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Astoria Energy, LLC - Ruling, May 24, 2001

Ruling, May 24, 2001

NEW YORK STATE BOARD ON ELECTRIC
GENERATION SITING AND THE ENVIRONMENT

Department of Public Service

Case No. 99-F-1191
Application of Astoria Energy, LLC,
for a Certificate of Environmental Compatibility and Public Need
to Construct and Operate an approximately 1000 Megawatt Facility
in Astoria, Queens, New York.

AND

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

Case No. 2-6301-00647/00001
In the Matter of

the Applications for:
(1) a Clean Air Act (CAA) Title V permit pursuant to Environmental Conservation Law (ECL)
Article 19, 6 NYCRR Part 201 and Subparts 201-6.1 and 231-2;
(2) CAA Title IV permit pursuant to 40 Code of Federal Regulations (CFR) § 76.6(a)(3);
(3) Prevention of Significant Deterioration (PSD) conditions
pursuant to 40 CFR §§ 52.21 and 124; and,
(4) the transfer and modification of a State Pollutant Discharge Elimination System (SPDES)
storm water discharge permit pursuant to Article 17 of the ECL.

ARTICLE X AND DEC PART 624 ISSUES RULINGS

(Issued May 24, 2001)

J. Michael Harrison, Presiding Examiner

P. Nicholas Garlick, Associate Examiner

Executive Summary

A joint issues conference was held on May 2 & 3, 2001 regarding the application by Astoria Energy, LLC. (Applicant) for the necessary state governmental approvals to construct and operate a new 1,000 MW power plant in northwest Queens, New York.

In the issues conference before the New York State Department of Environmental Conservation (DEC), the Applicant and the Staff of DEC (DEC Staff) are parties to the proceeding by operation of law. Neither the Applicant nor DEC Staff raised any issues. One petition for party status was timely received from the Queens Borough President and Coalition Helping Organize a Kleaner Environment(Queens/CHOKE) which proposed four issues for adjudication. The DEC Administrative Law Judge (ALJ)/Associate Examiner finds that Queens/CHOKE has not met its burden of persuasion on any of the proposed issues. In addition, one late-filed petition for party status was received from the New York Public Interest Research Group (NYPIRG). The Associate Examiner denies this petition on the grounds that NYPIRG failed to show "good cause" for its late filing, as that phrase is defined in the applicable regulations. The merits of NYPIRG's petition are also addressed and none of the proposed issues meet the standard for adjudication. This concludes the DEC adjudicatory process.

At the Article X issues conference, all parties appeared, except Citizens Environmental and Economic Coalition (CEEC). Seventeen issues were proposed for adjudication. The Examiners requested an update on these proposed issues by May 22, 2001. As of that date, few of the issues had been resolved. We find that many of the issues as proposed can be advanced tentatively to adjudication, except notably, that the air quality and the related health issues covered by the DEC permitting process, and the associated "environmental justice" issue, will not be adjudicated. The issues advanced t adjudication include visual impacts, electrical interconnection impacts, natural gas supply, public interest considerations (reliability and economic impacts), consistency with Coastal Zone Policies, unreasonably restrictive local laws or ordinances, major onshore oil storage facility (MOSF) permitting, the MAPS modeling and related projections of overall electric system prices and environmental impacts, and noise impacts. In addition, the Applicant is directed to supplement the record with an analysis of the "no action" alternative, and whether this poses issues for adjudication will be subsequently determined. Similarly, the New York Institute of Legal Research (NYILR) is permitted to supplement the record regarding the sufficiency of the pre-application materials. Based on the negotiations among parties, a number of the potential issues may be resolved prior to the start of the hearing on July 16, 2001.

PART I: PRELIMINARY MATTERS

Introduction

This report addresses the joint Article X and DEC issues conference in the above captioned matter. There are two separate and distinct approvals that Astoria Energy LLC (the Applicant) needs to construct and operate its proposed power plant. The first approval is a Certificate of Environmental Compatibility, which must be secured from the New York State Board on Electric Generation Siting and the Environment (the Board). The second approval, from DEC, constitutes permits to discharge air pollution and storm water. Each agency has its own administrative hearing process, which includes an opportunity to adjudicate issues. In order to promote the efficiencies of the two hearing processes without sacrificing any of the procedural protections, a hearing schedule is in effect that closely coordinates these two administrative hearing processes.

Pursuant to Public Service Law (PSL) §165(2), the Presiding Examiner must issue an order identifying the issues to be addressed at the Article X hearing. Similarly, Volume 6 of the New York Code Rules and Regulation (6 NYCRR) 624.4(b)(5) directs the Associate Examiner to rule on requests for party status and to determine which issues satisfy the requirements of adjudicable issues as set forth in 6 NYCRR 624.4(c).

To satisfy these requirements, we issue the following ruling jointly, identifying the issues that will be the subject of the adjudicatory hearing scheduled to commence on July 16, 2001. The DEC issues rulings are made by the Associate Examiner, and the Article X issues rulings are made by both Examiners jointly. This ruling provides a brief description of the proposed project and a summary of the proceedings related to the joint issues conference, as well as a discussion of the issues proposed for adjudication.

Project Description

The Applicant proposes to construct and operate a combined-cycle electric generating facility that will produce 1,000 megawatts (MW). The facility will use natural gas as its primary source of fuel, with low sulfur distillate fuel oil serving as a backup for up to 720 hours annually. The facility will consist of two independent two-on-one combined cycle power blocks. Each power block will contain two General Electric Frame 7F series combustion turbines (CT), two heat recovery steam generators and one steam turbine. The facility will utilize air-cooled condensers to condense the steam turbine exhaust; there will be no water intake from the East River. When firing natural gas the facility will control nitrogen oxide (NOx) emissions by using dry low-NOx combusters and a selective catalytic reduction (SCR) system. When firing low distillate fuel oil, the facility will control NOx emissions by injecting water into the CT and using the SCR system. The facility stack will be 269 feet high.

The project site is located at 17-10 Steinway Street, Astoria, Queens. The site is currently a fuel oil storage and distribution terminal operated by Castle Astoria Terminals, Inc., and is zoned M3-1 Heavy Manufacturing under the New York City Zoning Resolution. The project site currently contains several large fuel oil tanks. Two existing storage tanks will be refurbished and used to store approximately 12.6 million gallons of backup low sulfur distillate fuel oil.

Public Notice

The public notice provided by the Applicant to the surrounding community significantly exceeds what is required by law. DEC regulations required the Applicant to publish the notice of hearing once, at least thirty days prior to the hearing date, in a newspaper having general circulation in the area within which the proposed project is located (6 NYCRR 624.3). The Article X regulations require publication of notice of the application (both in the newspaper designated for publication of official notices in the municipality in which the proposed facility would be located and the newspaper of largest circulation in the county where the proposed site is located (16 NYCRR §1000.6(a)). Subsequent notices may be required by the Board or the presiding examiner (16 NYCRR §§1000.6(e), (f), (h)).

In this case, the Applicant voluntarily took extraordinary steps to notify the community regarding the hearing process. The official DEC Notice of Complete Application, Public Hearing and Issues Conference was published in the New York Post, Newsday (Queens edition), and the Queens Tribune (nine editions) on March 1, 2001. This notification was repeated on March 9, 2001 due to an error in the original DEC notice not related to the dates or times of the hearings. Publication of the Board's notice was accomplished in early March, 2001 and repeated again at the Presiding Examiner's request in early April, 2001, with the appearance of the notice in the New York Law Journal, the New York Daily News, and the Queens Tribune.

In addition, to inform neighbors of the proposed plant who speak languages other than English, the Applicant prepared a shorter version of the hearing notice advertising the public hearings and had this translated into Korean, Spanish, and Greek. These advertisements appeared in the Korean Times, the World Journal, Korea Central Daily News, The Greek American, the Proini Newspaper, and El Diario. These non-English advertisements first appeared in early March, 2001 and were repeated in early April.

In addition, the Applicant publishes a bi-annual newsletter called "Astoria Energy's Current Events!" regarding the planning of this power plant. Copies of this newsletter have been sent to 1,600 individuals, including all members of Community Board, as well as numerous elected federal, state, city and borough officials.

Despite the efforts of Applicant to notify the community about the Article X/DEC hearing schedule, complaints were voiced at the legislative/public statement hearings that the community was unaware of the timing of the hearings.

Legislative/Public Statement Hearing

As provided in notices issued by the Secretary to the Siting Board and the DEC Office of Hearings and Mediation Services, and published in newspapers by the Applicant described above, joint legislative/public statement hearings were convened at 7:00 p.m. on April 18 & 19, 2001 at P.S. 141 in Astoria, Queens, New York.

