PROVIDENCE — The jury in the federal criminal trial of the utility company Southern Union began its first day of deliberations yesterday, after hearing closing arguments from both sides and instructions from U.S. District Judge William E. Smith.

The Texas-based company is charged with two counts of illegally storing mercury without a permit at an unstaffed facility in Pawtucket and one count of failing to notify local authorities when it discovered that the mercury had been stolen by vandals and dumped on the property and at a nearby apartment complex in the fall of 2004.

If convicted on all counts, Southern Union could face more than $67 million in fines.

The trial opened on Sept. 22 and lasted 12 days, breaking for a four-day recess on Tuesday of last week. The jury of four women and eight men considered the case yesterday for about 2½ hours before recessing at 4:30 p.m. without having reached a verdict.

The jury submitted one question to Judge Smith, who said that he would address the question this morning in open court before deliberations resume.

The case involves Southern Union’s storage of mercury-containing gas regulators (devices that controlled the flow of gas to a household) and other loose containers of liquid mercury in a building at 91 Tidewater St.

In 2001, the company had started a program to remove obsolete regulators from customers’ homes, using the Tidewater site to extract mercury from the regulators before sending it off for processing.

The mercury recycling program ended within a year, but workers continued to remove regulators from homes. Soon mercury was piling up at the Tidewater site.

Terrence Donnelly, of the U.S. Attorney’s Office, said in his closing remarks that the company had no intention of properly disposing of the mercury after the recycling program ceased.

Company employees testified that the decaying Tidewater facility has been the place where junk and obsolete equipment were stored.

The gas regulators had been left lying in plastic kiddie pools, while nearly 160 pounds of liquid mercury (one fluid ounce of the metal weighs about one pound) was stored in a variety of containers ranging from an old paint can to a gallon milk jug.

During the trial, employees testified they had concerns about the continued storage of mercury at Tidewater, but that they were ignored by company administrators.

When the spill was discovered, Donnelly argued that, rather than informing the Pawtucket Fire Department or the state fire marshal’s office, as required under law, the company officials, including those who specialized in environmental issues, “circled the wagons.”

“They are the environmental guys, they wrote the book [on mercury disposal], they know the [law], they know that they should have notified authorities, and they did not,” he said.

Southern Union’s attorney John Tarantino told the jury that the company had been “a victim of a crime” of larceny and should not have to face criminal charges.

The company had no responsibility to notify authorities of the spilled mercury since the company was not aware until much later that the exposure went beyond its property, he said.

The government had also failed to prove the company had “willfully and knowingly” chosen not to notify authorities, Tarantino said.

He argued that Southern Union was a qualified “handler” of mercury, and so was not required to seek a permit for its storage, so long as the storage was temporary until the mercury could be processed.

Tarantino said that the key distinction was that the company considered the mercury a “product” that it intended to recycle, not a “waste” material. Through company memos and documents, the defense showed that the company had a program in place to recycle mercury-containing regulators and was just waiting until it had a collected a substantial amount of mercury (about 500 pounds) before sending it off the Tidewater site.

He added that the conditions at Tidewater, while “regrettable,” made “no difference at all” in the case since “negligence” was not a factor.

“The government has failed to prove its case,” Tarantino said. “End this ordeal for Southern Union.”

pmarcelo@projo.com