Philly seeks over $1M from PES refinery for Fire Department response

The city wants Philadelphia Energy Solutions to pick up the bill for costs incurred by the Philadelphia Fire Department’s hazardous materials team in responding to last summer’s explosion and fire at the refinery complex and the team’s continuous presence at the site until last fall.

According to documents filed in U.S. Bankruptcy Court for the District of Delaware this week, the city first sent two invoices to PES on Jan. 10 for reimbursement for services provided from June 21 through Sept. 24 of last year.

On Monday, the city submitted to the court a motion for allowance and payment of $1,096,721.76 for services provided from July 21, 2019  — when PES filed for Chapter 11 bankruptcy — to Sept. 24, 2019. The payments were due on Feb. 28.

“To date, the PFD has not been reimbursed for any of the costs described above,” Deputy City Solicitor Megan Harper wrote in the motion.

According to that motion, the Fire Department deployed more than 120 firefighters and more than 50 pieces of equipment to respond to the refinery fire on June 21. But personnel from the Fire Department and the city’s Office of Emergency Management remained on site until Sept. 24, when toxic hydrofluoric acid was successfully neutralized. The invoice bills PES for $1,051,198 for hazmat personnel and $45,523 for partner agency usage.

The Fire Department response is recoverable by law, according to the city, and should be paid by PES from the proceeds of the sale of the refinery to Hilco Redevelopment Partners for $250 million because they “provided an actual benefit to the estate” and “were necessary to preserve the value of the estate assets.”

“Without the efforts of the PFD, and PES personnel, an even greater catastrophe would have resulted possibly leaving no personal property to offer for sale and real property unsuitable for any use,” the motion says. “Although the fire was extinguished as of the petition date, the PFD’s postpetition services ensured the safe neutralization of highly toxic HF that remained on site, protecting the public health and safety, and preventing further potential erosion of estate assets.”

Philadelphia Energy Solutions CEO Mark Smith said Thursday that the company has been seeking reimbursement for the city for months from its insurers and finally got authorization for it on Thursday morning.

The city filed a proof of claim for the costs related to the fire and explosion that were incurred before the bankruptcy was filed, from June 21 to July 21, for a total $725,318.01. Smith said the company will pay the total amount, $1,822,039.77.

“PES was informed this week that our submission was approved by our insurance carriers and expect to be in a position to pay the City shortly,” Smith said in an email.

The sale of the refinery has not yet been consummated and should be happening by mid-May, Smith said.