On April 18, 2001, approximately 150 people attended and 16 people made oral statements for the record. Of those who spoke, 13 spoke in favor of the project and three spoke against. On April 19, 2001, approximately 65 people attended and ten people made oral statements for the record. Of those who spoke, five spoke in favor of the project and five spoke against.

Among the active parties, the representatives of the following attended: the Applicant, DEC Staff, DPS Staff, and the Queens Borough President (Queens BP). None of the parties spoke at the hearing, although the Queens BP did submit written comments that are included in the record.

Three elected officials were represented. Assemblyman Michael Gianaris spoke against the project as did John Ciafone, the vice-president of Queens School Board #30. Joseph Miceli, a representative of State Senator George Onorato, spoke regarding the failure to notify the elected officials in Astoria regarding this hearing.

Issues Conference

A joint issues conference occurred on May 2, 2001 at 10:00 a.m. and continued on May 3, 2001, at DPS offices at One Penn Plaza, Manhattan. In the morning of May 2, DEC issues were discussed pursuant to 6 NYCRR Part 624. In the afternoon of May 2 and the morning of May 3, the Article X issues were discussed pursuant to PSL §165(2).

PART II: DEC ISSUES CONFERENCE

Appearances

The Applicant and DEC Staff are parties to a DEC Issues Conference by operation of law (6 NYCRR 625.5(a)). The Applicant appeared through its attorneys Algrid F. White, Jr., Esq., Leonard Singer, Esq. and James King of the law firm of Couch White, LLP., Albany, NY. Also present for the Applicant were William G. May, Michael K. Anderson, and Charles Cooper. DEC Staff appeared through Franz T. Litz, Esq., and Jennifer L. Hairie, Esq. of DEC Staff. Also present from DEC Staff were Leon Sedefian, Mike Jennings, John J. Ferguson), and John Weidman.

DEC regulations allow any person, organization or combination thereof to file a petition for consideration of a request for full party status (6 NYCRR 624.5(b)). Two petitions for party status were received. A joint petition was received on behalf of Queens/CHOKE, which appeared through Hugh Weinberg, Esq., Counsel to the Queens BP, and David Schlissel of Synapse Energy Economics. Also present for Queens/CHOKE were Daniel Gutman and Rudy Sarchese.

The second petition was received from the New York Public Interest Research Group (NYPIRG). NYPIRG did not submit a petition prior to the DEC issues conference, but rather appeared at the conference with a sixteen-page document entitled "Comments on the Draft Title V Operating Permit for the Astoria Energy Power Plant Submitted on Behalf of the New York Public Interest Research Group, Inc." dated April 18, 2001, and asked that this be accepted as a petition for party status. NYPIRG explained that it had been confused by the dual nature of this proceeding and thought that by applying for party status in the Article X proceeding that it automatically had applied for party status in the DEC issues conference. NYPIRG appeared through Lisa Garcia, Esq. and Kerry Powell, Esq.

Proceedings and Closure of the Record

The DEC issues conference was held in the morning of May 2, 2001 and briefly reconvened in the afternoon of May 3, 2001. At the close of the DEC issues conference, a schedule was set to allow NYPIRG to submit a late petition for party status that included its comments as proposed issues, for the parties and Queens/CHOKE to comment thereon, and for NYPIRG to respond. The record of the DEC issues conference closed on May 17, 2001.

Standard for Determining Party Status

There are seven required contents of a petition for party status: (1) the identity of a proposed party and its contact person; (2) the proposed party's environmental interest in the case; (3) the identity of interests relating to statutes administered by DEC; (4) whether the petition is for full party or amicus status; (5) the proposed party's precise ground for opposition or support; (6) the identification of an issue for adjudication that is both substantive and significant; and (7) presentation of an offer of proof that specifies the proposed party's witness(es), identifies the nature of the evidence the proposed party will introduce, and what grounds the proposed party's assertion is made upon (6 NYCRR §§624.5(b)(1) &(2)).

In addition to the seven required contents of a petition for party status, a late filed petition must include three other contents: (8) a demonstration of good cause for the late filing; (9) a demonstration that participation by the proposed party will not significantly delay the proceeding or unreasonable prejudice the other parties; and, (10) a demonstration that the proposed party will materially assist in the determination of issues raised in the proceeding.

Discussion of Party Status

Queens/CHOKE and NYPIRG both submitted petitions for party status in the DEC proceeding. While both petitions received were filed after the due date specified in the hearing notice, only NYPIRG's petition is being treated as a late filed petition because Queens/CHOKE timely requested an extension to file its petition and NYPIRG did not.

DEC Issue #1: Queens/CHOKE's request for party status

Queens/CHOKE's petition is adequate. In addition, Queens/CHOKE has demonstrated its environmental interest in this matter. However, as discussed later, it has failed to propose an issue for adjudication that is both substantive and significant. Therefore, pursuant to 6 NYCRR 624.5(d)(1):

DEC Ruling #1: Queens/CHOKE is denied party status.

DEC Issue #2: NYPIRG's request for party status

NYPIRG's late filed petition is also adequate. However, NYPIRG has failed to make a demonstration of good cause for the late filing. NYPIRG makes no explicit statement regarding its good cause for its late petition. Implicitly, the good cause seems to be because it made a mistake or "accidental omission" regarding the date it filed its petition. Specifically, NYPIRG states that it had applied for party status in the Article X proceeding on September 21, 2000 and incorrectly assumed that this request for party status would grant it party status in the DEC issues conference. However, NYPIRG had in its possession a copy of the DEC hearing notice and had read at least the first four pages thereof, because NYPIRG sent its comments to the appropriate DEC Staff member. On the middle of the fourth page was an explanation of how party status in a DEC hearing could be requested. Apparently, this was NYPIRG's mistake. For the regulations to have any meaning at all, sophisticated practitioners of environmental law, such as NYPIRG, must meet the time frames established or show good cause why deadlines were not met. The claim of a simple mistake in these circumstances is not acceptable.

Although party status is denied on these grounds, I will review NYPIRG's petition as if it were timely, and do so based upon my discretion (6 NYCRR 624.5). As discussed later, NYPIRG has failed to propose any issue for adjudication that is both substantive and significant. Therefore, pursuant to 6 NYCRR 624.5(d)(1):

DEC RULING #2: NYPIRG's late filed petition for party status is denied for failure to demonstrate good cause and failure to propose a substantive significant issue.

Standard for Determining Issues

In this case there are no issues between DEC Staff and the Applicant. DEC Staff has determined that the proposed project, as conditioned by the draft permits, will conform to all applicable statutory and regulatory requirements. Therefore, the burden of persuasion is on the prospective party advancing an issue: (1) to show that the proposed issue is both substantive and significant; and, (2) to present an offer of proof specifying the witness or witnesses, the nature of the evidence the prospective party expects to present, and the grounds upon which the assertion is made with respect to that issue (6 NYCRR 624.5(b)(2)).

An issue is substantive if there is sufficient doubt about the Applicant's ability to meet the applicable statutory or regulatory criteria such that a reasonable person would inquire further. To determine whether an issue is substantive, the Associate Examiner must consider the proposed issue in light of the application and related documents, the draft permit, the content of any petitions filed for full party status, the record of the issues conference and any subsequent written arguments authorized by the Associate Examiner. To be substantive, the issue cannot be based merely on speculation, but on facts that can be subjected to adjudication. In addition, an issue can be demonstrated by identifying a substantive defect or omission in the application materials.

An issue is significant if the adjudicated outcome can result in permit denial, a major modification to the proposed project, or the imposition of significant conditions in addition to those proposed in the draft permit.

The Queens/CHOKE Petition

The petition for party status submitted by Queens/CHOKE proposed four issues: (1) the failure of the Applicant to analyze smaller-sized plants; (2) the failure of the Applicant to select the correct emission control technology for NOx; (3) the failure of the Applicant to consider the health impacts of the air emissions from the facility; and (4) the failure of the Applicant to properly model the air quality impacts of the project.

It should be noted that these issues are very similar to issues raised by Queens/CHOKE in another Article X proceeding, In the Matter of the Application of KeySpan Energy (Case 99-F-1625). The DEC issues conference in that proceeding occurred on April 5, 2001. In her issues ruling in KeySpan, DEC ALJ Helene Goldberger denied Queens/CHOKE's petition for party status andfound that the four issues proposed did not warrant adjudication. Since the issues are similar in this matter, ALJ Goldberger's issues ruling (issued April 18, 2001) provides useful insights for my independent assessment of these issues, presented below.

DEC Issue #3: Smaller-sized plants

The first issue raised by Queens/CHOKE is whether the Applicant failed to comply with legal requirements that it analyze the costs and benefits of smaller plants compared to the proposed project. Specifically, Queens/CHOKE states that the Applicant's proposal fails to demonstrate compliance with 6 NYCRR 231-2.4(a)(2)(ii) which requires that the applicant submit "an analysis of alternative sites, sizes, production processes, and environmental control techniques for such proposed source which demonstrates that benefits of the proposed source significantly outweigh the environmental costs imposed as a result of its location, construction or modification within New York State; . . ." Queens/CHOKE seeks to adjudicate whether the same benefits could be achieved by the construction of a 250 MW plant, a 500 MW plant, or a 750 MW plant.

