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Erie Boulevard Hydropower, LP

March 7, 2005

NEW YORK STATE
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (NYSDEC)

SUPPLEMENTAL NOTICE OF PUBLIC COMMENT PERIOD, COMPLETE APPLICATION, and
RECONVENING OF PUBLIC HEARING

APPLICANT: Erie Boulevard Hydropower, L.P. (Acting through its general partner, Brascan Power - New York; formerly, application of Niagara Mohawk Power Corporation), 225 Greenfield Parkway, Suite 201, Liverpool, NY 13088 [Applicant Contact: Jerry L. Sabattis, Brascan Power - New York, 225 Greenfield Parkway (Suite 201), Liverpool, New York 13088].

APPLICATION NUMBER: DEC Project No. 4-0103-00027/00001 (Formerly DEC Project No. 4-6103-00027/00001-9) - Water Quality Certification ("WQC").

FEDERAL ENERGY REGULATORY COMMISSION ("FERC") NUMBER: 2539

SUPPLEMENTAL PUBLIC HEARING NOTICE: The New York State Department of Environmental Conservation ("Department") initially issued a notice of public hearing on July 6, 1993. The initial notice included the School Street project ("project") and eight other hydroelectric facilities, which at the time of the notice were owned by Niagara Mohawk Power Corporation ("NMPC"), predecessor in interest to Erie Boulevard Hydropower, L.P. The joint legislative hearing and issues conference for the nine facilities were held on August 5, 1993, in Utica, New York. Regarding this project, timely petitions for party status were received from New York Rivers United, New York Power Authority and the City of Cohoes.

Following an April 20, 1994 ruling by the Administrative Law Judge ("ALJ") on the scope of the State's authority to review, deny and condition Clean Water Act ("CWA") § 401 WQCs (a/k/a Federal Water Pollution Control Act, 33 U.S.C. § 1341) for the relicensing of hydroelectric projects before FERC, administrative appeals were filed. During the pendency of administrative appeals of that ruling, on May 31, 1994 the United States Supreme Court issued a decision relevant to the scope of CWA § 401 review. See PUD No. 1 of Jefferson County v. Washington Dept. of Ecology, 511 U.S. 700, 114 S.Ct. 1900, 128 L.Ed.2d 716, 62 USLW 4408, 38 ERC 1593, 24 Envt'l. L. Rep. 20,945 (1994). At that point, in June 1994 at the request of Department staff and intervenors, the matter was remanded to the ALJ for consideration of the recent Supreme Court decision and its effect upon this WQC review. The participants then agreed to pursue settlement discussions among themselves on the draft part 401 WQCs.

The projects were considered sequentially, each being the subject of complex, lengthy negotiations seeking to include all stakeholders. In eight of the nine cases, a settlement agreement was reached and a WQC issued by the Department. The School Street project is the last of the nine projects to reach settlement. Due to the significant change in the draft WQC and public interest in the project, Department staff determined that a supplemental public hearing notice is appropriate.

NOTE: This hearing was commenced pursuant to the Department's former permit hearing regulations, title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York part 624, effective August 3, 1981 (as amended July 15, 1985), through January 8, 1994, and continues to be governed by that version of the permit hearing regulations ("former 6 NYCRR"). All citations to former 6 NYCRR part 624 herein are to this version of the permit hearing regulations. (The current permit hearing regulations, effective January 9, 1994, are not applicable to this proceeding.) A copy of the applicable former regulations may be requested by E-mail from the Office of Hearings and Mediation Services at "ohms@gw.dec.state.ny.us" (Please reference the School Street project in the subject line and provide a mailing address with your request.)

PROJECT DESCRIPTION: The project is a hydroelectric facility that consists of five vertical Francis turbines with a generating capacity of 38.8 MW and is located on the Mohawk River. The project consists of the School Street Dam, which is a gravity dam that creates an approximately 100 acre reservoir. Water is diverted from the reservoir to the power canal, which conveys water to the powerhouse. At the School Street Dam is a gatehouse that is used to control the diversion of water to the power canal. The powerhouse is at the end of the canal and houses the five turbines. After exiting the powerhouse, water is discharged to the tailrace and then back to the Mohawk River. Historically, the project has been operated as a storage-and-release pulsing facility. Applicant typically fluctuates the reservoir between 156.1 feet mean sea level ("msl") to 153.1 feet msl. Applicant is also proposing to excavate and dredge approximately 65,000 cubic yards of bedrock and sediment from the power canal, which is located within the project boundary.

PROJECT LOCATION: The project is located at river mile 2.5 on the Mohawk River in Albany and Saratoga Counties. The Powerhouse is located in the City of Cohoes at the junction of North Mohawk Street and School Street.

