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Caithness Long Island, LLC

January 11, 2006


APPLICANT: Caithness Long Island, LLC
C/o Caithness Corporation
565 Fifth Ave, 29th Floor
New York, NY 10017

APPLICATION No. 1-4722-04426/00004 Article 19 - Air Pollution Control
1-4722-04426/00005 Article 19 - Title IV, Acid Rain Deposition
1-4722-04426/00006 Article 17, Water Pollution Control-SPDES

PROJECT LOCATION: Terminus of Zorn Boulevard, Town of Brookhaven, NY

PROJECT DESCRIPTION: Caithness Long Island LLC proposes to construct and operate the Caithness Long Island Energy Center ("the project") which is a nominal 346 megawatt (MW), dual fuel, combined-cycle electric generating station consisting of one Siemens Westinghouse Power Corporation 501F combustion turbine generator (CTG), a heat recovery steam generator equipped with natural gas-fired duct burners, and a single steam turbine. Natural gas will be the primary fuel with low sulfur (0.04%) distillate oil serving as the back-up fuel. The CTG will utilize a dry low-NOx combustor and water injection in addition to selective catalytic reduction (SCR) to reduce emissions of nitrogen oxides (NOx). An oxidation catalyst will be used to reduce emissions of carbon monoxide (CO) and volatile organic compounds (VOC). Emissions from the combustion turbine will exhaust through a single 170-foot stack. An air-cooled condenser will be used to minimize water use and eliminate cooling tower plume impacts. Other on-site equipment will include a 750,000 gallon fuel oil storage tank, gas compressors, an auxiliary boiler, fuel gas heater, emergency diesel fire pump and associated balance-of-plant systems and facilities.

The facility's water supply requirements of approximately 50,400 (average annual estimate) gallons per day will be provided by the Suffolk County Water Authority (SCWA). Sanitary wastewater will be discharged to an on-site subsurface disposal system. Process wastewater will be trucked off-site for proper disposal. Stormwater from site runoff and secondary containment areas will be discharged to groundwater through an on-site infiltration basin.

The project will be located on a 15 acre site within an approximately 96 acre parcel located at the terminus of Zorn Boulevard, south of exit 66 on the Long Island Expressway (LIE), in the Town of Brookhaven, Suffolk County.

PERMITS: Caithness Long Island LLC has applied for an air pollution control permit pursuant to Article 19 of the Environmental Conservation Law ("ECL") and Part 201 of Title 6 of the New York Compilation of Codes, Rules and Regulations ("6NYCRR"), a Title IV - Phase II Acid Rain permit, and a State Pollutant Discharge Elimination System (SPDES) permit pursuant to ECL §17-0823. DEC has tentatively determined that the application meets all air pollution control requirements of Article 19, Part 201, and Title IV (Acid Rain) of the Clean Air Act Amendments of 1990, and has also tentatively determined that all wastewater discharges will comply with the applicable requirements of the Federal Clean Water Act and State law.

Prevention of Significant Deterioration (PSD): The project is subject to the federal prevention of significant deterioration (PSD) requirements contained in 40 CFR §52.21 for the following pollutants: NOx, CO, particulate matter (PM & PM10), sulfur dioxide (SO2) and sulfuric acid mist (H2SO4). The applicant filed a PSD application with the United States Environmental Protection Agency (EPA), and the EPA Region 2 Office published a notice in Newsday on December 19, 2005 of it's preliminary determination to approve the PSD permit.

Emission reduction credits (ERCs): The applicant is also required to obtain emissions offsets in the form of emission reduction credits (ERCs) for VOCs and NOx. Pursuant to 6 NYCRR Subpart 231-2, the applicant will need to obtain the necessary tons of VOC and NOx ERCs and provide the required public notice prior to DEC's issuance of the air permits.

SEQRA Status: Pursuant to the State Environmental Quality Review Act ("SEQR", ECL Article 8 and 6 NYCRR Part 617), Long Island Power Authority (LIPA), as lead agency, has determined that the project may have a significant adverse impact on the environment. A Draft Environmental Impact Statement ("DEIS") was prepared and notice of availability of the DEIS was published in the Environmental Notice Bulletin (ENB) on March 30, 2005. The deadline for public comments closed on May 25, 2005. LIPA prepared a Final Environmental Impact Statement ("FEIS") in which the public comments were addressed, and LIPA accepted the FEIS on June 23, 2005.

State Historic Preservation Act (SHPA) Determination: A cultural resources survey has been completed. Based on the information provided in the survey report, the New York State Office of Parks, Recreation and Historic Preservation has determined that the proposed activity will have no impact on registered or eligible archeological sites or historic structures. No further review in accordance with SHPA is required.

Environmental Justice: It has been determined that the proposed action is not subject to DEC Commissioner Policy 29, Environmental Justice and Permitting (CP-29). As part of the SEQRA review of the project, the Applicant undertook an environmental justice analysis consistent with the methodologies required by NYSDEC CP-29. The results of the analysis revealed that the project would not result in any significant adverse and disproportionate effect on any environmental justice communities or communities of concern.

PUBLIC HEARING: A legislative hearing session for the receipt of public comments, on the application will be held at 7:00PM on February 1, 2006 at the following location:

Frank P. Long Intermediate School
599 Brookhaven Avenue
Bellport, NY 11713
(631) 730-1725

All persons, organizations, corporations, or government agencies who may be affected by the proposed project are invited to attend the hearing and to submit oral or written comments on the application. A Spanish-speaking interpreter will be provided. It is not necessary to file in advance to speak at the hearing. Lengthy comments should be submitted in writing. Equal weight will be given to both oral and written statements. The Administrative Law Judge ("ALJ") may limit the time available for oral comments to 5 minutes per person to ensure that all persons have an opportunity to be heard. The hearing facility is reasonably accessible to the mobility impaired.

WRITTEN COMMENTS: Parties may file written comments with the NYS DEC Division of Environmental Permits, Department of Environmental Conservation, 625 Broadway, Albany, New York 12233-1750, attn: Kevin Kispert, Project Manager. Written comments must be postmarked no later than February 10, 2006.

DOCUMENT AVAILABILITY: The Department has reviewed the application materials, determined that they are complete pursuant to 6NYCRR Parts 201 and 621, made a tentative determination to approve the application and has prepared a draft permit. It has been determined that all statutory and regulatory criteria can be met through the imposition of special permit conditions. The application materials, as well as a draft air permit and draft SPDES permit, are available for review during normal business hours, Monday through Friday, at the following locations:

1. NYSDEC Division of Environmental Permits, 625 Broadway, Albany, New York 12233-1750. Contact: Kevin Kispert.

2. NYSDEC Region 1, SUNY Campus, Loop Road, Building 40, Stony Brook, NY 11790-2356. Contact John Pavacic. Tel:631-444-0365.

3. Patchogue-Medford Library, 54-60 East Main Street, Patchogue, NY 11772

4. Brookhaven Free Library, 273 Beaver Dam Road, Brookhaven, NY 11719

5. South Country Library, 22 Station Road, Bellport, NY 11713

6. Longwood Public Library, 800 Middle Country Road, Middle Island, NY 11953

STATUTORY and REGULATORY PROVISIONS: The air and SPDES permit applications are being reviewed pursuant to ECL Article 8 (SEQRA), Article 17 (Water Pollution Control), Article 19 (Air Pollution Control), Article 70 (Uniform Procedures Act), and 6NYCRR Part 201 (General Provisions - Air Pollution Control), Part 617 (SEQRA), Part 621 (Uniform Procedures), and Part 750 et seq. (SPDES).

January 11, 2006
Albany, New York

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