Both DEC Staff and the Applicant oppose advancing this issue to adjudication. The Applicant asserts that the statements made by Queens/CHOKE in its petition and at the issues conference regarding this issue are simply conclusory in nature and do not meet the standard for establishing an adjudicatory issue under the DEC hearing regulations (6 NYCRR Part 624). In addition, the Applicant asserts that an adequate analysis of alternatives was included in its application. The Applicant requests that this issue not be found adjudicable because Queens/CHOKE has not made a sufficient offer of proof regarding this proposed issue.

DEC Staff also asserts that Queens/CHOKE has not met the standard for proposing an adjudicable issue. Conclusory statements without an adequate explanation of how an issue may affect the draft air pollution control permit do not meet the burden of persuasion imposed upon the Intervenors to demonstrate a substantive and significant issue exists for adjudication. In addition, DEC Staff asserts that the legal basis for this issue (the language from Part 231 quoted above) has been misinterpreted by Queens/CHOKE. Specifically, DEC Staff argues that the analysis of alternatives required by Part 231 does not include the requirement that smaller projects be considered by a project sponsor and that the Applicant was not required to study the impacts of a 250 MW, a 500 MW, or a 750 MW power plant in its application materials.

While not directly on point, DEC Staff cites a U.S. Environmental Protection Agency (EPA) Environmental Appeals Board case, In re Campo Landfill Project (1996 WL 344522(EPA)). In Campo, Intervenors sought review of EPA's decision to issue an air pollution permit for a landfill based on the failure to conduct an analysis of alternative sites, sizes, production processes, and environmental control techniques for such proposed source demonstrating that benefits of the proposed source significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification (Clean Air Act (CAA) §173(a)(5)). In its decision denying the Intervenors' request, the Environmental Appeals Board noted that the CAA contains no express requirements concerning the particular contents of an alternatives analysis nor has EPA promulgated any regulations regarding this analysis interpreting this statutory language. The Environmental Appeals Board refused to disturb the alternatives analysis which was based upon information contained within the Environmental Impact Statement (EIS), even though no examination of alternative sites was done.

DEC Staff argues that in this case, the Article X application is the equivalent of an EIS and that the alternatives analysis required under Part 231 (which was enacted to conform with the CAA is adequate and need not examine alternative-sized plants.

I concur with DEC Staff and the Applicant on this point and find that there is no requirement under Part 231 that an analysis of smaller-sized plants be presented by the Applicant. In addition, it is clear from the record that Queens/CHOKE has not presented an offer of proof specifying the nature of the evidence it expects to present at an adjudicatory hearing nor have they specified the grounds upon which its assertions on this issue are based. Queens/CHOKE has only provided vague assertions regarding the costs and benefits of smaller plants.

Where, as here, DEC Staff has reviewed the application and found it meeting regulatory requirements, the burden of persuasion that substantive and significant issues exist is on the intervenors. See, In the Matter of the Application of LILCO, Commissioner's Decision (November 1, 1988) citing Matter of Halfmoon Water Improvement District No. 1, Interim Decision of the Commissioner (April 2, 1982). Queens/CHOKE has not met this burden.

DEC RULING #3: I do not find the first issue raised by Queens/CHOKE regarding an analysis of smaller sized plants to be an adjudicable issue because it is based on a misinterpretation of Part 231 and because the offer of proof fails to meet the regulatory standard.

DEC Issue #4: NOx controls: SCR v. SCONOx

The second issue raised by Queens/CHOKE challenges the Applicant's decision to use selective catalytic reduction (SCR) to control NOx rather than SCONOx, a system which reduces emissions without the use of ammonia. This issue is also based upon the language in Part 231 quoted in Issue #1, above. Queens/CHOKE argues that using SCONOx would reduce particulate emissions, as well as eliminate risks associated with the use of ammonia. In addition, Queens/CHOKE asserts that the use of SCONOx would reduce the amount of NOx emitted from 2 parts per million (ppm) to 1 ppm.

The CAA requires the Lowest Achievable Emissions Rate (LAER) for all new NOx sources in Queens. Queens/CHOKE asserts that SCONOx is LAER for NOx based upon the allegation that SCONOx will achieve an emissions rate of 1 ppm instead of the 2 ppm that SCR achieves. Queens/CHOKE only made a conclusory statement regarding this additional NOx reduction and offered no support for this claimed reduction.

Both DEC Staff and the Applicant oppose advancing this issue to adjudication. The Applicant asserts that Queens/CHOKE failed to identify any competent witness to testify that SCONOx could be used on a plant the size of the proposed project (1,000 MW) and that the offer of proof is insufficient. Regarding the merits of Queens/CHOKE's proposed issue, the Applicant asserts that SCONOx pollution control technology should be considered experimental. The Applicant asserts this technology has only been used on turbines which are much smaller than the turbines proposed in this case. In addition, SCONOx is only recommended by the manufacturer for use in plants that are fired entirely by compressed natural gas and that the sulfur in the backup fuel for this project would foul the SCONOx unit potentially resulting in diminished power production and/or increased air pollution.

DEC Staff notes that the offer of proof in this case is very similar to the offer of proof made in Keyspan and that the ruling by ALJ Goldberger against adjudication should dictate the result here. DEC Staff asserts that, because SCONOx has not been used on facilities larger than 30 MW and has only been used on facilities run exclusively on natural gas, SCONOx is experimental. Since it is an experimental technology, DEC Staff continues, it cannot be considered LAER because any promised emission benefits are not achievable when used in a large scale, commercial application. In addition, since the Borough of Queens is in attainment with the standard for particulate matter established in the CAA, the Applicant was not required to use LAER to control the emission of particulates. Regarding the claim by Queens/CHOKE that SCONOx could provide an emission rate of 1 ppm for NOx, DEC Staff states that it believes such an emission rate is not achievable, based on its research. In addition, Queens/CHOKE did not provide any offer of proof to challenge this conclusion.

The Applicant has adequately performed the alternatives analysis required by 6 NYCRR 231-2.4(a)(2)(ii) in the application by comparing the available technologies and concluding reasonably that the use of SCONOx in the Astoria facility would be too risky given the lack of experience with this technology by other similar facilities in the country (see section 4.7 of the Application). While the ALJ in the Con Edison case came to a different conclusion, the difference is based upon the record specific to that proceeding -- Manhattan is in non-attainment for particulates. (See, Consolidated Edison, supra, p. 29.)

In contrast, ALJ Casutto found in the Mirant Bowline, LLC (Case 99-F-1164) issues ruling of March 30, 2001, p. 19 that "[t]he SCONOx technology is not an alternative technology that could provide an emission limitation reasonably expected to occur in practice for turbines larger than 25 MW." On that basis, the ALJ determined that consideration of SCONOx was not a substantive and significant issue suitable for adjudication. In addition, ALJ Goldberger, on a record very similar to the record in this case, determined that the issue of a SCONOx alternative was not adjudicable. I find likewise. The use of SCR at the Astoria facility will meet the regulatory requirements. This facility, as a source of electric power for the public, cannot be the basis for an experiment with a technology that heretofore has not been proven in such large plants.

DEC RULING #4: I find that there is no issue for adjudication with respect to the use of SCR rather than SCONOx.

DEC Issue #5: Health impacts of the air emissions from the project

The third issue raised by Queens/CHOKE is also based upon the alternatives language found in Part 231 and quoted in Issue #3 above. In its petition, Queens/CHOKE describes the issue as how the proposed project's potential emissions of particulate matter (PM-10) and non-criteria pollutants will affect the health of the residents of northwest Queens, and how the environmental and social costs of the project may not significantly outweigh the benefits of the project. When asked to elaborate on the issue at the issues conference, Queens/CHOKE gave a confusing response in which they assert that the Applicant failed to adequately explore the health effects and social costs of the project.

DEC Staff and the Applicant both oppose the adjudication of this issue and also seem to have been confused by the explanation of this issue presented at the issues conference. The Applicant asserts that Queens/CHOKE failed to make any offer of proof on this issue, nor did they allege that the analysis contained within the application was defective or erroneous.

DEC Staff notes that the Borough of Queens is in attainment for particulate matter and, therefore, Part 231 is not applicable. Thus, this matter properly lies within the realm of the federal Prevention of Significant Deterioration (PSD) application. DEC Staff went on to state that matters relating to the PSD application are not subject to an adjudicatory hearing by DEC because the PSD program is administered by DEC pursuant to federal regulation, and is not subject to either the Uniform Procedures Act (Article 70 of the Environmental Conservation Law [ECL]) or the State Administrative Procedures Act (SAPA). (See, Matter of the Application of Ramapo Energy Limited Partnership, ALJ Ruling (April 9, 2001).) Thus, DEC Staff assert, this issue cannot be adjudicated in the DEC hearing process. In regards to non-criteria pollutants, DEC Staff stated that these pollutants are regulated by the NYS Department of Health (DOH).