SETTLEMENT AGREEMENT: Department of Environmental Conservation staff, with other participants in the settlement process (including entities that did not timely apply for party status in this Departmental proceeding) have executed a settlement agreement, dated March 7, 2005 for the project. The settlement agreement provides for many environmental enhancements at the project. The enhancements include operating the project in a Run-of-River mode, continual water releases to the bypassed reach of the Mohawk River, scheduling weekend and holiday aesthetic flows over Cohoes Falls, creating improved recreational access to lands within the project boundary, constructing a safe fish passage conduit around the power house, and the option to install a sixth "fish friendly" turbine that will be tested for effectiveness in safely passing fish.

Clean Water Act §401
Water Quality Certification

Pursuant to the Federal Water Pollution Control Act (33 U.S.C. § 1341), or Clean Water Act § 401, an applicant for a federal license for an activity that may result in a discharge into navigable waters, such as a hydropower project, must obtain a certification from the State in which the discharge originates that the discharge will comply with applicable provisions of the CWA, including State water quality standards. The application for such a water quality certification is made pursuant to former 6 NYCRR 608.7. Relevant to hydroelectric projects is former 6 NYCRR 608.7(a)(2), which references New York's "water quality standards and thermal discharge criteria set forth in 6 NYCRR Parts 701, 702 and 704."

Department staff has concluded that the application for this permit is complete within the meaning of 6 NYCRR 621.1(d), has prepared a draft CWA § 401 WQC permit and pursuant to 6 NYCRR 621.5(d)(7) and has tentatively determined to issue this permit. The draft WQC incorporates the terms of the settlement agreement.

Additional Regulatory Provisions

FERC License: The project is required to be relicensed by FERC. The application process before FERC for hydroelectric power facility licenses is governed by the Federal Power Act, 16 U.S.C. § 792, et seq., and its implementing regulations, 18 CFR parts 4 and 16. The FERC regulations outline an application process that consists of successive stages of consultation, comments, and responses among an applicant, FERC, and interested "resource agencies." The Department has actively participated in this consultation process since August 1989 through frequent correspondence, attendance at meetings, and formal intervention. The Department petitioned to intervene in the FERC application proceeding for the project.

In addition to the specific statutes and regulations cited above, the WQC application is being processed by the Department pursuant to New York law: ECL article 3, title 3 (General Functions), article 11 (Fish and Wildlife), article 15 (Water Resources), article 70 (Uniform Procedures), 6 NYCRR part 608 (Use and Protection of Waters), part 621 (Uniform Procedures), former part 624 (Permit Hearing Procedures) and 6 NYCRR chapter X (Division of Water Resources), sub-chapter A, article 2 (Classifications and Standards of Quality and Purity).

SEQRA STATUS: Department staff has determined that New York State is preempted by FERC's federal authority from conducting an environmental review pursuant to SEQR. Staff has determined that FERC has the authority under the Federal Power Act (16 USC § 791, et seq.) to consider environmental issues regarding the relicensing of a hydroelectric project and states may not engage in concurrent site specific environmental reviews.

TENTATIVE DEC STAFF POSITION: Department staff has reviewed the application and supporting documentation and has determined that they are complete pursuant to 6 NYCRR part 621. A tentative determination has been made to approve the project and a draft WQC has been prepared. Department staff has determined that the project can meet all applicable State water quality standards through the imposition of special certificate conditions.

DOCUMENT AVAILABILITY: The draft WQC and the incorporated settlement agreement are available for review at the following locations during normal business hours between 9:00 a.m. and 4:00 p.m., Monday through Friday:

1. NYS DEC Office of Hearings and Mediation Services, 625 Broadway, First Floor, Albany, NY 12233-1550. Contact: ALJ Kevin J. Casutto at (518) 402-9003;
2. NYS DEC Division of Environmental Permits, 625 Broadway, Albany, New York 12233-1750. Contact: Christopher M. Hogan, Project Manager, at (518) 402-9151; and
3. NYS Department of Environmental Conservation, Region 4 Headquarters, 1150 North Westcott Road, Schenectady, NY 11101-5407. Contact: William Clarke at (518) 357-2460.

The draft Water Quality Certificate and incorporated settlement agreement are available for review at the following locations during normal business hours:

1. Cohoes City Library, 169 Mohawk Street, Cohoes, NY 12047. Phone No. (518) 235-2570. Contact: Debra Canzano (518- 235-2570).
2. Cohoes City Hall, 97 Mohawk Street Cohoes, New York 12047. Phone No. (518) 233-2121. Contact: City Clerk Lori Yando (518-233-2140).
3. Waterford Town Hall, 65 Broad Street, Waterford, New York 12188. Phone No. (518) 235-7737. Contact: Darlene A. Dziarcak, Town Clerk.

