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ENB - Statewide Notices 12/30/2009

Public Notice

Notice of Adoption

6 NYCRR Part 649, New York State Water Pollution Control Revolving Fund Regulations

Pursuant to Environmental Conservation Law Sections Environmental Conservation Law Sections 1-0101, 3-0301, 15-0101, 15-0105, 15-0109, 15-0315, 15-0317, 15-1303; L.1989, ch. 565

The adopted rule amends 6 NYCRR Part 649 to set forth rules and procedures whereby the New York State Department of Environmental Conservation (NYS DEC) can adhere to its current administrative policies and practices and also meet a February 10, 2010 deadline for States to have projects underway or under contract to avoid losing the funds provided in the stimulus legislation entitled the "American Recovery and Reinvestment Act" (ARRA).

The regulations allow for funding to be extended to green infrastructure, water, and energy efficiency improvements or other environmentally innovative activities and projects. Other provisions allow NYS DEC to provide funding for pre-design planning and to bypass projects on the Intended Use Plan based upon project readiness. The use of ARRA funds in New York State will create and retain jobs, and fuel critical environmental infrastructure construction throughout New York State.

The formal Notice of Adoption is scheduled to be published in the December 30, 2009 State Register.

For Further Information:

Robert Simson
NYS DEC - Division of Water
625 Broadway, 4th Floor
Albany, NY, 12233-3500
Phone: (518) 402-8271


Notice of Lodging of Consent Decree Pertaining to New York's Regional Greenhouse Gas Initiative Regulations

Notice is hereby given that, on December 23, 2009, a proposed Consent Decree in Indeck Corinth, L.P. v. Paterson et al., Index No. 5280-09 (Judge McNamara), was lodged with the Supreme Court of the State of New York, County of Albany. The Consent Decree has been approved by all parties to the litigation and has been furnished to the Court pending the public comment period that is being announced today. The Consent Decree has not yet been entered by the Court as an Order.

The RGGI Program - The Consent Decree pertains to a challenge to New York's regulations implementing the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program pursuant to which New York and nine other northeast states will reduce the total amount of allowable state- and region-wide carbon dioxide (CO2) emissions from power plants by 10 percent by the end of 2018. In 2008, after an extensive, multi-year rulemaking process, the New York State Department of Environmental Conservation (NYS DEC) promulgated the CO2 Budget Trading Program rule, codified at 6 NYCRR Part 242 (NYS DEC Rule), and the New York State Energy Research and Development Authority (NYSERDA) issued the CO2 Allowance Auction Program, 21 NYCRR Part 507 (collectively, RGGI Rules).

The RGGI Rules require power plant owners in New York to obtain sufficient allowances to cover their annual CO2 emissions (one allowance covers one ton of emissions). Power plant owners may purchase the allowances at quarterly regional auctions or on a secondary market. The RGGI Rules direct NYSERDA to spend the proceeds from auctions on developing and implementing programs targeted at energy efficiency, renewable energy, and non-carbon emitting technologies. To date, the sale of these allowances at auctions has generated more than $180 million for New York.

Under the RGGI Rules, NYS DEC also allocates a limited number of allowances to power generators that have long-term contracts (LTCs) to sell electricity, and that are precluded under such LTCs from passing through the cost of allowances to the purchasing party. The NYS DEC Rule sets aside 1.5 million allowances annually to be distributed for free to LTC applicants that NYS DEC determines meet certain qualification requirements in the NYS DEC Rule. After receiving applications from LTC generators for 2009, NYS DEC determined that the number of allowances requested from the LTC set-aside for 2009 exceeded the 1.5 million available in the LTC set-aside account. As a result, under the NYS DEC Rule, successful LTC applicants received a pro rata portion of the 1.5 million allowances in the LTC set-aside account.

The Lawsuit - On January 29, 2009, Indeck Corinth, L.P. (Indeck) filed a lawsuit against Governor Paterson, NYS DEC, NYSERDA, and the New York Public Service Commission (NYS PSC) challenging the RGGI Rules. Indeck operates a gas-fired, combined-cycle co-generation facility in Corinth, New York that is subject to a LTC with Consolidated Edison Co. (Con Edison) for supply of most of the electricity produced by the Indeck facility. Indeck claims that the terms of its LTC with Con Edison do not permit it, unlike other generators in the State that are not a party to a LTC, to pass on costs associated with the purchase of allowances under the CO2 Budget Trading Program to its customers. Con Edison has similar contracts with two other generators, Brooklyn Navy Yard Cogeneration Partners (BNYCP) and Selkirk Cogen Partners, L.P. (Selkirk), each of which operates a gas-fired combined cycle co-generation facility.

In its complaint, Indeck challenges the RGGI Rules on a number of grounds, including that NYS DEC's and NYSERDA's promulgation of the RGGI Rules was ultra vires, unconstitutional, arbitrary and capricious, and not supported by a proper record. In defense, the government defendants dispute each of Indeck's claims and have submitted papers arguing, inter alia, that in adopting the RGGI Rules, NYS DEC and NYSERDA acted within the broad authority granted to them by the Legislature to address air pollution and to fund programs related to energy conservation and alternative energy, and that NYS DEC and NYSERDA properly exercised their discretion based on their technical expertise and an extensive multi-year rulemaking record.