Where, as here, DEC Staff has reviewed the application and found it meeting regulatory requirements, the burden of persuasion that substantive and significant issues exist is on the Intervenors. The Intervenors have not met this burden. They have failed to adequately explain the issue, they have failed to demonstrate that the application is in some way faulty, and they have failed to make an adequate offer of proof regarding what evidence they would offer at any future adjudicatory hearing. The nebulous nature of this issue, combined with lack of jurisdiction for a DEC hearing to examine the issue lead to the inescapable conclusion that this is not an issue for adjudication.

DEC RULING #5: Queens/CHOKE has failed to show that this issue is an adjudicable issue.

DEC Issue #6: Computer modeling

The fourth and last issue raised by Queens/CHOKE in their petition relates to alleged errors in the Applicant's computer modeling of air pollution impacts on neighborhoods surrounding the plant. Specifically, it is alleged that flaws in the modeling may have resulted in an understatement of the adverse environmental and health impacts of the proposed project. At the issues conference, Queens/CHOKE described this issue as having two parts: first, that the receptor grid used in the modeling only used receptors that were 1,000 meters apart and that this missed the most significant impacts of the plant; and second, that inputs used in modeling, specifically emission rates, were inappropriately lowered, thus lowering the output of the model and underestimating the health impacts of the proposed project. This underestimation of health impacts, Queens/CHOKE continued, would have an adverse impact on minority and low income residents surrounding the plant.

Both DEC Staff and the Applicant oppose adjudicating this issue. The Applicant states that the Intervenor's assertion regarding the grid were factually incorrect and that all inputs used in the modeling were based upon the manufacturer's guarantees for the pollution control equipment.(1) DEC Staff also disputes the Intervenor's assertions regarding the grid size and explains that the initial modeling did use a larger grid size, but this was used to identify areas where pollution concentrations would be the highest. Following this initial analysis, a refined grid was developed using a spacing of 50 meters.(2) Therefore, the modeling did closely examine the health impacts of the proposed project.

Again, the Intervenors have failed to meet the burden of persuasion placed on them by the regulations. They have failed to identify an issue for adjudication because they have failed to demonstrate that the application is in some way faulty, and they have failed to make an adequate offer of proof regarding what evidence they would offer at any future adjudicatory hearing. In addition, the hint of an environmental justice issue linked to public health is unsupported by any offer of proof that low-income or minority populations reside near the facility, that such populations would be disproportionately affected, or that the proposed project's emission rates fail to meet applicable air quality standards; such an issue would not properly be raised in this forum, in any event.(3)

DEC Ruling #6: Queens/CHOKE has failed to demonstrate that this is an adjudicable issue.

NYPIRG'S late filed petition for party status

NYPIRG's petition contains 37 comments on the draft air pollution control permit. It is clear from the form which these issues take in the petition, that NYPIRG intended these to be comments and not issues proposed for adjudication. However, NYPIRG has submitted these comments as proposed issues and each is dealt with individually below. None of these issues rises to the level of adjudication on the merits. In addition, the only witness proposed by NYPIRG is Kerry Powell who is an attorney with expertise on air pollution control issues. There is no mention in NYPIRG's petition of any potential witnesses with any engineering or technical expertise.

NYPIRG's comments have been taken into account by DEC Staff and changes have been made to the draft permit based upon those comments, as further explained below.

DEC Issue #7: The draft permit distorts the annual compliance certification requirements

NYPIRG asserts that DEC Staff has incorrectly applied federal law by not requiring that the Applicant certify compliance with every permit condition every year. Specifically, NYPIRG alleges that the Clean Air Act §114(a)(3), 40 CFR §70.6(c)(5), as well as 6 NYCRR 201-6.5(e) (the state regulation implemented to mirror federal law) requires this annual certification of all permit conditions. DEC Staff disagrees with NYPIRG's assertion and points to conditions 25 and 26 of the draft permit which require both semi-annual compliance certification and semi-annual compliance reporting. This permit condition satisfies NYPIRG's comment.

DEC RULING #7: This issue is not adjudicable.

DEC Issue #8: The draft Permit does not contain general language regarding the credible evidence rule

NYPIRG disputes DEC Staff's decision not to include clear language that states that all credible evidence can be used by DEC, EPA, members of the public, and the Applicant in demonstrating whether the facility is in compliance with federally-enforceable requirements. To support their position, NYPIRG relies upon a letter sent by USEPA to Ohio and another sent to Indiana. DEC Staff asserts, in the interest of brevity, all legal standards and definitions relevant to the permit are not included because they can be found elsewhere and have the same legal force and effect whether they are recited in the permit or not. This issue is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #8: This issue is not adjudicable.

DEC Issue #9: The draft permit is contrary to federal law because it sanctions violations

NYPIRG asserts that the draft permit violates federal law because it sanctions systematic violations during startup/shutdown, malfunction, maintenance, and upset conditions. DEC Staff responds that it intends to amend the draft permit to ensure that permit limits apply at all times, including during startup, shutdown and malfunction. This issue is resolved.

DEC Ruling #9: This issue is not adjudicable.

DEC Issue #10: The draft permit does not include certain limitations contained in EPA guidance

NYPIRG asserts that the draft permit does not include certain limitations contained in EPA guidance. DEC does not have the authority to override EPA guidance in matters regarding a delegated permit. While NYPIRG would like to have specific information from the guidance repeated in the permit, there is no requirement that such is required, nor does its exclusion weaken its force and effect.

DEC Ruling #10: This issue is not adjudicable.

DEC Issue #11: The draft permit should state that no violations of federal requirements may be excused

NYPIRG asserts that the draft permit should state that no violations of federal requirements may be excused. DEC Staff responds that this is unnecessary because condition 5 of the draft permit is as explicit as necessary and does not excuse or diminish the accountability of the Applicant for pollution excedances. DEC Staff notes that it does not have the power to override federal law and cannot exercise more discretion than federal requirements allow. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #11: This issue is not adjudicable.

DEC Issue #12: The draft permit lacks definitions of significant terms

NYPIRG asserts that the draft permit lacks definitions of the significant terms unavoidable terms "upset" and "unavoidable". DEC Staff asserts that these terms are not defined in federal or state regulations and quotes definitions from the dictionary. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #12: This issue is not adjudicable.

DEC Issue #13: The draft permit does not define "Reasonably Available Control Technology" as it applies during startup, shutdown, malfunction, and maintenance conditions

NYPIRG asserts that the draft permit should define "Reasonably Available Control Technology" as it applies during startup, shutdown, malfunction, and maintenance conditions. DEC Staff responds that the definition is found in the applicable regulations (6 NYCRR 227-2) and it is not necessary to include the definition in the permit. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #13: This issue is not adjudicable.

DEC Issue #14: The draft permit does not require prompt written reports of permit deviations due to startup, shutdown, malfunction and maintenance

NYPIRG asserts that the draft permit does not require prompt written reports of permit deviations due to startup, shutdown, malfunction and maintenance. DEC Staff agrees and will amend the draft permit so that the reporting of all deviations during startup, shutdown, malfunction and maintenance will be treated exactly the same as the reporting of deviations during other times of operation. This issue is resolved.

DEC Ruling #14: This issue is not adjudicable.

DEC Issue #15: The draft permit does not require prompt reporting of all deviations from permit requirements

NYPIRG asserts that the draft permit does not require prompt reporting of all deviations from permit requirements as mandated by 40 CFR §70.6(a)(3)(iii)(B). DEC Staff responds that condition 5 of the draft permit clearly states that deviations from permit requirements are to be reported promptly. DEC Staff asserts that the permit complies with all applicable federal and state requirements. This is a legal dispute without any factual controversy and as such is not adjudicable.

DEC Ruling #15: This issue is not adjudicable. DEC Issue #16: The draft permit does not include federally enforceable conditions that govern the procedures for permit renewal.

NYPIRG asserts that the draft permit does not include federally enforceable conditions that govern the procedures for permit renewal. DEC Staff asserts that this is a minor drafting dispute. DEC Staff cites draft permit conditions 14 and 18 which address the permit renewal process. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #16: This issue is not adjudicable.