WRITTEN COMMENTS: All written comments on the draft part 401 Water Quality Certificate must be postmarked by April 6, 2005, and sent to ALJ Kevin J. Casutto, NYSDEC Office of Hearings and Mediation Services, 625 Broadway, First Floor, Albany, New York 12233-1550.

All public comments, both written and oral, on the certificate will be reviewed by Department staff to determine whether they raise substantive and significant issues that warrant further review through adjudication. Specific comments must be supported by full documentation; references should be limited to readily available information.

Public Hearings and
Issues Conference

PUBLIC HEARING: All persons who may be affected by the proposed project are invited to comment on the application. Pursuant to former 6 NYCRR 624.7(a)(3), A LEGISLATIVE HEARING TO RECEIVE ORAL COMMENTS WILL BE HELD ON APRIL 13, 2005 AT 7:00 P.M., AT THE UKRANIAN HALL, 1 PULASKI ST, COHOES, NEW YORK, 12047-3219, COHOES, NEW YORK 12047. It is not necessary to file in advance to speak at this hearing. In lieu of oral comments, written comments may also be submitted either by mail or at the hearing. Written comments will be considered equally with oral comments made at the legislative hearing.

The location of the legislative hearing is reasonably accessible to persons with a mobility impairment. Interpreter services shall be made available to deaf persons, at no charge, upon written request to the ALJ at least 10 days before the hearing.

ISSUES CONFERENCE: Pursuant to former 6 NYCRR 624.6, A PRE-ADJUDICATORY HEARING ISSUES CONFERENCE WILL BE HELD ON APRIL 14, 2005 AT 10:00 A.M., AT THE UKRANIAN HALL, 1 PULASKI ST, COHOES, NEW YORK, 12047-3219, COHOES, NEW YORK 12047, to determine party status for any person who has properly filed an application for party status (as indicated below), and will continue on successive days, as necessary. At the issues conference, the ALJ will determine what issues, if any, require adjudication, and will define the scope of such issues. Participation at the issues conference will be limited to DEC Staff, applicant, and those persons requesting party status.

FILING FOR PARTY STATUS AND PROPOSED ISSUES: Persons seeking to participate in the issues conference and any subsequent adjudicatory hearing must file a petition (a written statement) explaining whether the request is for full party status or limited party status. Petitions for full party status must identify a substantive and significant issue for adjudication. For the required contents of petitions for full party status, See former 6 NYCRR 624.4. In addition, petitions must identify a contact person, address, telephone number and facsimile number for the petitioner.

The Department's permit hearing process is intended to address "substantive and significant issues relating to any findings or determinations the department is required to make. . . " ECL 70-0119(1); see also former 6 NYCRR 624.6(c). "Substantive" means that the issue is not based on mere speculation, but on facts that can be subjected to adjudication. (Matter of Concerned Citizens Against Crossgates v. Flacke, 89 AD2d 759 [3rd Dep't. 1982], aff'd. 58 NY2d 919 [1983]). "Significant" means that the outcome can result in permit denial or the imposition of significant permit conditions (see Matter of NYC Dept. of Environmental Protection, Chelsea Pumping Station, Third Interim Decision of the Commissioner, October 6, 1988).

For the required contents of a petition seeking limited party status, see former 6 NYCRR 624.4(d).

All filings for party status must be received at the Department's Office of Hearings and Mediation Services by 3:00 P.M., APRIL 6, 2005. Send filings to: ALJ Kevin J. Casutto, Office of Hearings and Mediation Services, New York State Department of Environmental Conservation, 625 Broadway, First Floor, Albany, New York 12233-1550. Petitions sent by facsimile or electronic transmission will not be accepted. Send copies at the same time and in the same manner to William Little, Esq., NYSDEC, 14th Floor, 625 Broadway, Albany, NY 12233-1500; and to applicant's attorney, William Madden, Jr., Esq., Winston & Strawn, L.L.P., 1400 L Street, N.W., Washington, D.C. 20005-3502.

All parties who previously submitted a petition for full party status in this proceeding must resubmit an updated petition or must provide a written explanation why their previous petition should be considered and why previously proposed adjudicable issues continue to be viable and relevant when considered in conjunction with the settlement agreement and draft WQC for this project.

In the event no petitions for party status are filed, the issues conference may be canceled.

James T. McClymonds
Chief Administrative Law Judge

March 7, 2005
Albany, New York

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