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CLAIM SUMMARY / DETERMINATION FORM 

Date : 11/17/2008 

Claim Number : P05005-138

Claimant : Logan Generating Company LP 

Type of Claimant : Corporate (US) 

Type of Claim : Real or Personal Property 

Claim Manager : 

Amount Requested : $40,729.17

I. Background: 

Oil Spill Incident: On 26 November 2004, the Cypriot-flagged tank vessel ATHOS I struck a 

submerged anchor as it approached the CITGO Asphalt Refining Company terminal at 

Paulsboro, New Jersey. The anchor punctured the hull and caused the release of Venezuelan 

crude oil into the Delaware River. The FOSC issued a Notice of Federal Interest designating the 

vessel’s owner, Frescati Shipping Company Limited, as the Responsible Party (RP). The RP 

denied all claims under the Oil Pollution Act of 1990 (OPA). The NPFC advertised for claims 

relating to the oil spill, so claimants do not have to submit claims to the RP prior to submitting 

them to the National Pollution Funds Center (NPFC). 

Claimant: The claimant operates a coal-fueled, 218 megawatt (MW) cogeneration facility on 

the Delaware River. The power plant provides electricity to Atlantic City Electric (ACE) – and 

provides steam to Ferro Corp. Uncommitted capacity and energy beyond ACE’s requirements 

are made available in the regional wholesale market. The facility is 9.9 miles downriver from 

the location of the incident. 

Claim Description: The claimant alleges that the ATHOS I oil spill damaged its Reverse 

Osmosis (RO) membranes. The membranes are a part of the plant’s cooling water circulation 

system and are supposed to filter out salts and other impurities from the cooling water before it 

goes to the cooling towers. The claimant alleges that the oil contaminated these membranes 

forcing the claimant to replace them prematurely. The claimed amount represents the value of 

remaining expected useful service life of the membranes. 

Related Claims: The NPFC received one package of claimed costs. They were broken down 

into property damage and lost profits, with added assessment costs. The NPFC recognized that a 

portion of the claimed lost profits were more appropriately characterized as removal costs. 

Therefore, the NPFC divided the claims into three separate claims as follow: 1) P05005-137-

Lost Profits, 2) P05005-138-Property Damage, and 3) P05005-154-Removal Costs. 

APPLICABLE LAW: 

Claims may be presented first to the Fund if the President or his delegated representative has 

advertised or notified claimants that the Fund is accepting claims resulting from an oil discharge. 

33 U.S.C. §2713(b)(1)(A). 

The uses of the OSLTF are described at 33 U.S.C. §2712. It provides in relevant part that: 

“(a) Uses generally

The Fund shall be available to the President for –
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(4) [T]he payment of claims in accordance with section 2713 of this title for 

uncompensated removal costs determined by the President to be consistent with the National 

Contingency Plan or uncompensated damages; . . .”

Damages include damages for injury to natural resources, injury to or economic losses from the 

destruction of real or personal property, loss of subsistence use of natural resources, Government 

loss of revenues, loss of profits or earning capacity as a result of loss or destruction of real or 

personal property or natural resources, and costs of increased public services. 33 U.S.C. 

§2702(b). Damages are further defined in OPA to include the costs of assessing the damages. 

33 U.S.C. §2701(5).

Damage claims must be presented within 3 years after the date on which the injury and its 

connection with the discharge in question were reasonably discoverable with the exercise of due 

care. 33 U.S.C. §2712(h)(2).

Under 33 CFR 136.105(a) and 136.105(e)(6), the claimant bears the burden of providing all 

evidence, information, and documentation deemed necessary by the Director, NPFC, to support 

the claim. Further, a claim presented to the Fund should include, as applicable:

“[T]he reasonable costs incurred by the claimant in assessing the damages claimed. This 

includes the reasonable costs of estimating the damages claimed, but not attorney’s fees or 

other administrative costs associated with preparation of the claim.” 33 CFR 136.105(e)(8).

Under OPA 90, at 33 USC § 2702(a), responsible parties are liable for removal costs and 

damages resulting from the discharge of oil into navigable waters and adjoining shorelines, as 

described in Section 2702(b) of OPA 90. 

"Oil" is defined in relevant part, at 33 USC § 2701(23), to mean “oil of any kind or in any form, 

including petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged 

spoil”.

33 U.S.C. §2713(d) provides that “If a claim is presented in accordance with this section, 

including a claim for interim, short-term damages representing less than the full amount of 

damages to which the claimant ultimately may be entitled, and full and adequate compensation is 

unavailable, a claim for the uncompensated damages and removal costs may be presented to the 

Fund.” 

Under 33 CFR 136.105(b) each claim must be in writing, for a sum certain for each category of 

uncompensated damages or removal costs resulting from an incident. 