DEC Issue #17: The draft permit does not ensure compliance because some permit conditions lack adequate monitoring and are not practicably enforceable

NYPIRG asserts that the draft permit does not ensure compliance because some permit conditions lack adequate monitoring and are not practicably enforceable. DEC Staff disagrees and states that many of the permit conditions cited by NYPIRG are verbatim recitations of the regulation which mandate certain actions without periodic monitoring. In addition, DEC Staff states that these draft permit conditions are fully enforceable and have passed EPA review without comment. This dispute is a policy dispute in which NYPIRG asserts more monitoring would be better. However, NYPIRG does not assert in their petition why it would be better, what legal authority requires more monitoring, nor does it identify a competent technical witness on this issue.

DEC Ruling #17: This issue is not adjudicable.

DEC Issue #18: The draft permit does not include an emergency backup diesel generator

NYPIRG asserts that the Applicant will have an emergency backup diesel generator onsite and that the emissions from this source of air pollution are not contained within the draft permit. DEC Staff responds that NYPIRG is mistaken and that the Applicant will have a diesel fire pump, not a generator onsite. DEC Staff will amend the permit to regulate the operation of this fire pump by limiting the number of hours of operation to 500 hours and to require a stringent emission limit for particulates. This matter is resolved.

DEC Ruling #18: This issue is not adjudicable. DEC Issue #19: Condition 6 of the draft permit lacks a definition of "emergency"

NYPIRG asserts that the lack of a definition of the word "emergency" in condition 6 of the draft permit requires adjudication. DEC Staff and the Applicant oppose and note that a definition is found in the relevant section of the regulations (6 NYCRR 201-2.1(b)(12)). This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #19: This is not an adjudicable issue.

DEC Issue #20: The draft permit does not specify monitoring and record keeping requirements for air contaminants collected in air cleaning devices

NYPIRG asserts that the draft permit does not specify monitoring and record keeping requirements for air contaminants collected in air cleaning devices. DEC Staff disagrees and states that the language at issue here is a mandatory condition of all Title V air pollution control permits. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project, or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #20: This is not an adjudicable issue.

DEC Issue #21: The draft permit inadequately describes the specific regulatory provision authorizing each permit condition

NYPIRG asserts that the draft permit inadequately describes the specific regulatory provision authorizing each permit condition. DEC Staff disagrees and does not believe more description would benefit the enforceability of the permit. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #21: This is not an adjudicable issue.

DEC Issue #22: The draft permit is too vague regarding the criteria applicable to the permit

NYPIRG asserts that thedraft permit is too vague regarding the criteria applicable to the permit. DEC Staff disagrees and states that the language at issue here is a standard condition of all Title V air pollution control permits. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #22: This is not an adjudicable issue.

DEC Issue #23: The draft permit should specify whether CAA section 112(r) regarding the "prevention of accidental releases" applies

NYPIRG asserts that the draft permit should specify whether CAA section 112(r) regarding the "prevention of accidental releases" applies. DEC Staff responds that the language regarding the prevention of accidental releases is generic language reaffirming the Applicant's responsibility to submit a risk management plan if the Accidental Release Provisions apply to the facility. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #23: This is not an adjudicable issue.

DEC Issue #24: The draft permit should specify a fee schedule

NYPIRG asserts that the draft permit should specify a fee schedule. DEC Staff disagrees and believes the fee schedule properly belongs in regulation. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #24: This is not an adjudicable issue.

DEC Issue #25: The draft permit is ambiguous regarding the "enforcement shield" provision

NYPIRG asserts that the draft permit is ambiguous regarding the "enforcement shield" provision and that DEC's right to enforce the provisions of the permit could be interfered with. DEC Staff disagrees and states that the permit adequately preserves the rights of not only DEC but also EPA and the public to enforce provisions of the permit. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #25: This is not an adjudicable issue.

DEC Issue #26: The draft permit does not require the permittee to bear the costs associated with measuring emissions

NYPIRG asserts that the draft permit does not require the permittee to bear the costs associated with measuring emissions. DEC Staff disagrees and states that the burden for paying these costs is squarely upon the Applicant by operation of law (6 NYCRR 202-1.1). This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #26: This is not an adjudicable issue.

DEC Issue #27: Condition 31 of the draft permit is ambiguous regarding which pollutants are covered by the emissions statements

NYPIRG asserts that condition 31 of the draft permit is ambiguous regarding which pollutants are covered by the emissions statements. DEC Staff disagrees and states there is no requirement that this information be contained within a permit. The regulations specify what information may be utilized to calculate emissions and this need not be recited in the permit. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #27: This is not an adjudicable issue.

DEC Issue #28: Condition 38 of the draft permit uses the word "proposes" which should be changed to "permitted"

NYPIRG asserts that condition 38 of the draft permit uses the word "proposes" which should be changed to "permitted". DEC Staff agrees. The issue is resolved and moot.

DEC Ruling #28: This issue is not adjudicable.

DEC Issue #29: Conditions 42 and 43 of the draft permit are contradictory and it is unclear whether a Continuous Opacity Monitor will be required

NYPIRG asserts that conditions 42 and 43 of the draft permit are contradictory and it is unclear whether a Continuous Opacity Monitor will be required. DEC Staff concurs and the permit will be amended to remove condition 42. The issue is resolved.

DEC Ruling #29: This issue is not adjudicable.

DEC Issue #30: Condition 44 of the draft permit does notprovide sufficient detail regarding record keeping requirements

NYPIRG asserts that condition 44 of the draft permit does not provide sufficient detail regarding record keeping requirements. DEC Staff disagrees and state that this condition is take directly from 40 CFR Subpart A and other specific requirements, where applicable are included. This is a drafting dispute and is not significant because it does not have the potential to result in the denial of a permit, a major modification to the proposed project or the imposition ofsignificant permit conditions in addition to those proposed in the draft permit.

DEC Ruling #30: This is not an adjudicable issue.

DEC Issue #31: Condition 62 of the draft permit does not specify the sources of all emission reduction credits

NYPIRG asserts that condition 62 of the draft permit does not specify the sources of all emission reduction credits that the Applicant will use. DEC Staff acknowledges this fact and has published "Notice of Use of Emission Reduction Credits" which identifies the sources of all emission reduction credits. Thus, this issue is resolved.

DEC Ruling #31: This is not an adjudicable issue.

DEC Issue #32: Condition 63 of the draft permit should specify that all reports should be submitted quarterly, not annually

NYPIRG asserts that condition 63 of the draft permit should specify that all reports should be submitted quarterly, not annually. DEC Staff concurs and the permit will be amended to reflect this. Thus the issue is resolved and moot.

DEC Ruling #32: This issue is not adjudicable.

DEC Issue #33: Condition 64 of the draft permit does not require the Applicant to test and monitor its emissions of ammonia

NYPIRG asserts that condition 64 of the draft permit does not require the Applicant to test and monitor its emissions of ammonia. DEC Staff states that it intends to rewrite condition 64 to clearly state that continuous emissions monitoring for ammonia is required. Thus, this issue is resolved.

DEC Ruling #33: This issue is not adjudicable.

DEC Issue #34: Condition 78 of the draft permit is unenforceable and should be made more specific and then the entire permit must be re-released for public comment

NYPIRG asserts that condition 78 of the draft permit is unenforceable and should be made more specific and then the entire permit must be re-released for public comment. DEC Staff concurs with NYPIRG regarding specificity and will include a reference to the federal EPA approval process. In addition, a statement will be added to the effect that any EPA-approved schedule shall become and enforceable attachment to this permit. DEC Staff does not address the issue of re-releasing the permit for public comment, but the Applicant does. The Applicant asserts that there is no reason for to re-release the permit for another round of public comment. NYPIRG cites no legal authority for its request. I concur with the Applicant that there is no basis to submit the awarded draft permit to further public review.

DEC Ruling #34: The issue is resolved and not adjudicable.

There is no basis to re-release the draft permit for an additional public comment period and therefore NYPIRG's request is denied.

DEC Issue #35: Condition 70 of the draft permit which requires annual reporting of opacity monitoring should be changed to require semi-annual reporting

NYPIRG asserts that condition 70 of the draft permit which requires annual reporting of opacity monitoring should be changed to require semi-annual reporting. DEC Staff concurs and the permit will be amended to reflect this. Thus the issue is resolved and moot.

DEC Ruling #35: This issue is not adjudicable.

DEC Issue #36: The draft permit should increase the emissions testing so that annual testing is conducted

NYPIRG asserts that the draft permit should increase the emissions testing so that annual testing is required. DEC Staff disagrees and asserts that testing once per term of the permit (every 5 years) is adequate and has been approved by EPA. This is a policy dispute between DEC Staff and NYPIRG and not adjudicable.

DEC Ruling #36: This issue is not adjudicable.

DEC Issue #37: Condition 89 of the draft permit regarding the emission limit for particulates is unenforceable and internally inconsistent

NYPIRG asserts that condition 89 of the draft permit regarding the emission limit for particulates is unenforceable and internally inconsistent. DEC Staff concurs and will amend the condition to make the emission limit 0.01 lb/mmBtu. Thus the issue is resolved and moot.

