ON MAY 23, 2005, REGION I REFERRED BY LETTER TO DOJ A CASE AGAINST ALGONQUIN POWER SYSTEMS INC. INVOLVING CIVIL VIOLATIONS OF CWA 301(A) AND 311 WHICH ARE PART OF A UNIVERSAL CRIMINAL-CIVIL SETTLEMENT PROPOSAL DEVELOPED BY THE NEW HAMPSHIRE U.S. ATTORNEYS OFFICE. THE CASE INVOLVES OIL DISCHARGES FROM ALGONQUIN'S RIVERBEND HYDRO ELECTRIC TURBINES IN FRANKLIN, NH. THE MINOR LEAKS ARE CHARACTERIZED AS VIOLATIONS OF CWA 301(A)(DISCHARGE WITHOUT A PERMIT) WHILE THE MORE SUBSTANTIVE DISCHARGES ARE CHARACTERIZED AS VIOALTIONS OF CWA 311 (OIL SPILL). THE IMPACT ON THE WINNEPESAUKEE RIVER FROM THE SPILLS LEAKAGE HAS BEEN MINOR AND THE COMPANY HAS TAKEN STEPS TO CORRECT THE PROBLEM.