NS agrees to resolve federal East Palestine derailment claims

Norfolk Southern Corp. has reached an agreement on a consent decree with the U.S. Department of Justice (DOJ), U.S. Environmental Protection Agency (EPA), and U.S. Department of the Interior (DOI) to resolve all their claims and investigations arising from the Feb. 3, 2023, derailment in East Palestine, Ohio.

The agreement establishes long-term health monitoring and mental health services for residents and first responders, codifies rail safety improvements and recognizes the railroad's extensive community investments, NS officials said in a press release.

Subject to court approvals, the agreement builds on the significant financial commitments that the company has already made toward environmental remediation, community-based programs and safety-related enhancements, they said.

"We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community's needs and our mission to be the gold standard of safety in the rail industry," said NS President and CEO Alan Shaw. "We will continue keeping our promises and are invested in the community's future for the long-haul."

Under the agreement, NS will formalize several commitments to address environmental remediation, health monitoring and rail safety. Those include:
• paying a $15 million civil penalty and reimbursing the EPA for its full response expenses, which are approximately $57 million through Nov. 30, 2023, as well as subsequent response costs;
• in addition to completing cleanup of the derailment site, implementing several environmental remediation projects to address preexisting pollution and to improve water quality in the region, which is estimated to cost $7 million;
• continuing to monitor groundwater and surface water bodies, estimated to cost $10 million to $15 million, and establish a drinking water monitoring program, estimated to cost $15 million over 10 years;
• establishing a $25 million Community Health Program that will provide medical exams and mental health services for the community and first responders for up to 20 years; and
• spending $244 million on safety initiatives through 2025 as part of the company's Six Point Safety Plan, and investments in safety infrastructure, technology and training.

The financial impact associated with the above expenditures have either been previously estimated as part of the total $1.7 billion recognized in response to the incident through March 31, or are included as part of the company's ongoing financial outlook, including those surrounding capital expenditures and the overall 2024 outlook, NS officials said.