DEC Ruling #37: This issue is not adjudicable.

DEC Issue #38: Condition 102 of the draft permit regarding opacity monitoring is too vague and should be modified to increase the amount of testing and monitoring

NYPIRG asserts that condition 102 of the draft permit regarding opacity monitoring is too vague and should be modified to increase the amount of testing and monitoring. DEC Staff agrees that condition 102 needs redrafting and will do so. However, DEC Staff disagrees with NYPIRG regarding the need for increased testing and monitoring. DEC Staff will only require initial performance testing with no subsequent testing, as required by the regulations. This dispute is a policy dispute in which NYPIRG asserts more monitoring would be better. However, NYPIRG does not assert in their petition why it would be better, what legal authority requires more monitoring, nor does it identify a competent technical witness on this issue.

DEC Ruling #38: This issue is not adjudicable.

DEC Issue #39: Condition 34 of the draft permit should include a statement describing how the new NOx Budget Rule is to be applied

NYPIRG asserts thatthe draft permit should include a statement describing the new NOx Budget Rule. DEC Staff disagrees and does not believe such a description is necessary. This is a difference of opinion since there is no legal requirement that such a discussion be included in the permit. This issue is not significant because the outcome of this dispute will not result in permit denial, a major modification to the project or the imposition of significant conditions in addition to those proposed in the draft permit. Because the issue is not significant it cannot be adjudicable.

DEC Ruling #39: This issue is not adjudicable.

DEC Issue #40: The permit conditions regarding the enforcement of opacity standards should be changed

NYPIRG asserts that permit conditions regarding the enforcement of opacity standards should be changed. Specifically, the cite in the draft permit to a reference test method 9 in Appendix A of 40 CFR 60 as the exclusive method for determining compliance violates 6 NYCRR 227-1.3(b) regarding the credible evidence rule. DEC Staff responds that the reference method is not meant to exclude the use of other credible evidence. This clarification resolves this issue.

DEC Ruling #40: This issue is not adjudicable.

DEC Issue #41: A provision should be added to the draft permit to require an annual full particulate matter test and more frequent monitoring

NYPIRG asserts that the draft permit should require annual testing for particulate emissions. DEC Staff maintains that testing need only occur once per term of the permit (5 years) and that EPA has approved. This is a policy dispute and not a factual matter suitable for adjudication.

DEC Ruling #41: This issue is not adjudicable.

DEC Issue #42: The draft permit should be modified to include a sulfur content limit in the backup fuel

NYPIRG asserts that the draft permit should be modified to include a sulfur content limit in the backup fuel. DEC Staff refers to the draft permit, which establishes a sulfur content of 0.033%. There is no issue here.

DEC Ruling #42: This issue is not adjudicable.

DEC Issue #43: The conditions of the draft permit regarding Volatile Organic Compounds (VOCs) should identify the testing method for emissions

NYPIRG asserts that the conditions of the draft permit regarding Volatile Organic Compounds (VOCs) should identify the testing method for emissions. DEC Staff concurs and will revise the permit to include the appropriate methodology for testing VOCs. This issue is resolved and not adjudicable.

DEC Ruling #43: This issue is not adjudicable.

In addition, DEC Staff has corrected a number of errors in regulatory citations suggested by NYPIRG.

Appeals of DEC Issues Ruling

A ruling of the DEC Associate Examiner to include or exclude any issue for adjudication, a ruling on the merits of any legal issue made as part of an issues ruling, or a ruling affecting party status may be appealed to the DEC Commissioner on an expedited basis and should be filed to the DEC Commissioner within five days of the disputed ruling (6 NYCRR 624.8(d)(2); 624.6(e)(1).) I am allowing that any appeals of DEC Rulings 1-43 above must be in writing and received by the DEC Commissioner (Office of the Commissioner, NYS Department of Environmental Conservation, 50 Wolf Road, Albany, New York, 12233-1010) before 4:00 p.m. on June 1, 2001. Replies are authorized and must be received by the DEC Commissioner before 4:00 p.m. on June 8, 2001. Appeals should address the ALJ's ruling directly rather than merely restate a party's contentions. Parties shall serve each other by the same dates as filing is required in the Commissioner's office. This appeals schedule does not modify the schedule set forth in the established hearing schedule dated March 12, 2001. Appeals and replies must be submitted to the DEC in triplicate, with two of the three copies to ALJ Garlick. No faxes or e-mail submissions will be allowed or accepted.

PART III: ARTICLE X ISSUES CONFERENCE

Appearances

Unlike the DEC Issues Conference, all parties have been granted party status in the Article X proceeding prior to the issues conference. The parties as well as those who appeared therefore are listed below. The Applicant appeared through its attorneys: Algrid F. White, Jr., Esq., Leonard Singer, Esq., and James King, Esq. of the law firm of Couch White, LLP., Albany, NY. Also present for the Applicant were William G. May, Michael K. Anderson and Charles Cooper. DPS Staff appeared through David G. Drexler, Esq., of DPS Staff. Also present from DPS Staff were Andrew Davis and Alan Domaracki. DEC Staff appeared through Franz T. Litz, Esq. and Jennifer L. Hairie, Esq. Also present from DEC Staff were Leon Sedefian, Mike Jennings, John J. Ferguson and John Weidman. The New York State Department of Health appeared through Anthony Grey, Ph.D., and Frank J. Decotis, Esq. The New York Power Authority appeared through James D. Lyons, Esq. and Michael Oxman.

New York City Economic Development Corporation(EDC) appeared through Richard B. Miller, Senior Vice-President. Queens/CHOKE appeared through Hugh Weinberg, Esq., Counsel to the Queens BP, and David Schlissel of Synapse Energy Economics. Also present for Queens/CHOKE were Daniel Gutman and Rudy Sarchese. NYPIRG appeared through Lisa Garcia, Esq. and Kerry Powell, Esq. New York Institute of Legal Research appeared through Herman A. Stuhl, Chairman of the Board. The Citizen's Environmental and Economic Coalition (CEEC) did not attend.

Standard for Determining Issues

The Boards administrative review process differs slightly from the process used by DEC. Unlike the DEC process where a draft permit is prepared and circulated prior to the issues conference, in the Board's process the draft certificate will not be prepared until after the issues have been identified for adjudication.

Another difference between the two administrative review processes is the standard for determining whether a proposed issue should be adjudicated. As discussed above, in the DEC administrative review process the standard is "substantive and significant". DEC regulations define these terms and a considerable amount of both administrative and judicial case law has been developed over the years. In contrast, the standard used in the Board's administrative process is less well defined. The standard to be applied to proposed issues is "material and relevant" (PSL §167(1)(a)). This term is not defined in the Public Service Law. Black's Law Dictionary defines "material" as important and going to the merits, and it defines "relevant" as applying to the matter in question. Thus, we have used these definitions in determining whether the proposed issue meets the standard for adjudication in the Board's administrative review process. We note, however, that the difference in the standards between the DEC process and the Board's process is not great.

Another major difference between DEC's process and that used by the Board is the offer of proof that a party must make to take a proposed issue to adjudication. In DEC's regulations, a party proposing an issue must present an offer of proof prior to or at the issues conference that includes the witnesses to be called, the nature of the evidence to be presented, and the grounds upon which the issue is asserted for adjudication (6 NYCRR 624.5(b)). There is no similar requirement for the Board's administrative process. In the Board's process, a party need only identify an issue that is material and relevant for that issue to be advanced to adjudication. This difference stems from the fact, noted earlier, that at this stage of the proceeding there are no draft certificate conditions, analogous to the draft DEC permits, already developed and approved by responsible government agencies.

Another important consideration in determining the issues for Article X adjudication is that, in our view, the Board's responsibilities do not encompass review of issues covered in the DEC permitting processes. As we indicated earlier, the Applicant needs two distinct approvals, one from DEC and one from the Board. The DEC approvals relate to environmental regulatory programs delegated to DEC by the U.S. EPA. Air and water pollution control permits issued under this delegation define the permissible, minimized environmental impacts covered by these programs.

Queens/CHOKE request adjudication as Article X issues of the same issues presented in the DEC proceedings, discussed above, arguing that PSL §168 requires a full environmental review by the Board, and its own determinations on those issues. We disagree. Section 168 should be interpreted in light of the possibility, inherent in the statute, that the federal EPA delegations could have been made to the Board. Regardless, all of the necessary findings can be made on the basis of DEC permits, if issued. Because the permits constitute an environmentally regulated basis for constructing and operating the plant, moreover, the air and water impacts addressed in the permits would generally constitute a neutral, but never a negative, factor in the Board's overall balancing of the proposal's benefits and detriments.(4) In short, the Board cannot, consistent with the federal delegation to DEC, address the issues addressed in the DEC permitting process.

Proceedings and Closure of the Record

The Article X issues conference began in the afternoon of May 2, 2001 and continued during the following morning. Following the adjournment of the issues conference on May 3, 2001, the Presiding Examiner directed the parties to report by May 22, 2001 regarding the progress of ongoing negotiations to resolve issues among the parties. Such reports were timely received and the issues conference record closed on May 22, 2001. As a result of negotiations, DPS Staff reported the settlement of one proposed issue. No other issues were resolved.

Issues Proposed by DPS Staff

The staff of the Department of Public Service (DPS Staff) proposed eight issues for adjudication. Each is discussed in detail below.

Article X Issue #1: Visual impacts

The first issue proposed by DPS Staff (and the fourth issue proposed by Queens/CHOKE) involves allegations surrounding the visual impact of the plant structure and the flue plumes. DPS Staff and Queens/CHOKE desire to examine whether there are any additional strategies and opportunities for minimizing any adverse visual impacts, including architectural treatment and plume abatement considerations. The visual impacts of the proposed project are relevant and material to the proposed certificate and certificate conditions.

Article X Ruling #1: The visual impacts of the proposed plant are material and relevant and this issue is tentatively advanced to adjudication. This issue may later be removed if it is withdrawn or if the Examiners determine that the aspects of this issue advanced for adjudication are not material or relevant.

Article X Issue #2: Electrical interconnection

The second issue proposed by DPS Staff (and the ninth issue proposed by Queens/CHOKE) involves the interconnection of proposed project to the electrical grid. DPS Staff identified the issue whether, for reliability purposes, the transmission lines should be single circuit in design. Queens/CHOKE more generally seeks to investigate possible adverse impacts of the proposed facility on the reliability of service to the residents of Queens. DPS Staff, in its May 22 status report, indicated that it has resolved to its satisfaction the question of whether the proposed facility's operation is compatible with the transmission system.

Article X Ruling #2:The interconnection of the proposed plant to the electric transmission grid is a relevant consideration. It is unclear whether there will be any material issues with respect to the impact of the interconnection on customers in Queens, but this issue will be tentatively advanced to adjudication. The issue may later be narrowed or removed if it is found not to have material aspects.

Article X Issue #3: Gas supply

The third issue proposed by DPS Staff (and the eighth issue proposed by Queens/CHOKE) is whether the proposed project's operation is compatible with the facilities and operating requirements of the gas transmission and transportation system, and also adequacy of the upstream interstate pipeline capacity and supply.

Article X Ruling #3:Gas supply issues are material and relevant and are tentatively advanced to adjudication. These issues may later be removed if withdrawn, or if the Examiners determine that aspects of these issues advanced for adjudication are not material or relevant.

Article X Issue #4: Public interest

The fourth issue proposed by DPS Staff (and part of the second issue proposed by Queens/CHOKE) is whether the record supports a finding by the Board that the facility is in the public interest. In this respect, DPS Staff desires to adjudicate the extent to which the facility will contribute to serving load requirements in New York City, the amount and reliability of its dispatch, and its potential contribution to competition in the wholesale market. Among other things, DPS Staff seeks to address the Applicant's modeling and forecast assumptions.

Article X Ruling #4:The public interest issues are material and relevant and are tentatively advanced to adjudication. The issues may later be narrowed or removed if they are withdrawn, or if the Examiners determine that aspects of these issues advanced for adjudication are not material or relevant.

Article X Issue #5: Local laws

The fifth issue proposed by DPS Staff is whether the facility is designed to operate in compliance with applicable state and local laws, regulations issued thereunder, and opinions, policies and orders issued by the PSC. DPS Staff indicated there are questions about the applicability of certain New York City stack height and construction activity restrictions.

Article X Ruling #5:The applicability of state and local laws to the proposed facility raises legal, not factual issues, and is not advanced to adjudication. However, see the discussion of the related issues #7 and #8, below.

Article X Issue #6: Coastal zone policies

The sixth issue proposed by DPS Staff is whether the Siting Board can make a consistency determination for all Coastal Zone Policies.

Article X Ruling #6:This is material and relevant and this issue is tentatively advanced to adjudication. This issue may later be removed if it is withdrawn or if the Examiners determine that the aspects of this issue advanced for adjudication are not material or relevant.

Article X Issue #7: Permit issuance

The seventh issue proposed by DPS Staff is whether the record supports a finding by the Siting Board that authorization to local and state regulatory agencies to issue permits related to the construction or operation of the facility should or should not be granted, and, if so, on what terms. No factual questions are raised in this regard. New York City EDC, in its May 22 update, reports continuing negotiations with the Applicant, but reports it is aware of no issues requiring adjudication.

Article X Ruling #7:This issue raises legal rather than factual matters, and is not advanced to adjudication. This issue may later be added if it is later shown that factual aspects of this issue are material and relevant.

Article X Issue #8: Waiver of local ordinances or laws

The eighth issue proposed by DPS Staff is whether the record supports a finding by the Board that local ordinances, laws, resolutions, or regulations, or other local requirements with which the facility would not comply, are unreasonably restrictive, and that, therefore, compliance with them should be waived.

Article X Ruling #8:This is material and relevant and this issue is tentatively advanced to adjudication. This issue may later be removed if it is withdrawn or if the Examiners determine later that the aspects of this issue advanced for adjudication are not material or relevant.

Issue Proposed by DEC Staff

Article X Issue #9: The on-site oil storage facility

DEC Staff has proposed that issues involving the Applicant's application for a major onshore oil storage facility (MOSF) be adjudicated. Currently, the site of the proposed project is being used as a fuel oil storage and distribution terminal. The Applicant plans to refurbish two of the existing tanks and use them to store approximately 12.6 million gallons of backup low sulfur distillate fuel oil. To do this, the Applicant needs a permit from New York State, pursuant to Article 12 of the Navigation Law.

If this application were not pursuant to Article X of the PSL, DEC would issue the Article 12 permit. However, since the Article 12 permit is authorized solely by state law and no federal program has been delegated, the Board has the sole authority to issue the Article 12 permit. DEC, DPS, and the Applicant have been working to resolve this issue, however, to date, no resolution has been reached. No other party has commented on this issue.

Article X Ruling #9:This is material and relevant and this issue is tentatively advanced to adjudication. This issue may later be removed if it is withdrawn or if the Examiners determine that the aspects of this issue advanced for adjudication are not material or relevant. However, the details of the points of disagreement are unclear in the record thus far. Therefore, DEC Staff is directed to provide a more detailed statement of the sub-issues contained in this issue by June 1, 2001. Responses of other parties must be submitted by Friday, June 8, 2001.

Issues Proposed by Queens/CHOKE

Article X Issue #10: Air quality impact analyses

The first issue proposed by Queens/CHOKE involves thirteen sub-issues relating to the air quality impact analyses done by the Applicant and included in its Article X application. To the extent these issues relate to programs regulated by DEC under federal delegation, as discussed above, they cannot be addressed in the Article X hearing process. One issue raised by Queens/CHOKE is the Applicant's analysis of potential emissions of global warming gases (presumably CO2). This issue fails, however, as regulatory standards are not in effect for CO2, standards could not be promulgated here through this permitting process, and adjudication has not been shown to be relevant to potential certificate conditions (Application of Athens Generating Company, Case 97-F-1563, Recommended Decision, issued September 3, 1999, pp. 229-232).

Article X Ruling #10:These air quality issues are not adjudicable in the Article X proceeding because they are part of the DEC adjudicatory process, and in the case of global warming gases, they lack a basis for adjudication, relevance, and materiality.

ARTICLE X ISSUE #11: Errors in the MAPS computer modeling

The second issue proposed by Queens/CHOKE involves the Multi-Area Production Simulation (MAPS) computer analyses completed by the Applicant, the results of which are included in the application. Queens/CHOKE seeks to adjudicate the MAPS analysis to test the Applicant's claims that forecast operation of the facility would provide environmental benefits through the displacement of the other, more polluting generating facilities. Queens/CHOKE also seeks to litigate claims about the impact of the facility on the reliability of regional power supply; this latter issue has been included for adjudication (Article X Ruling #4, supra).

The remaining question is whether the asserted environmental effects of displacement should be adjudicated and considered by the Board. These secondary environmental effects are beyond the scope of the air pollution permitting issues addressed by DEC, and may be considered by the Board. Although the degree to which overall pollution reductions (beyond offsets required by DEC under the CAA for non-attainment areas) are a relevant factor for consideration, we are not yet persuaded that this issue will be material.

Article X Ruling # 11:Despite concerns we have about the potential materiality of adjudicating forecasts of the extent to which operation of the proposed facility may reduce air pollution emitted from other power plants, the issue is relevant and is tentatively advanced to litigation. The issue may later be removed if withdrawn, or if we later determine that aspects of the issue advanced for litigation are not material or relevant.

Article X Issue #12: No action alternative

The third issue proposed by Queens/CHOKE involves the allegation that the Applicant failed to address the "no action alternative" as required by regulation (16 NYCRR 1001.2(c)). This proposed issue fails because it misinterprets the definition of what the no action alternative is and assumes an incorrect analysis.

Article X is the functional equivalent of Article 8 of the Environmental Conservation Law, specifically the State Environmental Quality Review Act (SEQRA). SEQRA also requires consideration of the "no action alternative" (6 NYCRR 617.9(b)(5)(v)) and it is appropriate when interpreting the language of the Article X regulations in this matter to be guided by SEQRA regulations. Under SEQRA, consideration of the no action alternative for a private project sponsor (as is the case here) requires a discussion of alternative uses of the project site. No such discussion appears in the application. This is a deficiency, in this instance, possibly more of form than of substance.

Queens/CHOKE, however, does not allege there are alternative uses for the site that should be considered under the no action alternative. Rather, Queens/CHOKE seeks to address whether changes are likely at other generating facilities, wholly apart from whether this facility is constructed and operated, that would affect the air emissions coming from them. As Queens/CHOKE acknowledged at the issues conference (Tr. 575-576), this is an element of its analysis of the degree to which operation of the proposed facility may reduce emissions at other power plants. Queens/CHOKE has been permitted to adjudicate that issue (Article X Ruling # 10) despite concerns about its materiality (which we note are only magnified here), and this aspect of the issue may be addressed as well, with the same caveats.

Article X Ruling #12: We find that the Applicant's analysis of the no action alternative is lacking and direct the Applicant to supplement the application with an analysis of the no-action alternative, by Friday, June 1, 2001. Once this is provided, the other parties to the proceeding may provide comments by Friday, June 8, 2001. At this time, there is no adjudicable issue concerning the no action alternative. However, upon review of the comments from the parties, we may add this issue to the list of adjudicable issues.

Article X Issue #13: Noise and vibration

The fifth issue proposed by Queens/CHOKE involves questions about the Applicant's analysis of noise and vibration, the choice of noise mitigation features, and whether there are any additional strategies for minimizing any adverse noise and vibration impacts of the proposed facility. At the issues conference, Queens/CHOKE explained that it had recently received information on this topic from the applicant as a result of a discovery request and had not had an opportunity to review the information. Based upon its review of the information, this may not be an issue for Queens/CHOKE.

Article X Ruling #13:The noise impacts of the proposed plant are material and relevant and this issue is tentatively advanced to adjudication. This issue may later be removed if Queens/CHOKE withdraws the issue of if the Examiners determine that the aspects of this issue advanced for adjudication are not material or relevant.

Article X Issue #14: Neighboring community impacts

The sixth issue proposed by Queen/CHOKE involves the impacts the proposed project may have on the neighboring community. Contained within this issue are four distinct sub-issues. First, whether the neighboring communities' demographics support an environmental justice claim. Second, whether northwest Queens is already burdened with a disproportionate number of power plants. Third, whether the proposed plant will diminish neighborhood air quality if it replaces existing generation. And fourth, whether there is a potential for deteriorating air quality in the neighborhood as a result of existing plants and the proposed facility.

Regarding environmental justice, Queens/CHOKE seeks to adjudicate whether the proposed project's impact on air quality requires an additional environmental justice review. Since this is another attempt to review air quality issues related to the delegated air pollution control permit, this issue is inappropriate for review in the Article X hearing process. Even if Queens/CHOKE had made a stronger presentation regarding environmental justice in the DEC issues conference, this issue is related to a portion of the federal program. Thus, PSD issues such as environmental justice are not adjudicable. This issue was also raised in Application of Con Edison. In the issues ruling in that case,(5) the Examiners also determined that environmental justice was not an issue for adjudication.

Regarding the claim that northwest Queens is bearing a disproportionate share of power plants, the only characteristic of power plants identified for consideration in this connection is air emissions, and as discussed above, that is a matter for the DEC permitting process to resolve. (See the discussion of DEC Issue #6, supra.) The third and fourth sub-issues appear to be essentially the same question, namely, how air quality would be affected by the proposed facility. Again, the appropriate forum for these issues in the DEC permitting process.(6)

Article X Ruling #14: The proposed adjudication of neighboring community impacts, including environmental justice considerations, seeks to address air quality issues covered in the DEC permitting process. These are not adjudicable Article X issues.

Article X Issue #15: Cumulative impact

The seventh issue raised by Queens/CHOKE is the cumulative impact of the air emissions from the proposed facility. This is another way of proposing to adjudicate issues of air quality. As discussed previously, these issues of air quality and the proposed project's effect thereon are all controlled by the federally delegated permit. The DEC permitting process fully accounts for the effects of all existing emission sources, as well as the impact of the proposed facility. The appropriate venue to discuss air quality issues is the DEC issues conference, not the Article X issues conference.

Article X Ruling #15:The issue involving the cumulative impact of the proposed facility is not an issue for adjudication.

Issues raised by NYILR

NYILR appeared at the Article X issues conference, but did not submit a written summary of its issues before hand. This was due to the fact that NYILR was granted party status a few days prior to the issues conference. NYILR proposed issues relating to environmental justice, and, to the sufficiency of the pre-application.

Article X Issue #16: Environmental Justice

The first issue proposed by NYILR is environmental justice. NYILR defines this issue much more broadly than most other organizations. The widely accepted concept underlying environmental justice is that minority and low-income communities should not be disproportionately exposed to environmental hazards, and that these communities and their individual members should have a meaningful say in the decisions that affect their environmental exposure. NYILR expands this definition and seeks to examine the impacts of this proposed project on "everybody", not just certain groups or minorities. Whatever the import of NYILR's assertions regarding the alleged error in the definition of "environmental justice" may be, this does not rise to the level of a relevant and material issue. No environmental impact has been advanced, other than air quality, as a basis for considering disproportionate impacts.

Article X Ruling #16: The issue of environmental justice, as defined by NYILR, is not appropriate for adjudication.

Article X Issue #17: Sufficiency of the pre-application

The second issue proposed by NYILR regards the sufficiency of the pre-application. Specifically, NYILR asserts that there may be false testimony in the application contained within the affidavit of an engineer employed by Raytheon, a consultant to the Applicant. Because of these false statements, NYILR asserts that the decision of the Chairman of the Siting Board to declare the application complete was faulty and the application should be denied. NYILR raises this issue in this proceeding because it believes this is the appropriate forum for such an issue.

Article X Ruling #17: There is not enough information in the record to decide this issue. Therefore, NYILR is directed to provide additional information by Friday, June 1, 2001 on this issue. The additional information shall include: details on all alleged falsities contained within the pre-application, a showing that these alleged falsities are material and relevant to this matter as well as the statutory basis for our review. Responses will be due Friday, June 8, 2001. We remain skeptical that this issue is appropriate for adjudication, but, the charge made by NYILR is serious and we feel it ourduty to examine this issue, develop a record, and report to the Board.

Appeals of Article X Rulings

A ruling of the Presiding and Associate Examiners to include or exclude any issue for adjudication or a ruling on the merits of any legal issue made as part of an issues ruling may be appealed to the Secretary of the New York State Siting Board. Due to the complexity of these proceedings, we are allowing that any appeals of the Article X rulings above must be in writing and received by the Secretary of the NYS Siting Board, Three Empire State Plaza, Albany, New York, before 4:00 p.m. on June 1, 2001. Replies are authorized and must be received by the Siting Board before 4:00 p.m. on June 8, 2001. Appeals should address the Examiners' ruling directly rather than merely restate a party's contentions. Parties shall serve each other by the same dates as filing is required to the Siting Board. This appeals schedule does not modify the schedule set forth in the established hearing schedule dated March 12, 2001. Appeals and replies should be submitted to the Siting Board in triplicate - no faxes or e-mail submissions will be allowed or accepted.

/s/
J. Michael Harrison

/s/
P. Nicholas Garlick

1. See Table 2-8 of the Title V permit application and Appendix 4.1-2 of Volume 3 of the Article X Application.

2. See Appendix 4.1-2, pages 7-15-18.

3. Consolidated Edison, Issues Ruling, infra, pp. 31-37.

4. The Board may consider emission topics not covered by the federally delegated programs. The statute is clear that the Board retains jurisdiction over any environmental issues not arising under the federally delegated programs.

5. Case 99-F-1314, DEC Case #3-6206-0012/000021, Application of Consolidated Edison Company of New York, Inc., Issues Ruling and Procedural Ruling (issued March 15, 2001), pp. 31-37, 43.

6. With respect to the third issue, we ruled above (Article X Issues Rulings #10 and 11) that Queens/CHOKE may adjudicate the extent to which the proposed facility may be expected to produce environmental benefits by displacing the operation of other generating facilities.

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