or groundwater, potentially impacting drinking water sources. Chemicals can also migrate in stormwater to nearby storm drains, drywells, or surface water bodies. Migration of contaminants off-site could result in third-party claims for cleanup, bodily injury, or property damage.

Contaminated Soils

Excavations can be required to remove old poles or install new ones. Soil disturbance can occur, and erosion and sediment can migrate in stormwater to impact nearby surface waters. Contaminated soils could be present in the area of the poles from the leaching of wood preservatives, historical transformer leaks, or other causes. If not properly handled, contaminants could be spread. Improper waste disposal of contaminated soils could lead to environmental liability or legal consequences for violating regulatory requirements.

Underground Utilities

If not adequately marked, utility lines could be damaged during excavations, releasing sewage or natural gas into the soil, groundwater, or air and lead to third-party property damage or bodily injury claims and cleanup liability.

Pesticides and Herbicides

Pesticides or herbicides usage may control vegetation within transmission or distribution line rights-of-way. Pesticides or herbicides could be carried in winds or stormwater to impact third-party properties, natural resources, or surface water.

Illicit Abandonment

Illicit abandonment is the illegal dumping of pollutants on a property by a third party. It can occur at the facilities or in the right-of-way for electric lines of an electric cooperative. It can become the burden of the electric cooperative for cleanup and third-party bodily injury or property damage if law enforcement cannot locate the originator of the waste.

Fire Suppression Chemicals

Fires can occur in electrical equipment. Firefighting foam used to extinguish electrical fires can contain PFAS substances. Also, mineral oils can be leaked from equipment damaged in fires. Fire water run-off that contains pollutants can cause environmental impacts on and offsite.

Environmental Pollution Liability Can Provide Coverage For

Integrated GL/Site Pollution, options to include XS, Auto, and WC may be available

Monoline Site Pollution Liability

Third-party claims for bodily injury, property damage

First-party and third-party cleanup

Defense of third-party claims

Both sudden and gradual pollution conditions

Aboveground and underground storage tanks

Loading and unloading

Emergency response costs

Civil fines & penalties

Off-site services pollution liability

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Crisis/reputation management

Non-owned disposal sites

Natural resource damage

Illicit abandonment

Claims Scenarios & Examples

The electric co-op was in the process of upgrading a transformer at a customer’s facility. During removal operations, a pole-mounted transformer containing PCB oil was inadvertently dropped to the ground, causing a spill of PCB-contaminated oil. Ensuing investigations determined that contaminated soils had to be excavated and disposed of. The site owner filed a claim against the electric co-op for the resulting costs.
While installing the new utility poles, the electric co-op workers hit an underground sewer line with a drill, damaging the line and releasing raw sewage to the subsurface. The electric co-op was held responsible for the cleanup.
An electric co-op hired a contractor to control the vegetation on its electrical transmission line rights of way. A strong herbicide was applied using a truck-mounted sprayer, but winds blew the herbicide onto adjacent crop fields, severely damaging portions of the crop. The farmer filed a claim seeking damages against the contractor and the electric co-op.
An investigation of a former pole storage yard identified elevated levels of pentachlorophenol in soils. The electric co-op who owned the yard was forced to clean up the impacted soils.
During a flood, a truck carried by the flood water struck a utility pole, causing a transformer explosion that released carcinogens and smoke into homes in the area. The residents sued the electric co-op that owned the transformer for bodily injury and property damage.
A transformer fire occurred at an electric co-op’s substation facility. Firefighters used firefighting foam to extinguish the fire. Thousands of gallons of water and firefighting foam flowed off-site and into a nearby lake. High PFAS levels were later detected in the lake. The electric co-op was sued for natural resource damages.
A transformer located at a substation failed, releasing 13,500 gallons of mineral oil. The oil migrated off-site via a storm drain and impacted a waterfowl sanctuary, and an oil sheen was observed on a nearby river. The electric co-op was responsible for investigating the impacts and performing the cleanup. It also incurred civil fines.
Vandals breached a substation’s security fence and damaged five transformers, releasing mineral oils. The transformers were not provided with secondary containment, and the release impacted on-site soils and groundwater.

Final Consideration

Your business can be faced with the cost to defend yourself against allegations or legal action from pollution or professional related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with claims handling expertise.

This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC

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