Under 33 CFR 136.115(d), the Director, NPFC, will, upon written request of the claimant or the 

claimant's representative, reconsider any claim denied. The request for reconsideration must be 

in writing and include the factual or legal grounds for the relief requested, providing any 

additional support for the claim. The request for reconsideration must be received by the NPFC 

within 60 days after the date the denial was mailed to the claimant or within 30 days after receipt 

of the denial by the claimant, whichever date is earlier.

DETERMINATION OF LOSS: 

The claimant’s cooling water system uses 108 of the RO membranes at one time. The claimant 

bases its claim on the allegation that the RO membranes in service at the time of the incident 
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experienced a 64% reduction in their service life. The membranes’ expected life is 36 months. 

The claimant alleges that the actual life of the membranes, which are the subject of this claim, 

was only 13 months. The claimant spent $63,750.00 for the replacement and installation of new 

membranes in May 2005. 

According to the claimant, new membranes reject 98% of the salt in the water, and the 

percentage drops over time. The claimant changes the RO membranes when their performance 

degrades to 92% effectiveness in salt rejection. Logan replaced the membranes in April 2004 

because of a promise from the manufacturer that the new membranes would have improved 

performance and a steep discount. Logan asserts that the membranes’ performance had 

plateaued at 94.5% salt rejection when the spill occurred. As a result, Logan infers that because 

of the oil spill the 92% threshold was passed and that salt rejection at the time of replacement in 

May 2005 was 90%. 

The manufacturer of the membranes provides a three-year warranty for salt rejection of at least 

94%. The claimant states that the warranty is void if the feed-water to the RO elements contains 

oil. The claimant maintains that the presence of the oil in the cooling water is evidenced by the 

accumulation of oil on the surface boom in the make-up cooling water pond, which was a part of 

a mitigation strategy. However, we find that the statement that oil on boom in retention pond is

not sufficient evidence that the filters were damaged by oil. Normally, the plant draws cooling 

water straight from a subsurface intake in the Delaware River. After the spill, the claimant 

devised a strategy to prevent oil from being taken into the cooling water system. This strategy 

involved diverting water into a rainwater basin where the water could be observed and oil could 

be separated and decanted. On pages 7 and 8 of the claimant’s submission binder, the claimant 

stated that “the mitigation strategy seemed to work effectively” and the alternate feed water 

pumping system was “continuing to function well.” 

By letter dated April 10, 2008, the NPFC requested the claimant to provide evidence that the RO 

membranes were oiled. In its response dated August 12, 2008, the claimant stated, “There is no 

direct evidence. The RO membranes were disposed of, not autopsied. The evidence is indirect. 

Evidence of oil in the river, oil in the water pumped into plant and RO filter intolerance to oil 

has been provided.” The indirect evidence is not evidence of damage. It merely proves that oil 

was in the river and rainwater pond. It does not prove that oil got into the plant and damaged the 

membranes. The claimant’s own statements make it readily apparent that the mitigation strategy 

was working successfully. The claimant went to great lengths to take the necessary mitigation 

precautions to prevent oil from entering its cooling water system, a system which, it states was 

successful, but then asserts failed in the fact that it is claiming damages to its filters. 

The claimant provided a graph and supporting data in an attempt to demonstrate that the 

effectiveness of the filters dropped as a result of the oil spill. However, we find that this data 

does not bolster the claimant’s position. The data and graph show that the effectiveness of the 

filters was on a downward trend that continued after the spill. This downward trend could be just 

as easily caused by a defect in the filters or some other factor. The claimant failed to prove a 

link to the oil spill with this documentation.

The weakness in the claim is that the claimant has no actual hard evidence of damages. When it 

disposed of the membranes it threw away its only means of proving that they were oiled. They 

did no testing on the membranes prior to the disposal. Without the actual filters and evidence of 

tests to the filters showing the presence of oil in the filters, the claimants are unable to show that 

the filters were damaged by oil. The collateral data provided by the claimant does not show that 

oil was in the system, much less that it damaged the membranes because the membranes’ 
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performance was already degrading prior to the spill. To reiterate, the claimant has not met its 

burden of proving that the oil spill damaged or caused diminished performance of the filters. 

As for claimed assessment costs, since the underlying claim for property damage has not been 

proven compensable, the relevant assessment costs are not compensable either. Additionally, the 

claimant does not owe the Claims Assessment Group for assessment costs unless the Fund pays 

them to the claimant. (See Certification at bottom of Lighthouse Technical Consultants invoice 

#2007-CAG201 dated 13 Feb 2007). 

AMOUNT: $0.00 

DETERMINATION: 

Logan failed to meet its burden of proving that the oil spill caused it to have to prematurely 

replace its RO membranes. Therefore, the claim for property damage and associated assessment 

costs is denied. 

Claim Supervisor: 

Date of Supervisor’s review: 

Supervisor Action: 

Supervisor’s Comments: