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Athens Generating Company, LP - Ruling, April 26, 2000

Ruling, April 26, 2000

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of

an Application for a State Pollutant Discharge Elimination System (SPDES) permit
pursuant to Environmental Conservation Law (ECL) Article 17 and Title 6 of
the Official Compilation of Codes, Rules and Regulations of
the State of New York (6NYCRR) Parts 750 et seq.

- by -

Athens Generating Company, LP
111 Washington Avenue
Albany, New York 12208

APPLICANT

Ruling on Proposed Issues
for Adjudication and Petitions
for Party Status

DEC No.: 4-1922-00055/00001

SPDES No.: NY-0261009

April 26, 2000

Introduction

In August 1998, the Athens Generating Company, L.P. (the Applicant or AGC), applied for a Certificate of Environmental Compatibility and Public Need pursuant to Article X of the NYS Public Service Law (PSL)(1) to construct and operate a 1080 megawatt (MW) combined cycle electric generating facility. The Facility would consist of three Westinghouse 501 G (or equivalent) advanced combustion turbine generators (CTG), three heat recovery steam generators (HRSG), three steam turbine generators (STG) with associated balance-of-plant systems and facilities. The primary fuel would be natural gas. Low sulfur (0.05%) fuel oil would be used for back-up.

The Facility would be located in the Town of Athens, Greene County, on 250 acres. The Site is located two miles west of the Hudson River, and situated between County Route 74 (Leeds-Athens Road) on the south, US Route 9W on the west, County Route 28 (Schohaire Turnpike) on the north, and the Conrail railroad tracks on the east. An access road would be constructed from Route 9W.

Over the course of about 18 days, the transcript record of the related PSL Article X hearing totals over 6,000 pages, with 366 exhibits in evidence. A list of witnesses who presented sworn testimony at the Article X hearing is attached to the Recommended Decision as Appendix D. As of the date of this Issues Ruling, a final determination on the application filed pursuant to PSL Article X for a Certificate of Environmental Compatibility and Public Need is pending.

Proceedings

AGC's application for a PSL Article X certificate also included a request for a State Pollutant Discharge Elimination System (SPDES) permit. The proposed facility would withdraw process water from the Hudson River for cooling purposes. A portion of the cooling water would evaporate into the atmosphere. The balance of the process water would be returned to the river. The Staff from the NYS Department of Environmental Conservation (the DEC Staff) reviewed AGC's SPDES permit application, and subsequently developed a draft SPDES permit and two fact sheets.

An Announcement of Public Comment Period, and Combined Notice of Complete Application, Public Hearing and Issues Conference (the Announcement and Notice), dated January 19, 2000, appeared as a legal notice in The Daily Freeman, The Catskill Daily Mail, and The Register Star on January 24, 2000, and in the Department's Environmental Notice Bulletin on January 26, 2000. In addition, copies of the Announcement and Notice were sent to the parties to the related PSL Article X proceeding, as well as to the required governmental officials and to many individuals who had expressed an interest in the proposed facility.

The Announcement and Notice included descriptions of the proposed electric generating facility, in generally, and the nature of the point sources for the anticipated waste water discharges, in particular. In addition, the Announcement and Notice provided for a 30 day comment period, and the schedule for legislative hearing sessions and an Issues Conference.

The legislative hearing sessions were held on February 28, 2000 at 3:00 p.m. and 7:00 p.m. at the Catskill High School, West Main Street, Catskill, NY. Between 150 to 200 people attended the legislative hearing sessions where a total of 76 people presented oral statements, and as many filed written statements. Numerous written comments were also filed by mail.

Most of those who spoke or submitted written comments oppose the proposed facility, and demand that the Commissioner deny the requested SPDES permit. Those who spoke or wrote in opposition were critical about many aspects of the proposal including: (1) the lack of an environmental impact statement, (2) the Department's determination that the proposed discharges would not degrade the water quality of the Hudson River, and (3) PG&E's compliance history. The Athens Generating Company, LP, is an affiliate of the PG&E Corporation. Some voiced their support for the proposal because it would provide jobs, reduce the cost of electricity, and make significant payments in lieu of taxes to the local governments and school districts.

On February 29, 2000, I convened an Issues Conference at 11:00 a.m. at the Catskill Town Hall to consider requests for party status and proposed issues for adjudication. With a cover letter dated February 25, 2000, Scenic Hudson filed a petition in which it proposed nine issues for adjudication and requested full party status. John W. Caffry, Esq., from Glens Falls, NY, appeared on behalf of Scenic Hudson.

In a joint petition dated February 24, 2000, Riverkeeper, Inc., Everett Nack, Robert H. Boyle, and a local community-based group called Stand Together Oppose Power Plants (STOPP) proposed issues for adjudication and requested full party status. Karl Coplan, Esq. and Danielle Abate, Legal Intern from the Pace Environmental Litigation Clinic, Inc., Pace University School of Law, and David Gordon, Esq., Senior Attorney for Riverkeeper, Inc., appeared on behalf of Riverkeeper, Messrs. Nack and Boyle, and STOPP (Riverkeeper).

The other Issues Conference participants were the DEC Staff and the Applicant. The DEC Staff were represented by Lisa A. Wilkinson, Esq, Meghan A. Purvee, Esq. and William G. Little, Esq. Richard Cogen, Esq. and Sheri Littlefield Moreno, Esq. from Nixon Peabody, LLP, Albany, NY, appeared for the Athens Generating Company, LP.

The stenographic record of the legislative hearing and the Issues Conference was received on March 15, 2000. The Issues Conference participants had opportunities to file additional arguments in writing. All submissions were timely filed by April 14, 2000, whereupon the record of the Issues Conference closed.

Ruling on Requests for Party Status

As provided by 6 NYCRR §624.5, the parties to any adjudicatory hearing are the Applicant, the Department Staff and those who have been granted full party status. As explained above, Riverkeeper and Scenic Hudson filed petitions for full party status.

The criteria for determining whether the ALJ should grant petitions for full party status are provided in §624.5(d)(1). Upon review of these criteria and the petitions for full party status, I find that Riverkeeper and Scenic Hudson filed acceptable petitions as required by 624.5(b)(1) and (2). As discussed below, Riverkeeper and Scenic Hudson have raised a substantive and significant issue for adjudication concerning the requirements outlined in §316(b) of the federal Clean Water Act and 6 NYCRR §704.5 for the implementation of the best technology available for minimizing adverse environmental impacts from the proposed cooling water intake structures.(2) In addition, Riverkeeper and Scenic Hudson have shown an adequate environmental interest.(3)

Therefore, I grant Riverkeeper's and Scenic Hudson's respective requests for full party status. However, for the reasons explained below, the record concerning the best technology available for minimizing adverse environmental impacts is complete, thus rendering further adjudication on this matter unnecessary.

Proposed Issues for Adjudication

  1. Summary of Proposed Issues

    Scenic Hudson initially proposed nine issues for adjudication. As its first and second issues, Scenic Hudson contends that AGC's SPDES application is incomplete because it does not include plans and specifications for: (1) the Gunderboom, and (2) all of the proposed outfalls. Third, like Riverkeeper, Scenic Hudson also asserts that the proposed hybrid cooling system plus a Gunderboom does not reflect BTA, and therefore violates 33 USC §1326(b) and 6 NYCRR §704.5.

    As its fourth proposed issue, Scenic Hudson alleges that AGC has not demonstrated that the expected thermal discharges from the proposed facility would meet the applicable regulations. By letter dated March 6, 2000, however, Scenic Hudson withdrew this proposed issue after its consultants reviewed the discussion and data presented in AGC's Initial Response.

    Fifth, Scenic Hudson objects to the proposed draft SPDES because it does not impose monitoring requirements, action levels for certain regulated pollutants, and a condition to reopen the SPDES permit. Sixth, Scenic Hudson contends that the proposed sanitary waste discharge would not comply with the Department's design standards. Seventh, Scenic Hudson asserts that AGC does not meet the requirements for general SPDES permits regulating storm water discharges. Eighth, Scenic Hudson contends that the DEC Staff's review of the pending SPDES permit application has not been consistent with the state's antidegradation policy. Ninth, Scenic Hudson asserts that a cumulative impact assessment of similarly proposed facilities is necessary, before a final determination about this SPDES permit can be made. Subsequently, in a motion dated April 5, 2000, Scenic Hudson moved to include the Applicant's record of compliance as an issue for adjudication.

    Riverkeeper proposes four issues for adjudication. The first issue is that the draft SPDES permit does not require the best technology available (BTA), as required by 33 USC §1326(b) [CWA §316(b)] or 6 NYCRR §704.5, to minimize the potential adverse environmental impacts related to the withdrawal of process water from the Hudson River. Riverkeeper's second issue is that the proposed location of the cooling water intake structures and Outfall 001 pose a substantial threat to significant aquatic habitats. Third, Riverkeeper alleges the DEC Staff's review of the pending SPDES permit application has not been consistent with the state's antidegradation policy. In an undated letter received by fax on April 5, 2000, Riverkeeper joined in Scenic Hudson's motion to include the Applicant's record of compliance as an issue for adjudication.

  2. Standard for Determining Issues

    Section 624.4(c) outlines the standards for adjudicable issues. When, as here, the Department Staff has determined that a proposal, as conditioned by the draft permit, will conform to all applicable statutory and regulatory requirements, the burden of persuasion is on the prospective party advancing the issue to show that the proposed issue is both substantive and significant.(4)

    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. Todetermine whether an issue is substantive, the ALJ 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 and amicus status, the record of the Issues Conference and any subsequent written arguments authorized by the ALJ.(5) To be substantive, the issue cannot be based merely on speculation but on facts that can be subjected to adjudication. (6) In addition, an issue can be demonstrated by identifying a substantive defect or omission in the application materials.(7)

    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.(8)

    At the Issues Conference and in its Initial Response, dated February 29, 2000, AGC argued that Matter of Jay Giardina, Interim Decision, September 21, 1990 and Matter of Akzo Nobel Salt, Inc., et al., Interim Decision, January 31, 1996 further refine the standards for determining issues for adjudication.

    According to Giardina, offers of expert testimony contrary to the application are not necessarily adequate, in and of themselves, to raise issues for adjudication, especially when the bases for the contrary expert opinions are not identified or have not considered all proposed mitigations. Akzo further emphasizes that the purpose of the adjudicatory hearing is to resolve disputed facts with evidence. Debates among experts about the quantity and quality of information appropriate to make judgments should be avoided when there is sufficient information already available to design a proposal, and to develop permit conditions that both protect the environment and provide opportunities for any necessary corrective action. The applicability of these administrative decisions to the proposed issues is discussed below.

  3. ECL Article 70 (Uniform Procedures Act), and PSL Article X

    In 1975, the US Environmental Protection Agency (US EPA) approved the Department's SPDES permit program, which must be consistent with the federal Clean Water Act and its regulations, as well as a variety of state statutes and regulations. ECL Article 17, Title 8 provides the statutory framework for the state's SPDES program. ECL Article 70 (Uniform Procedures Act) and implementing regulations,(9) outline the procedures that the Department Staff must use to review permit applications, including SPDES permit applications, in order to decide whether to issue the requested permits. The Uniform Procedures Act also provide for public hearings.(10)

    In correspondence to the US EPA Region 2 Administrator dating from December 1997, the General Counsels from the Departments of Environmental Conservation and Public Service sought approval that would authorize the NYS Board on Electric Generation Siting and the Environment (the Siting Board) to review and issue the environmental permits required by the federal Clean Air Act (CAA), the federal Clean Water Act (CWA), and the federal Resource, Conservation and Recovery Act (RCRA) as part of the Board's approval for new major electric generating facilities. By letter dated February 11, 1999, EPA Region 2 Administrator Fox cautioned that without EPA authorization, the Siting Board's approval, in lieu of a SPDES permit from DEC, would not represent a permitting action under an authorized National Pollutant Discharge Elimination System (NPDES) program.

    In November 1999, NYS Governor Pataki signed legislation that amended PSL Article X and sections of ECL Article 17. These amendments, among other things, clarify the Department's authority to issue SPDES permits for new electric generating facilities.(11)

    In a letter dated November 10, 1999, Administrator Fox acknowledged that these amendments removed the legal impediments from state statutes that had previously prevented the Department from issuing SPDES permits for major electric generating facilities. Administrator Fox, however, requested clarification about how the Department would review SPDES permit applications.

    DEC Commissioner Cahill responded in a letter dated February 25, 2000. The Commissioner explained that adherence to the uniform procedures outlined in ECL Article 70 is fully consistent with the mandates of both PSL Article X, and the Department's SPDES authorization from EPA. The Commissioner explained further that the Department would primarily rely on the uniform procedures,(12) and would use the procedures outlined in PSL Article X only when those procedures are consistent with the procedural requirements of the Department's federally delegated SPDES program.(13)

    In a letter dated February 11, 2000, AGC asserts that substantive and significant issues may be adjudicated in the captioned proceeding only if those issues have not been raised, or could not have been raised, in the related PSL Article X proceedings. Citing 6 NYCRR §753.6(b), AGC argues that a hearing must be held only if there is a reason to hold such a hearing. According to AGC, there would be no reason to hold any further hearings on matters already considered in the related PSL Article X proceeding because the record of that proceeding has been incorporated into the subject proceeding.

    AGC argues further that the recent amendments to PSL Article X(14) require the DEC Commissioner to base decisions about whether to issue SPDES permits on the PSL Article X hearing record and the associate examiner's conclusions and recommendations. The DEC appoints an associate examiner to attend the PSL Article X proceedings and to assist the presiding examiner in developing a complete record.(15) AGC contends that this requirement from the Public Service Law and the requirement at 6 NYCRR §753.6(b) can be best harmonized by prohibiting issues that were, or that could have been, raised in the related PSL Article X proceeding from being re-litigated in the captioned proceeding. Finally, AGC asserts that the conservation of administrative resources would require the same result.

    DEC Staff respond in a letter dated February 22, 2000. Citing the administrative decisions and the regulations identified in the preceding section, DEC Staff argue that the substantive and significant test is the only appropriate standard for determining whether there are any issues for adjudication, and that any substantive and significant issue must be considered. DEC Staff argue further that an adjudicatory hearing should not be held to accumulate more information on subjects already studied in depth. DEC Staff agree with AGC that administrative resources should be conserved, and that the Issues Conference is a means to that end.

    In their respective petitions for full party status, Riverkeeper(16) and Scenic Hudson(17) respond to AGC's arguments. Riverkeeper contends that the Department may not rely on the related PSL Article X hearing record to issue a SPDES permit for the proposed power plant because the US EPA has expressly prohibited the Department from doing so. Riverkeeper points out that the recent amendment to PSL §167(1) requires the DEC Commissioner's determinations to be consistent with federally delegated or approved environmental permitting authority. Since EPA has not authorized any new procedures, Riverkeeper argues that the current procedures outlined in ECL Article 70, and implementing regulations, 6 NYCRR Parts 621 and 624 must be followed here.

    Riverkeeper acknowledges that 6 NYCRR §621.3(e) provides for joint hearings, but asserts that agreements to hold joint hearings must be in effect before the proceedings commence, and that presently no agreement exists between the DEC and DPS to hold joint PSL Article X and ECL Article 70 hearings. Consequently, Riverkeeper concludes that DEC's current permit review procedures must be followed here.(18)

    Scenic Hudson objects to AGC's arguments, and concurs with DEC Staff's position. According to Scenic Hudson, it does not want to repeat testimony that has already been given, but argues that it is not barred from raising issues at the Issues Conference concerning the captioned matter that were, or might, have been raised before. Scenic Hudson contends that AGC's arguments are contrary to EPA's determinations about how SPDES permit applications should be reviewed in New York. Scenic Hudson argues that the Department is not bound by what has occurred to date in the related PSL Article X hearing, and that the Department must make its own determination independent of any findings that the Siting Board may make.(19)

    Discussion and ruling: The Announcement and Notice stated that an adjudicatory hearing would be held only if proposed issues were substantive and significant.(20) The Announcement and Notice stated further that the evidentiary record from the related PSL Article X hearing would be incorporated by reference into the record of the captioned proceeding.(21)

    Although joint hearings between agencies are possible,(22) and could be used in future PSL Article X projects that also require federally delegated permits from DEC, the agreement required by 6 NYCRR §621.3(e) for a joint proceeding does not exist here. Moreover, no notice of joint hearings has been provided with respect to the captioned SPDES permit application and the related PSL Article X certificate application. Consequently, a separate proceeding addressing AGC's SPDES permit application is required with strict adherence to the established DEC procedures for permit review.

    As a result, the substantive and significant standard outlined in 6 NYCRR §624.4(c), will be applied to the intervening parties' proposed issues regardless of whether the proposed issues were, or could have been, considered in the related PSL Article X proceeding. As in any DEC permit hearing, if a proposed issue is not substantive and significant, then an adjudicatory hearing is not necessary.

    Given the unique circumstances associated with this case, if a proposed issue is substantive and significant, then the interveners have agreed to rely, as much as possible, on the record developed in the related PSL Article X hearing. The interveners assert, however, that additional testimony, arguments, or both may be necessary to develop a complete record for the Commissioner's consideration before making a final determination about the captioned SPDES permit application.(23)

    Based on this agreement, the question of whether the evidence from the related PSL Article X hearing provides a sufficient record for evaluating proposed issues will need to be considered. If it is determined that the record is compete, then it will be possible to dispose of the previously determined substantive and significant issue.(24) If the information from the related PSL Article X proceeding is incomplete for decision making purposes here, then it will be necessary to supplement this record further with additional evidence, argument, or both.

  4. Rulings on Proposed Issues
    1. Scenic Hudson's Proposed Issues 1 and 2: Missing Plans and Engineering Reports

      Scenic Hudson asserts that the captioned SPDES permit application is incomplete because AGC has not provided any plans for the Gunderboom, or adequate information about Outfalls 002, 003, and 004, as required by 6 NYCRR §§752.1(d) and (e).(25) Sanitary wastes from the proposed facility would be discharged to ground water at Outfall 002. Outfalls 003 and 004 are reserved for storm water discharges.

      Scenic Hudson argues that the Department's review of the application and this proceeding must be suspended until the required information is provided, and the public has had an opportunity to review and comment about the missing materials. Whether the draft SPDES permit requires detailed designs to be submitted in the future does not cure the defect in the application, according to Scenic Hudson.(26)

      With a cover letter dated March 3, 2000, AGC filed a document entitled, Implementation of Gunderboom at Athens Generating Project. The document describes some of the features of the Gunderboom, and includes conceptual drawings. AGC's March 3, 2000 filing does not include any additional information related to Outfalls 002, 003, and 004.

      Scenic Hudson's engineering consultant and proposed witness, Bruce Bell, Ph.D., P.E., Diplomat, American Academy of Environmental Engineers, reviewed AGC's conceptual design for the Gunderboom, and attached a copy of the analysis to Scenic Hudson's reply petition, dated March 9, 2000, as Attachment A. According to Scenic Hudson, AGC's submission does not satisfy the usual DEC requirements for detailed engineering drawings to be filed with other SPDES permit applications. In addition, Scenic Hudson argues that AGC's submission appears to raise more questions about how the Gunderboom would work, and how it may need to be modified if a complete seal cannot be achieved. Scenic Hudson argues that these questions were not addresses during the related PSL Article X hearings held in January 2000. Scenic Hudson contends that, absent more detailed information about the Gunderboom design, the Department cannot determine whether the hybrid cooling system with a Gunderboom would be the best technology available.(27)

      AGC contends that Scenic Hudson's proposed issues related to missing plans and engineering reports are not substantive and significant issues for adjudication. First, AGC states that its SPDES permit has been determined to be complete, and refers to the Announcement and Notice to support its argument. Second, AGC argues that the completeness of an application cannot be an adjudicable issue, citing 6 NYCRR §624.4(c)(7).(28)

      Citing testimony from the PLS Article X hearing record, the DEC Staff explain how adequate information about the Gunderboom is already available, and argue that this information provides a sufficient basis on which to determine its effectiveness. The Staff also state that AGC's March 3, 2000 submission further supplements the already complete record. With respect to the other outfalls, DEC Staff contend that AGC provided the additional information that would typically appear on the Department's SPDES application forms at Sections 2 and 4, and Appendix D of the PSL Article X application materials. Finally, the DEC Staff state that the draft permit requires detailed designs to be submitted, and that 6 NYCRR §754.3 authorizes the use of compliance schedules for this purpose.(29)

      Discussion and Ruling: As a matter of law, the Announcement and Combined Notice establish that the captioned SPDES permit application is complete pursuant to UPA.(30) Furthermore, pursuant to §624.4(c)(7), the completeness of an application cannot be an issue for adjudication.

      The question is whether there is sufficient information on which to base any necessary findings or determinations required by law. If there is not, then the ALJ has the authority to require AGC to provide additional information.(31)

      The DEC Staff must consider this question every time an application is filed with the Department. According to the DEC Staff, there is sufficient information about the Gunderboom and about Outfalls 002, 003, and 004 on which to make the required findings and decisions.(32) Moreover, the Staff contend that §754.3 authorizes AGC to file detailed plans, specifications and an engineer's report after permit issuance.(33) I agree and find that additional information from the Applicant is not necessary now. These proposed issues are denied.

    2. Scenic Hudson's Proposed Issue 5 - Monitoring, Action Levels, Reopener

      An action level is a numerical reporting level, accompanied by monitoring requirements; it is not an effluent limit. Rather, it is a triggering mechanism which, if exceeded, would require a permittee to undertake a more intensive monitoring program. If high levels are confirmed through monitoring, then the SPDES permit is reopened, and the Department must consider whether to modify the permit by increasing the action level or by imposing an effluent limitation.(34)

      Scenic Hudson asserts that the draft SPDES permit is defective because it does not require water quality monitoring to determine whether action levels of certain potential pollutants should be imposed, which would then provide a basis for reopening the permit to require additional controls or new effluent limitations. Scenic Hudson contends further that the draft SPDES permit is defective because it does not specify where the monitoring for the action levels should occur, for example, at the end of the outfall, or at some point within the mixing zone.(35)

      According to Scenic Hudson, these defects violate the requirement outlined in 40 CFR §122.44(d) and the parallel state requirement, and therefore constitute a substantive and significant issue for adjudication. Scenic Hudson offers Dr. Bell who would testify that the draft SPDES permit does not comply with the requirements outlined at 40 CFR §122.44(d).(36)

      According to DEC Staff,(37) the Department has discretion in deciding whether to impose action levels. With respect to the draft SPDES permit, the Staff state that it does require monitoring for certain pollutants, and provides a reopener. In support, the Staff identified Additional Requirement No. 18,(38) which outlines the requirements for a short-term high-intensity monitoring program for several potential pollutants,(39) including PCBs.(40) DEC Staff also state that Additional Requirement No. 18(f) allows the permit to be reopened to allow the Department to impose action levels, or to set effluent limitations, if necessary based on the results from the required monitoring.

      In addition to the conditions identified by DEC Staff, AGC argues that two other conditions in the draft SPDES permit squarely address Scenic Hudson's concerns. The first is Additional Requirement No. 6, which prohibits discharges from the proposed facility that would cause or contribute to any violation of the state's water quality standards. The second is a reference to the Part II, General Conditions. The text of this General Condition is presented in AGC's Initial Response;(41) however, the Part II, General Conditions to the SPDES Permit are not attached to the draft permit identified in the record as Exhibit 2C.

      Discussion and ruling: There is no issue for adjudication concerning monitoring, action levels, and reopening the permit. Presently, conditions in the draft SPDES permit already require a short-term high-intensity monitoring program for the parameters identified in Scenic Hudson's petition for party status. The purpose of the monitoring program is to determine the actual concentrations of the identified parameters of concern. If the results show that one or more of these parameters may cause a violation of water quality standards, then Condition 18(f) of the draft SPDES permit would allow the Department to modify the permit to include either an action level or an effluent limitation. These conditions, which are consistent with the guidance provided in Division of Water Technical Operational and Guidance Series (TOGS) 1.2.1, Industrial SPDES Permit Drafting for Surface Waters (May 19, 1987), fully address the concerns expressed by Scenic Hudson.(42)

      With respect to Scenic Hudson's objection about the monitoring location, AGC proposes to incorporate what had previously been stated in Part II, General Condition G(2) [Monitoring Locations] from the initial draft SPDES permit identified in the related PSL Article X record as Exhibit 288.(43) Although excluded from the revised draft SPDES permit, DEC Staff agrees to impose this condition.(44) The full text of the draft permit condition from Exhibit 288 [Part II-General Provisions G(2)] is:

      Monitoring Locations

      1. The permittee shall take samples and measurements to meet the monitoring requirements at the locations specified.
      2. Unless otherwise specified, samples and measurements of the plant influent shall be taken from the pump bay at a point where it will not be influenced by recirculation.
      3. Unless, otherwise specified, samples and measurements of the plant effluent shall be taken at discharge from the Wastewater Treatment Facility.
      4. Unless otherwise specified, samples and measurements of effluents from the waste treatment facilities identified in Part I of this permit shall be taken prior to their mixture with the cooling tower blowdown discharge.

      In its reply petition(45) and by letters dated March 13, 2000 and April 17, 2000, Scenic Hudson states that incorporating Condition II(G)(2) from Exhibit 288 into the revised draft SPDES permit would satisfy its concerns about monitoring as long as the condition is modified further to relate to Outfall 001.

      Conditions II(G)(2)(c and d), as presented above, relate to collecting samples and taking measurements of the effluent from the proposed facility.(46) I direct that this condition shall be incorporated into the revised draft SPDES permit. Portions "c" and "d" of Condition II(G)(2) shall apply to Outfall 001, and shall be modified accordingly. Therefore, with respect to monitoring locations, there is no issue for adjudication with the addition of this permit condition.

    3. Scenic Hudson's Proposed Issue 6 - Sanitary Waste Discharge (Outfall 002)

      Because AGC has not provided plans and specifications for its on-site sanitary waste water system, Scenic Hudson asserts that the Applicant has not met the requirements set forth in the Department's 1988 SPDES Design Standards for Wastewater Treatment Works(47). According to the draft SPDES permit, sanitary wastes from the proposed facility would be discharged to groundwater at Outfall 002. Scenic Hudson objects to granting a permit based on plans that will be submitted in the future.(48)

      Scenic Hudson contends this issue is substantive and significant because the intended site of the septic system would be in bedrock. According to Scenic Hudson's proposed witness, James Roberts, P.E., locating a septic system in bedrock would not comply with the referenced design standards. In addition, Mr. Roberts would testify that no other location on the site of the proposed facility would be acceptable for the septic system. In its reply petition, Scenic Hudson attached Mr. Roberts' comments concerning the poor quality of the soils on the site and the improbability of constructing an alternative treatment works that would be consistent with the 1988 design standards.(49)

      AGC contends that Scenic Hudson's proposed issue regarding the septic system is not substantive and significant. AGC states that it agreed in the related PSL Article X proceeding to comply with the 1988 design standards, and is willing to incorporate the proposed PSL Article X certificate condition into the draft SPDES permit. Also, AGC points out that several acceptable alternatives are presented in the 1988 design standards that can be implemented depending on the site conditions.(50)

      DEC Staff state that the Department issued over 600 renewal or modified SPDES permits last year that required those permittees to construct treatment works consistent with the 1988 design standards. Based on the PSL Article X application materials, the DEC Staff assert that the soils at the location of the proposed facility would support the construction of a septic system. DEC Staff note that the final design must be certified by a professional engineer licensed in NY. Given this requirement and that the design standards for sanitary treatment works are well established, the Staff also argue that AGC should be allowed to submit final plans and specifications for its septic system as part of the PSL Article X compliance filing.(51)

      Discussion and ruling: General Condition (Part II), Section 9 of the draft SPDES permit requires AGC to design its septic system in a manner consistent with the Department's 1988 design standards. This permit condition will not change regardless of whether AGC submits plans now, or whether the design is developed during an adjudicatory hearing. Consequently, the proposed issue is not significant because the adjudication of the proposed issue could not result in the imposition or modification of a significant permit condition in addition to the one already proposed in the draft SPDES permit. Therefore, Scenic Hudson's proposed issue related to AGC's septic system is not an issue for adjudication.

    4. Scenic Hudson's Proposed Issue 7 - General SPDES Permits for Storm Water Management

      According to Scenic Hudson's proposed witness, Mr. Roberts,(52) AGC's drainage analysis of the site is in error, and consequently, the best management practices (BMP) that AGC intends to use to control storm water runoff from the site would not be effective. Mr. Roberts asserts that storm water discharges would significantly alter the hydrology of state regulated Freshwater Wetland HN-108, which could result in a net loss of that wetland and severely impact the hydrology of its tributaries. Alternatively, pollutants could accumulate in the storm water basins and eventually contaminate the Sleepy Hollow Reservoir watershed. Based on this offer of proof, Scenic Hudson asserts there is a substantive and significant issue about whether AGC would meet the conditions of the Department's general SPDES permits for storm water discharges.(53)

      There are two general SPDES permits for storm water discharges. One relates to storm water discharges associated with construction activities.(54) The second relates to storm water discharges associated with industrial activities.(55)

      AGC responds to Scenic Hudson's assertions by stating that the general SPDES permits for storm water discharges are not at issue. AGC intends to file a Notice of Intent to obtain the general permit for construction activities to control storm water discharges from the site while it builds the proposed facility. After the facility is built and the general storm water SPDES permit related to construction activities no longer applies, AGC would not attempt to obtain the general storm water SPDES permit associated with industrial activities because the currently proposed conditions in the draft SPDES permit would regulate storm water discharges thereafter.(56)

      The Applicant contends further that Additional Requirement No. 13 of the draft SPDES permit requires AGC to prepare storm water management plans consistent with Appendix D to General Permit GP-93-06. AGC argues that this proposed condition addresses Scenic Hudson's concerns and therefore precludes the adjudication of this issue.(57)

      The Staff assert that AGC's storm water management plans would be reviewed and approved before construction commences. In addition, the DEC Staff contend that Scenic Hudson is inappropriately attempting to expand the regulatory scope of the general SPDES permits for storm water discharges. Although Scenic Hudson asserts that both the quality and the quantity of storm water runoff that reaches surface waters during and after development can not be altered from pre-development conditions, the Staff contend that only the quantity of the storm water runoff may be regulated pursuant to the terms of general SPDES permit and those conditions of the draft SPDES permit that pertain to storm water discharges after construction.(58)

      Discussion and Ruling: Based on Scenic Hudson's proposed offer of proof, the alleged issue is not whether AGC would comply with the terms and conditions of the general SPDES permit for storm water discharges related to construction activities, but whether AGC's drainage analysis is correct. Scenic Hudson's expert claims the drainage analysis is not correct, and concludes there could be substantial adverse impacts to the adjacent state-regulated wetlands, which are located in the Sleepy Hollow Reservoir watershed.

      Although Scenic Hudson asserts that its expert has conducted a thorough analysis of the existing information, which includes the application of the P8 computer program, I do not agree. After reviewing the reports(59), I find them to be conclusory and generally lacking in the grounds upon which the assertions were made.(60) The reports do not describe the P8 computer program, how it is applicable here, what input information was used, and most significantly, what the actual results of the computer model were. The exclusion of the results from the computer analysis, particularly after a claim that such an analysis was performed, is conspicuous. Therefore, I conclude that this offer of proof is insufficient to raise a substantive and significant issue for adjudication.

      In addition, DEC Staff's interpretation of the regulatory scope for storm water discharges is credible because the Staff developed the EPA approved general SPDES permits, and is charged with implementing this regulatory program. DEC Staff does not support Scenic Hudson's broad reading of the requirements and guidelines that must be applied here. I concur with the Staff. For the foregoing reasons, I conclude that the proposed issue is not substantive and significant.

    5. Riverkeeper's Proposed Issues 1 and 2 - Best Technology Available (BTA) and the Location of the Cooling Water Intake Structure; Scenic Hudson's Proposed Issue 3 - BTA

      As part of the related PSL Article X proceeding, the Applicant analyzed the probable impacts of the proposed facility on aquatic resources, including impacts on aquatic vegetation, benthic organisms (bottom dwelling) and fisheries resources at every life stage of development. It is uncontroverted that the treated waste water that would be discharged from the proposed facility would not adversely affect any of the previously mentioned aquatic resources. However, issues were raised in the related PSL Article X hearing, that have been reasserted here, concerning the potential impacts on fisheries resources by withdrawing process water from the Hudson River.

      According to Riverkeeper, the proposed location of the cooling water intake structures and Outfall 001 would adversely impact aquatic habitats. Riverkeeper asserts that the cooling water intake structures and the outfall would be located near two NYS Department of State (DOS) designated "significant habitat areas." The Vosburgh Swamp/Middle Ground Flats significant habitat area is located about 2 miles upriver from the proposed location of the cooling water intake structures, and the Rogers Island significant habitat area is located about .5 miles down river.(61)

      As provided by §316(b) of the federal Clean Water Act, and 6 NYCRR §704.5, the location of cooling water intake structures is one of several factors that must be considered when identifying the best technology available (BTA) for minimizing adverse environmental impacts. Therefore, Riverkeeper's proposed issue concerning the location of the cooling water intake structures and outfall will be considered here.

      In addition, Riverkeeper and Scenic Hudson assert that the draft SPDES permit does not comply with 33 USC §1326(b) or 6 NYCRR §704.5 because it does not require the best technology available to minimize adverse environmental impacts.(62) Although the recommended decision in the related PSL Article X proceeding found that a hybrid cooling system would be the best technology available, Scenic Hudson argues that the Department must now make its own independent decision on this issue given EPA's determination that the Siting Board lacks authority to issue a SPDES permit for the proposed facility.

      Scenic Hudson alleges further that the record from the related PSL Article X hearing concerning these issues is incomplete, and argues that the record of this proceeding must be supplemented. In particular, Scenic Hudson offers a report entitled, Lovett Generating Station, Gunderboom Evaluation Program 1999, dated February 2000,(63) which describes the design and deployment of the Gunderboom at the Lovett Generating Station in 1997 and 1998. Since the 1999 Gunderboom Evaluation Report was released in February 2000, Scenic Hudson argues that it was not available when the related PSL Article X remand hearings convened in January 2000, and should be considered now.(64)

      Referring to 6 NYCRR §753.6(b) and §624.4(c)(2), AGC argues there is no reason to hold any further adjudicatory hearings about what constitutes BTA because the proposed issues were thoroughly addressed in the related PSL Article X hearing,(65) the record of which has been incorporated into the record of this proceeding. According to AGC, the interveners have not offered any additional relevant information. Based on its review of the contents of the 1999 Gunderboom Evaluation Report, AGC asserts that most of the information in the report is not material to the captioned proceeding.(66)

      Attachment 3 to the 1999 Gunderboom Evaluation Report is the final report concerning the impingement studies, which are discussed further below. A draft report about the impingement studies was received into evidence in the related PSL Article X hearing, and is identified in that record as Exhibit 363. According to AGC, its expert, Dr. Englert, has reviewed the final report. AGC asserts that nothing in the final report leads Dr. Englert to reconsider or revise the testimony he provided in the related PSL Article X hearing, which was based on the information contained in the draft report concerning the impingement studies.(67)

      For similar reasons, the DEC Staff also assert that the proposed BTA issues do not need to be adjudicated here. The Staff explain that DEC witness, Edward Radle,(68) reviewed the final report on the impingement studies in the 1999 Gunderboom Evaluation Report. In an affidavit attached to the Staff's reply, Mr. Radle states that nothing in the final report leads him to reconsider or revise the testimony presented in the related PSL Article X hearing.(69)

      Discussion and rulings: Potential impacts associated with the location, design, and capacity of the proposed cooling water intake structures on fisheries resources is a substantive and significant issue.(70) Additional adjudicatory hearings, however, are not necessary. The related PSL Article X hearing provided the parties, which included the interveners to the captioned matter, with considerable opportunities to develop a factual record about what would be the best technology available for the proposed facility that would minimize adverse environmental impacts as required by CWA §316(b) and 6 NYCRR §704.5. The PSL Article X parties also had six opportunities during the related PSL Article X proceeding to present arguments about the BTA issue.(71) The interveners assert the same issue here, and make the same offers of proof except for the 1999 Gunderboom Evaluation Report.

      The following discussion addresses the potential impacts associated with the location, design, and capacity of the proposed cooling water intake structures on fisheries resources. The discussion begins with a brief description of the river setting, the cooling water intake structures, and Outfall 001. The second part of the discussion states the applicable law, and provides an outline for determining compliance with CWA §316(b) and 6 NYCRR §704.5. The outline is based on guidance documents, EPA administrative decisions, and case law. Using the outline, the third part of the discussion considers whether the location, design and capacity of the proposed cooling water intake structures would minimize adverse environmental impacts as required by CWA §316(b) and 6NYCRR §704.5. The discussion and the rulings that follow are based on the relevant portions of the PSL Article X record, as well as all previous arguments presented in the parties' briefs listed in footnote 71.

    6. River Setting, and Description of the Cooling Water Intake Structures and Outfall 001

      The following facts are not in dispute. The proposed electric generating facility would be located about two miles west of the Hudson River. To transport process water from the river to the generating facility, AGC would build an intake/discharge facility, or pumphouse, on the west shore of the Hudson River at about river mile 115.5.(72) Process water withdrawn from the Hudson River would then be pumped from the pumphouse to the proposed energy facility through a single 18-inch diameter pipe.(73)

      The site selected for the pumphouse is approximately 36.5 miles south of the Troy Dam, about 39.5 miles upriver from the Hudson River estuarine salt wedge, under average flow, and about one mile north of the Rip Van Winkle Bridge. The approximate width of the river at the site of the pumphouse is 3450 feet, and the depth of the river ranges from a few feet in the shallow flats along the western shoreline to about 32 feet below mean low water in the federal navigation channel.

      The majority of the water taken from the Hudson River would be used for cooling purposes. The average water demand for the proposed energy facility would be about 4.2 million gallons of water per day (mgd), under typical gas-fired operations. The maximum water demand would be 7.5 mgd.(74) Water would be withdrawn at an input velocity of 0.5 feet per second (fps), which is about 1,500 millimeters (mm) per second.

      The process water would be withdrawn from the Hudson River via two screened cooling water intake pipes extending 580 feet from the western shoreline and located about 24 feet below the mean low water mark, just landward of the federal navigation channel. The heads of the intake pipes would be 6 feet above the river bottom to avoid impacts to sediments and bottom associated fauna. The diameter of each cooling water intake pipe would be 30 inches. The openings of the cooling water intake pipes would be covered with 2 mm wedge-wire mesh screens.(75) The draft SPDES permit would require AGC to cover the cooling water intake structures with a device called a GunderboomTM Marine/Aquatic Life Exclusion System (Gunderboom), that is intended to eliminate fish mortality.(76)

      In addition to the uptake of process water from the Hudson River, the proposed facility would discharge treated waste water to the Hudson River. The discharge from the proposed facility would consist primarily of water used in the cooling system. The amount of water that would be discharged from the proposed facility depends on the type of fuel being used. The maximum discharge would be 1.4 mgd during oil-fired operations, which relies on a five-cycle concentration rate. When natural gas is used, the discharge rate would be 0.67 mgd, which relies on a ten-cycle concentration rate.(77)

      From the proposed energy facility, treated waste water would be routed to the pumphouse via a single 12-inch diameter pipeline. The discharge pipe would extend from the pumphouse on the west shore of the Hudson River about 480 feet into the river. The diameter of the discharge pipe would transition to 8 inches and would be located 2.5 feet from the bottom. The discharge point, which is identified on the draft SPDES permit as Outfall 001, would be oriented in a 45° vertical angle pointing downstream.(78)

    7. Interpreting BTA: Statutes, Regulations and Case Law

      Section 316 of the federal Clean Water Act (CWA) addresses the discharge of thermal pollution, as well as the intake of cooling water.(79) Section 316(b) establishes a mandatory requirement regarding cooling water intake structures:

      Any standard established pursuant to section 1311 [CWA §301] ... or section 1316 [CWA §306] ... and applicable to a point source shall require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.

      In 1976, the EPA promulgated regulations to implement the best technology standard, which included a development document entitled, Development Document for Best Technology Available for the Location, Design, Construction and Capacity of Cooling Water Intake Structures for Minimizing Environmental Impact, dated April 1976.(80) These regulations, formerly 40 CFR §402.10-402.12, were challenged and remanded to the EPA due to procedural deficiencies in their promulgation.(81) As a result, the regulations, and the development document referenced by the regulations have not been valid since 1977. To date, EPA has not re-promulgated these regulations or issued any other guidance to determine the best technology available.

      Language similar to 33 USC §1326(b) appears at 6 NYCRR §704.5. Although these state regulations do not elaborate further about what would constitute BTA, the Department developed some guidelines, which are outlined in a memorandum dated November 2, 1994 by an attorney formally with the DEC Division of Legal Affairs. This memorandum is identified in the related PSL Article X hearing record as Exhibit 95.

      The parties to the related PSL Article X proceeding debated the reliance to be placed on either the former federal regulations and the 1976 EPA Development Document, or the DEC memorandum. However, the federal and state documents are consistent and provide the same guidance. For example, the 1976 EPA Development Document states that "[t]he variations of available technology, intake conditions, site location, and plant capacity are large and the best technology available must be decided on a case-by-case basis," and that, "[n]o technology can be presently generally identified as the best technology available, even within broad categories of possible application."(82)

      Similarly, the DEC memorandum provides for the development of a matrix, setting forth "technology options, economic costs, and the range of environmental effects."(83) The approach further calls for a determination that the incremental costs of the most stringent aquatic mitigation over the second-best option are not "wholly disproportionate" to the environmental gain.(84) Finally, the memorandum requires a separate BTA determination for each application, rather than applying a preconceived notion of what BTA would be for all power plant cooling systems, like closed cycle cooling, or dry cooling.(85)

      In the instant case, the analysis employed relies for guidance upon the former federal regulations, the 1976 EPA Development Document, and the DEC memorandum. Additionally, reliance is placed on EPA administrative decisions concerning the implementation of CWA §316(b), and related judicial decisions.

      Based on the combination of administrative guidance and case law, the following questions must be addressed to determine whether the best technology available is being applied to cooling water intake structures that are associated with thermal discharges from point sources.(86) The first question is whether a facility's cooling water intake structure may result in any adverse environmental impacts. If the answer is yes, then the second question is whether the location, design, construction, and capacity of the cooling water intake structure reflect the best technology available for minimizing adverse environmental impacts. The third question considers whether there are practicable alternative technologies available to minimize the adverse environmental effects. The final question relates to whether the costs of alternative technologies are wholly disproportionate to the environmental benefit to be gained.

      To determine whether a facility's cooling water intake structure would result in any adverse environmental impacts, EPA has defined the term "adverse" in general terms to mean "unfavorable, harmful, difficult, or detrimental."(87) A draft EPA guidance document states further that such adverse impacts would occur whenever there would be entrainment or impingement damage during the operation of a cooling water intake structure.(88)

      If it is determined that a cooling water intake structure may result in an adverse environmental impact, §316(b) requires a consideration of each of the four factors identified in the statute: location, design, construction, and capacity. In the absence of regulations, determinations of whether a particular technology is the best available are to be made on a case-by-case basis considering various factors, including costs, the age of the facility, the number of fish killed, the additional energy, if any, needed to support improved technology, or other relevant concepts.(89)

      Concerning the location of cooling water intake structures, the 1976 EPA Development Document states that this factor can be the most important consideration. It recommends drawing water from main channels of large streams or from biologically deficient areas. Other factors include: (1) avoiding important spawning areas, fish migration paths, shellfish beds and other areas where aquatic life may be concentrated, (2) selecting a water depth where aquatic life is minimal, (3) selecting locations with strong currents to assist in carrying aquatic life past the intake structures, and (4) selecting locations suited to the proper technical functioning of the particular screening system to be used.(90) Making a determination about the best location for a cooling water intake structure also includes a consideration of the cumulative impacts of other cooling water intake structures.(91)

      Design features should reduce fish losses due to entrainment and impingement. There is no generally accepted intake design which can be said to fulfill the requirements of §316(b) for all facilities.(92)

      With respect to construction, the following should be considered: (1) loss of potential habitat associated with the space occupied by the cooling water intake structure, (2) increased turbidity levels due to erosion of unprotected slopes around the excavations, (3) increased levels of turbidity from inadequately stabilized spoil areas, and (4) filled aquatic areas associated with construction operations.(93) There is no issue with respect to the captioned SPDES permit application that is related to the construction of the pumphouse or the cooling water intake structures and the outfall.

      Since the adverse impacts associated with entrainment are directly related to the amount of water withdrawn, technology that restricts or limits the capacity of a plant's water intake would be the best technology available.(94) Capacity is at the center of the BTA dispute here.

      To determine whether a particular technology produces the greatest reduction in damage to aquatic resources, it is necessary to consider whether alternative technologies are available. Whether a particular technology is available is a question of fact to be determined on a case-by-case basis.(95) Where alternative technologies are available, they should be analyzed to determine whether they constitute the best technology available for minimizing adverse environmental impacts.

      After all the previous factors are considered, one final factor may be considered: cost.(96)

      In 1977, the EPA Administrator approved a cooling water intake structure for a nuclear power plant in Seabrook, New Hampshire.(97) The Administrator determined that other locations for the intake structures might slightly reduce impacts on smelt and flounder, but that the cost of relocating the cooling water intake structures would be "wholly disproportionate to the environmental benefit to be gained."(98)

      An environmental group subsequently challenged the Administrator's decision.(99) As a threshold matter, the US Court of Appeals, First Circuit, found that "[t]he legislative history clearly makes cost an acceptable consideration in determining whether the intake design 'reflect[s] the best technology available.'"(100) The court also referred to the Administrator's application of the "wholly disproportionate" standard and upheld the Administrator's approval of the intake structures for the Seabrook facility.(101)

      The wholly disproportionate standard is not a mere cost/benefit analysis.(102) Rather, a finding must be made that the relative costs are wholly out of proportion with the environmental benefits to be gained. This standard gives presumptive weight to the value of environmental benefits, and places the burden on an applicant to demonstrate that the relative costs are unreasonable.

    8. Application of BTA Factors Relevant to the Cooling Water Intake Structures at the proposed Athens Facility

      (a) Measuring Potential Adverse Impacts

      With respect to potential adverse impacts to fisheries resources, AGC evaluated(103) the impact on 14 fish species at every life stage of development(104) using the Empirical Transport Model (ETM) to estimate entrainment and impingement effects. The results were expressed in terms of the conditional mortality rate (CMR).(105) The fish sizes and life stages selected for use in the model were based on a review of studies analyzing exclusion efficiencies of 0.5, 1, 2, and 3 mm slot cylindrical wedge-wire screens. All eggs, yolk-sac larvae, and post yolk-sac larvae less than, or equal to, 20 mm in length were considered to be vulnerable to entrainment or impingement. Fish population data were obtained from the reported results of the Hudson River Estuary Monitoring Program, a field survey that has regularly sampled Hudson River fish populations for more than 15 years. In this program, the Hudson River is divided into regions, and within each region, strata based on river depth. Given the proposed location of the intake structure, data from the Catskill Region in the bottom and channel strata were used.(106) Other inputs to the model included the maximum withdrawal rate of 7.5 mgd and an entrainment/ impingement mortality rate of 100%.(107)

      For many Hudson River fish species, AGC experts testified that the life history, behavior, and habitat preferences meant that these species are not found in the region in significant numbers at vulnerable life stages, or are present in sizes too large to be adversely affected by entrainment or impingement. Scenic Hudson witness Shultz, and Riverkeeper witness Huddleston, however, criticized the fish mortality modeling.

      Although Riverkeeper and Scenic Hudson argue the contrary,(108) I find that the estimates of fish mortality at the proposed plant are reliable and the underlying CMR rates are generally overestimated for the following reasons. Although the mortality studies assume a constant water withdrawal rate of 7.5 mgd, which is the plant's maximum withdrawal rate, no one contests that the proposed plant would usually withdraw 4.2 mgd on average, or 44% less than the maximum.(109) In addition, the proposed facility would withdraw the maximum capacity only a small percentage of the time.(110) The parties do not dispute there would be fewer than average numbers of eggs in the water column at the depth where the cooling water intake structure would be located even though the model assumes an even distribution. Furthermore, without attempting to quantify the phenomenon, or assign it any specific weight, "compensation" is another reason why the calculated mortality rates should be considered conservative. The parties do not assert that compensation does not exist.(111) Finally, the estimated rate of mortality would also tend to be high because the maximum size fish assumed to be killed (20 mm) is actually large enough for many species to escape the cooling water intake structures by swimming away.(112)

      (b) Proposed Location of the Cooling Water Intake Structures

      As explained above, Riverkeeper alleges that the SPDES permit should be denied because the cooling water intake structures and the outfall would be located near, though not in, "significant habitat areas" designated by the NYS DOS under applicable rules.(113) According to Riverkeeper, the designation of these habitat areas is crucial in considering whether the location of the cooling water intake structures would minimize adverse environmental impacts.

      Acknowledging that the cooling water intake structures and the outfall would be located outside the significant habitat areas, Riverkeeper maintains that the 6.75 mile stretch of the river that includes these areas should be treated as if it were one significant habitat. Nevertheless, Riverkeeper contends that the DOS definition of the term "habitat" includes changes in community structures, food chain relationships, species diversity, population size, reproductive rates, and other factors. Riverkeeper adds that if a proposed action is likely to alter any of the biological parameters beyond the tolerance of the organisms occupying the habitat, the viability of the habitat is impaired or destroyed.

      Mr. Radle testified and DEC Staff argue, however, that a habitat is a place where organisms are found, and that floating organisms such as fish eggs do not bring the boundaries of old habitats with them. According to the Staff, the location of the cooling water intake structures is also much less important than the volume of water passing through the intake and mitigative measures. If Riverkeeper's argument were adopted, the Staff add, then no power plants could be built anywhere within the 120-mile stretch of the Hudson River because there are DOS-designated significant habitat areas through out it.(114)

      For Riverkeeper and Scenic Hudson, this section of the Hudson River is significant because the significant habitat areas at Vosburgh Swamp/Middle Grounds Flats, and Roger's Island are shad spawning areas. American shad has recreational and commercial value, and populations have declined in the past two decades, primarily from the over fishing of adults.(115) They allege that the American shad population in the Hudson River is in a state poor enough to require that shad be given extraordinary protection.(116) As a result, Riverkeeper and Scenic Hudson argue that no additional shad mortality should be tolerated.(117)

      I conclude, that the issue of whether shad should be given extraordinary protection is beyond the scope of this proceeding. Nevertheless, the BTA standard, which applies here, requires that the adverse environmental impacts from the proposed facility, including those to the shad fisheries, must be minimized.

      Riverkeeper's witness did not provide any basis to regard the area where the cooling water intake structures and the outfall would be located as equivalent to a significant habitat area simply because these structures would be located near these designated areas. Therefore, I find that treating undesignated areas as significant habitats renders the DOS designations meaningless. Furthermore, AGC undertook substantial efforts to avoid impacts to significant habitat areas. These include locating the screened cooling water intake structures and the outfall outside of significant areas, in deep, non-littoral areas, where fish do not spawn, with the cooling water intake structures about six feet from the river bottom. Moreover, the silty sand below the cooling water intake structures and the outfall is of a type in which fish do not spawn. Therefore, I conclude that the cooling water intake structures, outfall and associated pipes would not otherwise affect the viability of any designated habitat areas.(118)

      (c) Design of the Proposed Cooling Water Intake Structures

      During the remand in the related PSL Article X proceeding, information was provided about several mitigation designs to reduce further the minor fisheries impacts associated with an hybrid cooling system. Of the four potential mitigation measures identified in Chairman Helmer's November 30, 1999 remand letter, the Gunderboom received the most attention, and was the only one supported by the DEC Staff. The interveners do not support any of the proposed mitigations.

      (i) The Gunderboom

      The following facts are generally not in dispute. The Gunderboom was first developed and deployed for use at Orange and Rockland Utilities' Lovett Generation Station. Development began in 1994 as a result of litigation brought by Riverkeeper concerning the best technology available at the station's cooling water intake.(119) The first in-river deployment occurred in 1995.(120) At the Lovett station, the boom floated in the river, and consisted of two layers of filter fabric that extended from the surface of the river to the river bed and banks, where the boom was held in place with anchors. Within hours of the deployment, however, water swelled and overtopped the Gunderboom. This caused the fabric to clog, which increased the resistance of the boom to river currents and the intake flows to the plant. As a result, the anchors holding the boom to the river bed and banks were dragged out of place.(121)

      Prior to its redeployment in 1996, the manufacturer tested a system that injects compressed air at the toe of the boom between the two layers of fabric.(122) Originally the system was operated manually, but a completely automated, computer controlled system was developed and has been implemented. The air is used to clean the system. The rising bubbles of air diffuse through the layers of boom fabric to remove particles and biota on the boom fabric.(123) Other pre-deployment studies collected information about: (1) currents to estimate the forces that would be exerted on the boom, (2) the benthic conditions to improve the anchoring system, and (3) boom configuration to promote easy and effective cleaning.(124)

      The Gunderboom was deployed at the Lovett facility during the summer of 1999.(125) Both AGC witness Englert and DEC witness Radle conclude that the Gunderboom design being considered for installation at the proposed facility would essentially eliminate both entrainment and impingement of fish if deployed around the cooling water intake structures at the proposed facility.(126)

      (ii) Deployment

      Earlier in the proceeding, AGC regarded Gunderboom technology as still under development. Based on its deployment at Lovett in 1999, however, AGC's engineering expert expressed confidence that the Gunderboom technology could be successfully deployed at the proposed Athens facility, in large measure because the design for the proposed Athens facility would be simpler than the design deployed at Lovett.(127) DEC witness Radle agrees.(128)

      Riverkeeper and Scenic Hudson argue, however, that AGC's and the DEC Staff's conclusions about the Gunderboom are not supported by sufficient evidence.(129) Although Riverkeeper's witness, Mr. Huddleston, testified that the Gunderboom would be effective at reducing impingement and entrainment impacts if designed properly,(130) Riverkeeper maintains there is no basis to believe that a complete seal could be achieved at the proposed Athens facility within 2 years, as presently required in the draft SPDES permit, and that the only real way to test whether a complete seal could be achieved would be after the proposed facility is built, which Riverkeeper asserts is unacceptable.(131) Scenic Hudson contends that the potential for post-installation failure of the boom is great, and that if there is a failure, a significant portion of the spawning season could pass before a failure in the Gunderboom is detected and repaired.(132)

      In reply, AGC argues that concerns about its ability to deploy a Gunderboom successfully are unfounded. The engineering and design work conducted at Lovett since 1995, AGC argues, permitted a successful deployment in 1999. The Gunderboom at Athens, AGC continues, involves successfully proven technology, that would be adopted to the individual, and less challenging, conditions presented at Athens. "Adopting proven technologies to project-specific parameters," AGC argues, "is not a unique concept."(133)

      I find that Mr. Radle's testimony, which refutes Riverkeeper's and Scenic Hudson's contentions is credible and assign it substantial weight. Compared to Lovett, installation of the Gunderboom at the proposed Athens facility would be easier. The Gunderboom at the proposed facility would be smaller and located on the river bed. Compared to Lovett, the cooling water intake structures would be significantly smaller, and intake flows would be 8 times slower.(134) The proposed Gunderboom design would be a series of rectangular panels. Failure would be less likely than at Lovett, because the fabric would be sealed into the panels, and the panels would be attached to a fixed structure.(135) To address concerns about failure, the Gunderboom would be composed of two layers of fabric, and AGC would be required to inspect the Gunderboom at the beginning of the spawning season and certify the condition of the boom.(136) The draft SPDES permit requires biological monitoring, which would detect any significant failures.(137)

      (iii) Effectiveness

      The parties agree that the Gunderboom would virtually eliminate entrainment if effectively deployed. Another issue is its effect on impingement. In the summer of 1999, Lawler, Matusky and Skelly Engineers, LLP(138) conducted qualitative studies to determine the characteristics of the Gunderboom fabric with respect to the impingement of ichthyoplankton at various flow regimes. The studies involved the introduction of striped bass eggs and yolk-sac larvae into flow-though test aquaria equipped with Gunderboom fabric. The results of the studies are presented in a draft report dated November 1999.(139) Witnesses from AGC, DEC and Riverkeeper referred to the studies and draft report in their respective testimony during the related PSL Article X hearing.

      Although the parties do not dispute the results of the studies presented in the draft report, they dispute the significance of the results. According to Dr. Englert, the studies showed that impingement on the Gunderboom fabric would not harm fish eggs, larvae and young juveniles.(140) DEC witness Radle agrees.(141)

      Riverkeeper's witness, Mr. Huddleston, disputes this conclusion, opining that the laboratory conditions of the studies were not representative of the conditions in the Hudson River. In addition, only the effects on striped bass eggs and their larvae were studied, while other species such as alewife, bay anchovy and American shad were not studied.(142)

      Moreover, Mr. Huddleston maintains that no conclusions can be made about the potential impacts associated with impingement on the Gunderboom because control organisms did not survive for at least 24 hours.(143) Referring to the Standard Method for the Examination of Water and Wastewater,(144) Mr. Huddleston testified that 80% to 90% survival of the control organisms is required for a short-term (24 to 48 hour) acute toxicity test to be considered acceptable.(145)

      Mr. Huddleston opined,(146) and Riverkeeper argues,(147) that a similar survival rate in the control aquaria should have been used in the impingement studies. AGC argues that use of this standard would be unwarranted and misleading.(148)

      I find that AGC's point is valid. Neither Riverkeeper nor its witness offered any explanation for why the referenced survival rate standard used to determine the short-term toxic effect of waste water effluents should be applied to the impingement studies. In addition, there is nothing in the record that describes what acute toxicity studies are, and what the similarities and differences of such studies are compared to the impingement studies described in Exhibit 363. Absent such an explanation, there is no basis for applying the proposed standard here.

      The purpose of the impingement studies was to determine survival time, and there was no expectation that either the test or the control organisms would survive for an extended period of time during the impingement studies.(149) One significant finding of the impingement studies is that the striped bass eggs and larvae in the test tanks subjected to flows at 5 gpm and 10 gpm survived about as long as the organisms in the 30 gallon control tanks.(150) Moreover, eggs developed successfully while impinged on the boom fabric, and fish larvae swam in the area in front of the boom, without food, for up to 18 hours.(151)

      In the Hudson River, however, larvae and eggs would not be exposed to anything like these test conditions. Larvae would be exposed to the boom for only about 30 seconds due to the water currents.(152) If fish eggs became impinged on the boom, they would remain in contact with it until they are removed by the air-backwash system.(153) Since fish eggs developed normally after being impinged on the fabric for 18 hours during the tests,(154) I find that the potential adverse effects associated with impingement on the Gunderboom fabric would be very low, particularly with periodic air-backwashes.

      During the related PSL Article X hearing, Riverkeeper asked DEC witness Radle whether eggs from the relevant fish species have adhesive qualities.(155) Depending on the species, the adhesive nature of fish eggs found in the Hudson River varies from not being adhesive to being very adhesive. In addition, fish eggs may be buoyant, demersal (sinking to the bottom), pelagic (floating in open water), or buried in gravel nests.(156) For example, striped bass eggs are nonadhesive and semiboyant,(157) and American shad eggs may be either demersal or pelagic.(158)

      The impingement studies used striped bass eggs and yoke-sac larvae as the test organisms. Although similar studies have not been repeated using other species as test organisms, I find that such studies are not needed based on the following. The adhesive and buoyant qualities of eggs from different fish species may be a factor in whether eggs from these different fish species would become impinged on the Gunderboom. Since some of the striped bass eggs that were impinged on the Gunderboom during the studies hatched and swam away from it,(159) however, it can be reasonably inferred that if eggs from other fish species become impinged on the Gunderboom and were not subsequently dislodged by the air-backwash system, then they could also develop normally, hatch and subsequently swim away from the Gunderboom.(160)

      Basically, Riverkeeper's and Scenic Hudson's arguments against deployment of the Gunderboom at the proposed facility amount to the claim that the Gunderboom technology is new, and to date has only been deployed at the Lovett generating station.(161) In many prior instances,(162) however, DEC has required permittees to implement newly developed technologies, and DEC witness Radle explained that these new technologies have to be installed first somewhere to advance the state of the available technology.(163)

      (d) Capacity

      Riverkeeper and Scenic Hudson continue to argue that a dry cooling system, rather than a hybrid system with a Gunderboom, should be approved for this facility. Scenic Hudson argues that dry cooling would have a lower visual impact, and should be required for that reason. I conclude, however, that the adverse environmental impacts that must be minimized by the BTA standard relate only to potential water quality and aquatic resources.

      Riverkeeper and Scenic Hudson also argue that dry cooling would have a lower aquatic impact, as well. Before the remand in the related PSL Article X proceeding, these arguments rested on the fact that dry cooling uses less water than hybrid cooling and would have a comparably lower fish mortality compared to a hybrid cooling system. Following the remand, they further contend that the Gunderboom cannot be expected to work effectively enough to produce lower fish mortality than dry cooling because the Gunderboom is relatively new.

      As explained above, the adverse impacts associated with entrainment are directly related to the amount of water withdrawn. Therefore, technologies must be considered that restrict or limit the capacity of a plant's water intake.(164) For the proposed facility a dry cooling system would require 0.18 mgd compared to a hybrid cooling system, which would require 4.2 mgd on average, and 7.5 mgd maximum. Reducing the capacity of the cooling water intake structures from 4.2 mgd to 0.18 mgd would provide a corresponding reduction in the potential adverse impacts associated with entrainment. However, the deployment of the Gunderboom during the spawning season would prevent entrainment and would minimize adverse effects from impingement. Accordingly, I find the interveners' arguments unpersuasive.

      (e) The Cost Differences between Cooling Systems

      To further support its contentions that dry cooling would be BTA, Scenic Hudson contends that the costs associated with a dry cooling system at the proposed facility compared to those for a hybrid system are not wholly disproportionate to the environmental benefits to be gained.(165) Scenic Hudson alleges(166) that AGC has exaggerated the costs of dry cooling, and asserted that the incremental construction cost estimate ($23,000,000)(167) was inadequately supported.

      Scenic Hudson also takes issue with including opportunity costs.(168) In this regard, Scenic Hudson's main argument is that the MAPS(169) projections for the proposed facility's costs and capacity factor (i.e., the percentage of capacity that is dispatched over time) are "subject to too many unknowable variables to support a 'cost' calculation."(170) Other related objections include Scenic Hudson's contention that the opportunity costs should not be considered because they are private lost revenues and not public costs. In addition, the heat rate penalty, which is the largest cost item, depends on factors that are too speculative for reliable forecasting, such as the cost of natural gas, the wholesale price of energy, and dispatch frequency over the facility's life (i.e., capacity factor).(171)

      With respect to costs, Riverkeeper argues that AGC improperly compares the cost of dry cooling with wet cooling.(172) It correctly asserts that the proper comparison is between dry cooling and hybrid cooling because these are the options under consideration.

      The additional information gathered at the remand hearing has refined pertinent cost data. With the addition of operation and maintenance expenses and the expenses associated with noise control features, the amount by which the total evaluated cost for a dry cooling system exceeds the comparable cost of a wet system is in the range of $55.5-$66.0 million.(173) The record compiled earlier showed that the total evaluated cost of a hybrid cooling system would exceed the cost of a wet system by $22 million. Thus, dry cooling would cost $33.5-$44.0 million more than hybrid cooling, without a Gunderboom. The total evaluated costs for a Gunderboom are $3.8 million, which includes $2.1 million in capital costs, and $1.7 million for operation and maintenance over the plant's 20-year life.(174) Thus, a dry cooling system at the proposed facility would cost $29.7-$40.2 million more than the currently proposed hybrid system with a Gunderboom.

      I find that this difference is not a great percentage increase in the total cost of the facility, as the DEC Staff previously pointed out.(175) Moreover, Scenic Hudson makes a reasonable point that the opportunity cost component of these costs is not rigorous. It is unreasonable to assume, however, that the $30-$40 million evaluated cost for output penalty and heat rate penalty(176) is entirely baseless because the proposed facility would likely run at a high capacity factor, and certainly not a capacity factor of zero.(177) Assuming Scenic Hudson's relatively low 70% capacity factor, the total evaluated costs for the output and heat rate penalties range from $24-$34 million,(178) which is approximately the same as the total additional cost of dry cooling over hybrid cooling.

      AGC has correctly observed that the reliability of MAPS was litigated in the related PSL Article X proceeding. With respect to the opportunity costs, it is important to note that while fuel costs and energy prices may vary, the performance difference between dry cooling and hybrid depends upon the technology differences and remains a constant. A facility using dry cooling technology would always require 1.4-1.9% more fuel compared to one using wet or hybrid cooling technology. Therefore, as just noted with respect to capacity factor, there is a substantial cost difference over a wide range of assumptions.

      As to Scenic Hudson's claim that these are private costs, and are therefore not relevant, AGC's point that this argument overlooks the public interest in efficient competition is reasonable. Over time, if the capacity factor falls as Scenic Hudson suggests, the increased presence of this facility's bid prices on the margin will increasingly translate the opportunity costs from private costs into consumer costs.

    9. Conclusions

      The following conclusions about the location, design and capacity of the proposed cooling water intake structures are founded on the preceding discussion. At the outset, the proposed facility would release thermal discharges and its cooling water intake structures may result in adverse environmental impacts to the fisheries resources of the Hudson River. Therefore, the BTA standard outlined in §361(b) of the federal Clean Water Act and 6 NYCRR §704.5 applies here.

      Based on the full and complete record developed on this matter, I find that the proposed hybrid cooling system with a Gunderboom, as presently required in the draft SPDES permit,(179) meets the BTA standard outlined in§316(b) of the federal Clean Water Act and 6 NYCRR §704.5. The proposed location of the cooling water intake structures avoids important spawning areas, and would be in deep water where strong currents will carry aquatic life past the intake structures. As a result, the location of the cooling water intake structures would reduce the potential for entrainment and impingement of fish at every stage of development.

      The design for the proposed cooling system would use combined cycled technology that would withdraw substantially less water than conventional once-through cooling systems, and thereby provide a concomitant reduction in the potential for entrainment. The reliable conditional mortality rate data demonstrate that the potential for entrainment of all fish species considered at every stage of development is very low with combined cycle cooling.

      Additional design features include the 2 mm wedge-wire screen and the Gunderboom. The wedge-wire screen would further reduce the potential for entrainment of organisms larger than 2 mm in dimension. Deployment of the Gunderboom around the cooling water intake structures during the spawning season, as required by the conditions in the draft SPDES permit,(180) would virtually eliminate the potential for entrainment. Given the proposed flow through capacity design of the Gunderboom, potential adverse impacts from impingement would also be nearly eliminated based on the results of the impingement studies referenced above. As previously noted, the construction of the proposed cooling water intake structures was not at issue.

      Finally, AGC has agreed to deploy the cooling technologies presently required in the draft SPDES permit. Therefore, the cost associated with this technology is not at issue.

      In summary, the record evidence concerning alternative cooling technologies is complete, and no further adjudication is required. In my view, the full record demonstrates that the installation of a hybrid cooling system with a Gunderboom at the proposed facility satisfies applicable BTA standards, and thus would minimize potential adverse aquatic impacts.

    10. Riverkeeper's Proposed Issue 3; Scenic Hudson's Proposed Issue 8 - Antidegradation

      The federal Clean Water Act requires each state to develop and implement an antidegradation policy to protect existing water quality from being degraded. (181) The federal regulations require that existing water uses, and the level of water quality needed to protect these existing uses, must be maintained and protected. The state may allow a lowering of water quality (i.e., degradation) only if it is necessary to accommodate important economic or social development in the area where the waters are located. The state must assure, however, that the resulting water quality would be sufficient to protect existing uses fully. In addition, for thermal discharges, the antidegradation policy must also be consistent with §316 (182) of the federal Clean Water Act.(183)

      The parties acknowledge that New York currently has a federally approved antidegradation policy, which is set forth in NYS DEC Organization and Delegation Memorandum No. 85-40, Water Quality Antidegradation Policy, dated September 9, 1985 (O&D Memo No. 85-40). The participants dispute, however, whether the current antidegradation policy is sufficient to address the potential adverse aquatic impacts uniquely associated with electric generating facilities, and whether the requirements of the policy, regardless of its sufficiency, have been adequately applied to the captioned SPDES permit application.

      According to Riverkeeper and Scenic Hudson, the current antidegradation policy does not adequately address major electric generating facilities, and therefore is in contravention of the federal Clean Water Act.(184) Riverkeeper argues that for new power plants, the Department's antidegradation policy should consider the potential water quality impacts associated with water withdrawals.(185) In addition, Riverkeeper refers to Technical and Operational Guidance Series (TOGS) 1.3.9 entitled, Implementation of the NYSDEC Antidegradation Policy - Great Lakes Basin, dated February 26, 1998.

      Although TOGS 1.3.9 applies to new or increased discharges of bioaccumulative chemicals of concern to waters of the Great Lakes, Riverkeeper proposes that the analysis of important social or economic development outlined in §2.3 of the TOGS document should be applied here. In particular, Riverkeeper wants AGC to undertake the economic analyses outlined in EPA's Interim Economic Guidance for Water Quality Standards (March 1995), which is cited in TOGS 1.3.9. Riverkeeper proffered William Dougherty, Ph.D., P.E., from the Tellus Institute, to testify about the results of these analyses after AGC undertakes them.(186)

      The intervening parties also contend that under the Department's SPDES program, antidegradation analyses are conducted within the context of the environmental review required by the State Environmental Quality Review Act (SEQRA; ECL Article 8) and 6 NYCRR Part 617.(187) Riverkeeper and Scenic Hudson, however, argue that new electric generating facilities are expressly exempt from the review required by SEQRA,(188) which when necessary provides for a balancing of the potentially unavoidable adverse environmental impacts against the potential social and economic benefits of the proposal.(189) Since PSL Article X precludes a consideration of the need for a proposed power plant, as well as the SEQRA balancing process, Scenic Hudson argues that the Department's antidegradation policy must be amended to correct these defects in order to comply with the federal Clean Water Act.(190)

      After the Department has revised the antidegradation policy, Scenic Hudson argues that the revised policy would have to be approved by EPA, and then applied to the captioned SPDES permit application.(191) Riverkeeper alleges that the amount of water withdrawn from the Hudson River and the waste water discharged to the river from the proposed facility fitted with a hybrid cooling system would presumably degrade the water quality of the Hudson River, and therefore require a balancing of the potential adverse environmental impacts of the withdrawal and discharge against the potential social and economic benefits of the proposal.(192)

      Riverkeeper proffers the testimony of Susan Falzon, a resident of Athens, who would testify about the potential economic and social impacts that the proposed facility would have on the local community. In addition, Riverkeeper states that Dr. Dougherty's testimony would also address the limited impact that a dry cooling system would have on the profitability of the proposed facility.(193)

      Scenic Hudson characterizes the proposed issue as a legal one. Scenic Hudson explains that after a revised antidegradation policy has been developed by the Department and approved by EPA, that a factual issue could exist about whether the proposed facility would comply with the revised antidegradation policy. Consequently, Scenic Hudson proffers Dr. Bell, as well as an economist who would testify, respectively, about whether the proposed facility would comply with the antidegradation policy, and what the potential economic and social impacts would be.(194)

      AGC asserts there are no adjudicable issues related to New York's current, federally-approved antidegradation policy. First, AGC argues that the requirements in 40 CFR §131.6 apply to the Department and require it to develop an antidegradation policy that is consistent with the elements outlined in 40 CFR §131.12. According to AGC, the Department has done so, and EPA has reviewed and approved it. In addition, AGC contends that the antidegradation policy is part of the water quality standards program, which applies to discharges, and therefore, not to cooling water intake structures or the amount of water withdrawn by them.(195)

      Second, AGC disputes Riverkeeper's and Scenic Hudson's arguments that the Department can only implement the current antidegradation policy through SEQRA. In addition to SEQRA, AGC argues that the Department's antidegradation policy includes other means to implement it such as the state's federally-approved SPDES program, which is based on water quality standards and effluent limitations, as well as the procedures for classifying water bodies.(196)

      AGC contends further that the Department's compliance with the state's antidegradation policy cannot be adjudicated in this proceeding unless there is a claim that a particular permitting standard would be violated. AGC points out that a thorough review of the potential impacts of the proposed facility on water quality was conducted in the related PSL Article X proceeding, the record of which has been incorporated into the record of this proceeding.(197)

      Citing NRDC v. EPA, 909 FSupp 153, 160-161 (SDNY1995), the DEC Staff contend there is no issue about whether a current, federally-approved state antidegradation policy exists. The Staff argue further that Commissioner Cahill's letter dated February 25, 2000 to US EPA-Region 2 Administrator Fox explains how the Department will apply the state's antidegradation policy to PSL Article X applications for electric generating facilities. According to the Staff, the related PSL Article X proceeding provided an opportunity to address issues associated with antidegradation, and that the record of that proceeding, which has been incorporated into this one, demonstrates there would be no degradation. Therefore, the DEC Staff conclude there are no substantive and significant issues for adjudication with respect to this proposed issue.(198)

      Discussion and Ruling: As explained above, all the participants agree that the state has an antidegradation policy as required by the federal Clean Water Act, which is set forth in O&D Memorandum No. 85-40, dated September 9, 1985. The issues proposed by Riverkeeper and Scenic Hudson are whether the policy can be applied to PSL Article X applications for electric generating facilities, and whether that policy has been adequately applied here.

      In a letter dated November 10, 1998, the US EPA asked DEC to clarify how the Department would carry out antidegradation reviews for new electric generation facilities subject to PSL Article X. Commissioner Cahill responded in a letter dated February 25, 2000, which is identified in this proceeding as Exhibit 3.

      Referring to O&D Memorandum No. 85-40, the Commissioner explains that implementation of the state's federally approved antidegradation policy relies generally upon the SPDES permitting process and the stream classification system. According to the Commissioner's letter, a review of PSL Article X shows that the environmental review required by this statute is at least as rigorous and thorough as that required by SEQRA. Consequently, the PSL Article X review process can provide the Department with sufficient information to determine whether a proposed electric generating facility would lower water quality, and if necessary, balance the anticipated degradation against the potential economic and social benefits associated with the proposal.

      The Commissioner's letter explains further that the Department's reliance on the PSL Article X environmental review to implement the state's antidegradation policy, in lieu of an environmental impact statement that may be required by SEQRA, is not a "revision" of the state's federally approved SPDES program. The letter points out that O&D Memorandum No. 85-40 identifies a variety of different statutory and regulatory mechanisms that may be used to implement the state's federally approved antidegradation policy.

      Riverkeeper states that the policy determination presented in Commissioner Cahill's February 25, 2000 letter has no merit, and maintains that PSL Article X is not a substitute for SEQRA.(199) Likewise, Scenic Hudson objects to the Commissioner's explanation of how the Department's antidegradation policy would be applied to major electric generation facilities through the PSL Article X review process. Scenic Hudson contends that EPA must assent to the Commissioner's policy determination, before a final decision about the captioned SPDES permit application can be made.(200) AGC, on the other hand, supports the Commissioner's policy determination.(201)

      In my view, the Commissioner's February 25, 2000 letter thoroughly explains how the Department would carry out antidegradation reviews for new major electric generation facilities that are subject to PSL Article X. Although the intervening parties do not agree with the Commissioner's policy determination, no one has challenged his authority to make such determinations. Therefore, the Commissioner's policy determination, as set forth in the February 25, 2000 letter, will be applied to the captioned SPDES permit application.

      Riverkeeper contends that the Department's antidegradation policy should consider the potential water quality impacts associated with water withdrawals. The US Supreme Court has determined that the distinction between water quality and water quantity is artificial, and that in many cases water quantity is closely related to water quality. For example, significantly lowering the water level could adversely impact a water body's designated uses. The court determined that the State of Washington may impose a minimum stream flow requirement to maintain a designated water use.(202) I conclude, therefore, that the application of the Department's antidegradation policy to the captioned SPDES permit application should consider the potential water quality impacts associated with the proposed volume of water to be withdrawn, to the extent that a minimum streamflow requirement applies. Although related, concerns about whether the capacity of the cooling water intake structures for the proposed facility constitute best technology available (BTA) have already been addressed above.