Terms of the Consent Decree - The parties to the Consent Decree include Governor Paterson, NYS DEC, NYSERDA, NYS PSC and Indeck, as well as Con Edison, BNYCP, Selkirk, and the New York State Department of Public Service (NYS DPS). Under the Consent Decree, Con Edison has agreed to pay the cost of the additional allowances that Indeck and Selkirk will need through the end of their LTCs in or before 2015 to cover their emissions over and above the pro rata allocation of allowances by NYS DEC from the LTC set-aside under the NYS DEC Rule. Con Edison also has agreed to cover the cost of such shortfall in necessary allowances that BNYCP is likely to experience through 2016, when NYS DEC projects that the number of allowances in the LTC set-aside account will be sufficient to cover BNYCP's allowance needs. NYS DEC has committed in the Consent Decree to maintain the LTC set-aside account under the NYS DEC Rule at 1.5 million allowances annually through 2016. The NYS PSC has agreed to consider approval of a tariff amendment allowing Con Edison to pass through the costs of purchasing allowances to its ratepayers. Based on currently available information, the parties estimate the cost of these allowances will be approximately $2.6 million/year. To offset these costs, NYSERDA has agreed in the Consent Decree to use a portion of the RGGI proceeds to fund energy efficiency programs in Con Edison's rate territory, which such funds will be commensurate with the costs associated with Con Edison's payment of allowance costs to Indeck, BNYCP and Selkirk.

Public Comment Process - The New York Attorney General's Office (NYOAG) will receive comments relating to the Consent Decree for a period of thirty (30) days from the date of this publication. Comments on the Consent Decree should be addressed to Assistant Attorney General Morgan A. Costello, and either (1) e-mailed to her at: morgan.costello@ag.ny.gov, or (2) mailed to her at New York State Department of Law, Environmental Protection Bureau, The Capitol, Albany, New York 12224.

During the public comment period, the Consent Decree may be examined on the NYS DEC's website: www.dec.ny.gov/energy/61366.html, on NYSERDA's website: www.nyserda.org, and on the NYOAG's website: www.ag.ny.gov/bureaus/environmental/legal_documents.html. A copy of the Consent Decree may also be obtained by mail or e-mail from AAG Morgan Costello at the address noted above. The Consent Decree and attachments, including signature pages, total 108 pages. Copying costs are 25 cents per page.

Contact: Morgan A. Costello, Assistant Attorney General, NYSOAG-Environmental Protection Bureau, The Capitol, Albany, NY 12224-0341, Phone: (518) 473-5843, Fax: (518) 473-2534, E-mail: morgan.costello@oag.state.ny.us.


Notice of Changes to the Environmental Benefits Projects Policy

The New York State Department of Environmental Conservation (NYS DEC) announces adoption of revisions to its Environmental Benefits Projects (EBPs) policy. This revised policy replaces the existing EBP policy (CP-37) and provides guidance to NYS DEC staff and the regulated community regarding NYS DEC's use of EBPs in the settlement of enforcement actions. This policy will take effect on January 29, 2010.

Among the changes to the existing CP-37, the revised policy: (1) recognizes NYS DEC discretion to have a respondent make a payment to a designated entity or fund for implementation of an approved project; (2) states a preference, instead of a mandate, for a project to have a geographic nexus to the violation(s); (3) states a preference for projects that have a pollution prevention component; (4) eliminates or eases certain limitations on EBPs (i.e., elimination of the requirement for a payable penalty of at least 20% of the calculated payable penalty in favor of a more flexible standard of a "material payable penalty"; elimination of the prohibition of claiming a tax benefit from an EBP); (5) allows consideration of projects that achieve significantly early compliance or significantly exceed minimum compliance; (6) states a preference for specified EBPs over unspecified EBPs; (7) where a respondent agrees to an unspecified EBP, requires an approvable specified EBP be proposed within a year; (8) broadens the financial assurance mechanisms available for use; and (9) allows for the reimbursement of extraordinary expenses incurred by the Department in overseeing implementation of an EBP.

In accordance with Section 3-0301.2(z) of the Environmental Conservation Law, NYS DEC published notice of proposed revisions to CP-37 in the September 23, 2009, edition of the Environmental Notice Bulletin (ENB). NYS DEC received no comments on the proposed revisions from members of the public. Accordingly, the NYS DEC is adopting the proposal as final. The revised policy will take effect 30 days after its publication in the ENB.

Copies of the revised policy are available for public inspection in the NYS DEC main office at the above address and in each of NYS DEC's nine regional offices. The Policy also is available at the NYS DEC website: www.dec.ny.gov/regulations/57988.html. In addition, a copy of the Policy is available by writing or calling Elissa Armater, NYS DEC - General Counsel, 625 Broadway 14th Floor, Albany, New York 12233-1500, Phone: (518) 402-9509.

Contact: Elissa Armater, NYS DEC - General Counsel, 625 Broadway 14th Floor, Albany, New York 12233-1500, Phone: (518) 402-9509.



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