The purpose of the Environmental Assurance Program (EAP) is to ensure that Petroleum Storage Tanks (PSTs) are managed in accordance with federal and State laws and regulations. Leaking PSTs (LPSTs) can contaminate soil and groundwater, and groundwater accounts for about 96 percent of Utah’s drinking water. In addition, toxic and potentially explosive petroleum vapors can get into subsurface utilities, basements, homes, schools, and workplaces.
Federal and state laws require that all PST owners/operators have the financial ability to pay for the investigation and cleanup of petroleum releases (leaks) from PSTs. The amount of financial assurance required depends on the type of business using the PSTs. Petroleum non-marketers must have $500,000 and marketers must have $1 million in coverage.
In 1989, the Utah State Legislature created the Petroleum Storage Tank Fund (PST Fund) to provide PST owner/operators with a cost-effective way to meet the federal financial assurance requirements. Other ways of meeting this requirement include private insurance and self-insurance (see Demonstrating Financial Responsibility. For releases from PSTs that occur after July 1, 1994, the PST owner/operator must pay a $10,000 deductible. After the deductible is paid, the EAP will cover eligible expenses (for releases reported on or after May 11, 2010) up to $990,000 (non-marketer) or $1,990,000 (marketer); twice the amount of coverage required by federal regulations.
Coverage under the EAP is similar to an insurance policy and is essentially funded by both mandatory and voluntary petroleum storage tank fees. One of these fees is the legislated 13/20 cent surcharge per gallon of fuel either sold or passed through a dispenser (for non-marketers). For releases (tank leaks) covered by the EAP, the responsible party pays the first $10,000 (the “deductible”) and cleanup coverage by the EAP extends to up to $2 million. To date, approximately $135 million has been expended from the EAP. Based upon the FY2021 Actuarial Report, approximately $27.4 million is needed to complete the remaining known cleanups.
To qualify for coverage by the EAP, owners/operators must submit an eligibility application to the DERR. The potential EAP claimant must declare whether they have other insurance coverage. If they do, the EAP would be subrogated to any other insurance coverage, i.e., the “other insurance” would be primary and the EAP would be secondary. For example, if an EAP claimant received money from both private insurance and the EAP, the claimant would be required to pay back the EAP.