      The focus now turns to Riverkeeper's and Scenic Hudson's allegations. First, Riverkeeper presumes that the amount of water that the proposed facility would withdraw from the Hudson River and the nature of waste water that the facility would discharge to the river would degrade its quality. This presumption is based on the use of a hybrid cooling system at the proposed facility that would withdraw 4.2 million gallons per day (mgd) on average, and a maximum of 7.5 mgd when using fuel oil.(203) Given the expected degradation, Riverkeeper and Scenic Hudson then contend that it would be necessary to balance the potential adverse environmental impacts associated with the withdrawal and discharge against the potential social and economic benefits of the proposal.

      Riverkeeper's and Scenic Hudson's arguments and their respective offers of proof center on the need to balance the potential adverse environmental impacts of the proposed facility against its social and economic benefits, and the alleged lack of any potential social and economic benefits. This balancing, however, is required only if the quality of the water body would be degraded by the proposed withdrawal and discharge. With respect to the proposed facility, the intervening parties only presume degradation would occur, and do not offer anything to show that the water quality of the Hudson River would be degraded by the withdrawal of water, by the discharge of treated waste water to it, or by the combination of both the withdrawal and discharge.

      Riverkeeper does not assert that the volume of water proposed to be withdrawn by the facility would violate a minimum streamflow requirement. Neither does it take issue with any of the effluent limits and other conditions in the draft SPDES permit developed to maintain the water quality and the current, designated uses of this portion of the Hudson River.

      Although Scenic Hudson initially took issue with the proposed thermal discharges, Scenic Hudson withdrew this proposed issue. Scenic Hudson asserts, however, that the draft SPDES permit is defective because it does not require water quality monitoring to determine whether the action levels of certain potential pollutants would be exceeded, which would provide a basis for reopening the permit to impose additional controls or effluent limitations. This proposed issue, however, was considered above and was determined not to be substantive and significant.

      The record from the related PSL Article X proceeding shows that the proposed facility would not degrade the water quality of the Hudson River. AGC undertook a plume dispersion analysis using the USEPA Cornell Mixing Zone Expert System (CORMIX) to evaluate compliance with Class A fresh surface water quality standards at the limits of the anticipated mixing zones for thermal and non-thermal effluent discharges.(204) The results of the CORMIX model were not controverted, and show that the waste water discharges from the proposed facility would comply with Class A fresh surface water quality standards.(205) Since the petitions filed by Riverkeeper and Scenic Hudson concerning this matter do not include any offers of proof that refute these findings, it is not necessary to balance the potential adverse environmental impacts of the proposed facility against its social and economic benefits. Therefore, I find there is no substantive and significant issue for adjudication related to antidegradation.

      It is also significant to note that the Issues List for the related PSL Article X proceeding included the following issue:

      Will the proposed facility have socio-economic impacts that raise pertinent considerations or public interest concerns that the Board should consider pursuant to PLS §168? (e.g., - property values, tax revenues, employment and incomes, tourism)(206)

      At the related PSL Article X hearing, AGC called Peter J. Ricci to testify about this issue.(207)

      Mr. Ricci testified about the beneficial social and economic impacts that would result from the construction and operation of the proposed facility. Although an opportunity was provided, no one cross-examined Mr. Ricci. In addition, no one proffered any other witnesses to testify about this issue.

    11. Scenic Hudson's Proposed Issue 9 - Cumulative Impacts

      Scenic Hudson asserts that an analysis is necessary to determine the potential cumulative adverse environmental impacts that may be associated with the proposed facility and 10 other electric generation facilities proposed in the Hudson River valley. Scenic Hudson reviewed the Department of Public Service's (DPS) web page which lists several PSL Article X applications at various stages of review. In addition, Scenic Hudson asserts that a DEC Bureau Chief informed Scenic Hudson's Environmental Director that five additional facilities not listed on the DPS web site, are being proposed at various sites in the Hudson River valley.(208)

      Citing case law,(209) Scenic Hudson contends that SEQRA requires agencies such as the Department to assess the cumulative impacts of proposed actions taken together with those of existing developments and the impacts of other proposed actions affecting the same natural resource area. Scenic Hudson argues that regardless of whether the proposed facility is classified as a SEQRA Type II action, the Department is still required to comply with the overall policies of SEQRA.(210)

      Scenic Hudson asserts further that the scope of the Department's cumulative impact analysis should not be limited to potential aquatic impacts. According to Scenic Hudson, the cumulative impact analysis must include the potential impacts to water quality, aquatic life and visual impacts associated with the proposed facility, the other 10 proposed facilities and the existing electric generating facilities.(211) Scenic Hudson proffered Eric Shultz, Ph.D., who would testify about the cumulative effects of the existing electric generating plants on Hudson River fisheries. In addition, Ralph Huddleston would testify about the efficacy of the Gunderboom and related fisheries issues. Finally, Scenic Hudson offered Richard Smardon, Ph.D., who would testify about potential visual impacts associated with the list of proposed and existing electric generating facilities.(212)

      According to AGC, no additional information is necessary about potential cumulative impacts. First, AGC argues that the requirements of SEQRA do not apply to the captioned matter because it is being processed pursuant to PSL Article X.(213) If a cumulative impact analysis is required, then AGC contends that a substantial amount of data already exists in the PSL Article X application materials which obviates the need to do any additional studies here. In addition, AGC argues that its water quality analysis essentially includes a cumulative analysis to determine whether its proposed discharges would meet the applicable water quality standards. With respect to the other proposed power plants, AGC contends that it should not have the burden of conducting cumulative impact analyses about facilities that do not exist, and which may not obtain the required permits and certificates.(214)

      The DEC Staff contend that Scenic Hudson's assertion that SEQRA requires a "forward" analysis concerning the proposed power plant applications listed on the DPS web site and others is in error.(215) According to the Staff, the applications on the web site are speculative because they are in preliminary stages of review. If, and when, these applications or others not yet identified on the web site are determined by the Chair of the Siting Board to be in compliance,(216) the Staff argue that those future PSL Article X applications would be required to consider the potential impacts that their respective proposals may contribute to the circumstances in effect at that time.

      With respect to potential aquatic impacts, DEC Staff contend that the conditional mortality rate (CMR) analysis already considers the potential cumulative impacts that the proposed facility would have on existing fish populations. According to the Staff, no additional studies are needed.(217)

      Discussion and ruling: Scenic Hudson's proposed issue concerning potential cumulative impacts raises a number of questions about the scope of the environmental review that should be applied to the captioned matter. One of the principal questions is the relationship between SEQRA and PSL Article X.

      ECL §8-0111(5) provides a list of actions that are excluded from the preparation of environmental impact statements (EIS). This list includes actions subject to review pursuant to PSL Article X.(218) The exclusion is limited, however, to the preparation of an EIS, and not from the other requirements in SEQRA, such as the requirement to furnish studies about the potential environmental impacts associated with a proposed facility.(219) Although 6 NYCRR §617.5(c)(35) characterizes actions subject to PSL Article X as Type II, and states that they are not subject to the environmental review required by Part 617, this regulatory provision cannot be reasonably interpreted in a manner that is broader in scope than its enabling statute. Therefore, I conclude that the exclusion provided by the regulation must be limited to an exclusion from the preparation of an EIS, and nothing more.

      A cumulative impact analysis is a requirement of SEQRA. Such an analysis would be necessary, however, only when there is a connection between actions. There can be a cause and effect relationship between actions, or a common component of the actions. For example, the Siting Board's simultaneous consideration of the trade-offs between two proximate PSL Article X applications. Simultaneous actions, in and of themselves, however, do not establish the relationship needed to require a consideration of cumulative impacts.(220)

      To date, the application sponsored by AGC is the only facility subject to PSL Article X, which proposed to be located in the Hudson River valley, that the Chair of the Siting Board has determined to be in compliance with the requirements outlined in PSL §164. Although others have been proposed, no other determinations of compliance have been made. Absent a compliance determination pursuant to PSL §165(1), I find that the proposals identified on the DPS web page and those alluded to in Scenic Hudson's petition for party status are speculative. Therefore, I conclude that additional studies about the potential cumulative impacts that the proposed facility at Athens may have in combination with the proposals identified on the DPS web page and others are not necessary.

      I further find that potential cumulative impacts that the captioned application may contribute to have already been considered, and those analyses are sufficient. Analyses have been undertaken with respect to water quality and potential impacts on fisheries resources that take into account the effects of existing cooling water intake structures, and discharges to the Hudson River. The results of AGC's water quality analyses, which were the subject of the related PSL Article X hearing, show that thermal and chemical discharges from the propose facility would comply with established effluent limitations and would not contravene current water quality standards, thereby preserving existing uses of this portion of the Hudson River. As explained in great detail above, the cooling water intake structures for the proposed facility, as conditioned by the draft SPDES permit, would implement the best technology available to minimize environmental impacts.(221) Future PSL Article X cases will be required to undertake similar analyses, and those analyses will have to be based on the conditions in effect at that time.

Record of Compliance

  1. Background and Summary of Proceedings

    On August 8, 1991, the DEC Commissioner issued an enforcement guidance memorandum (EGM) entitled, Record of Compliance (ROC), which was revised in February 1993. The purpose of the ROC EGM is to provide guidance on administering and enforcing the Environmental Conservation Law and its implementing regulations. The ROC EGM addresses the Department's authority to assess the fitness or suitability of an applicant or permittee to obtain or hold a permit issued by the Department.

    At the February 28, 2000 legislative hearing, many people commented about the Pacific Gas and Electric Company's record of compliance with respect to its facilities in California. In addition, numerous written comments were filled about this topic. As explained further below, the Pacific Gas and Electric Company is related to the Athens Generating Company, LP. During the February 29, 2000 Issues Conference, I called these comments to the attention of the Department Staff, and requested that they review the comments and report back to me. I stated that the other parties would have an opportunity to respond to the Staff's review of the comments related to the Pacific Gas Electric Company's compliance history.(222)

    In its reply petition dated March 9, 2000, Riverkeeper contends that the PG&E Corporation is an example of the type of applicant who is unsuitable to carry out responsibilities under the Department's permits.(223) This generated a flurry of correspondence from the Issues Conference participants, which is summarized below.

    Responding in a letter dated March 13, 2000, AGC requests that Riverkeeper's proposed record of compliance issue be dismissed as untimely. In a letter dated March 15, 2000, DEC Staff object to Riverkeeper's March 9, 2000 submission, but explain that they will consider the comments made during the legislative hearing, as well as the information provided by Riverkeeper. In a letter dated March 16, 2000, Riverkeeper maintains that its comments are appropriate.

    Subsequently, with a cover letter dated March 17, 2000, Scenic Hudson provided the Staff with its research about PG&E's compliance history for the Staff's review and consideration.(224) In the cover letter, Scenic Hudson suggested that the DEC Staff request that I postpone issuing this ruling until the Staff completes its investigation.

    To develop a record that would permit a full and thoughtful assessment of this topic, I directed the Department Staff, in a letter dated March 27, 2000, to review the information submitted by Scenic Hudson and Riverkeeper, and to investigate further, as appropriate. I explained that until I received the Staff's report, I would reserve ruling on all proposed issues for adjudication.

    Subsequent to my March 27, 2000 letter, I have received more correspondence from AGC, Scenic Hudson and the Department Staff. In a letter dated March 27, 2000, AGC objects to my decision to withhold the issues ruling until the DEC Staff have responded to the comments about PG&E's compliance history. In a letter dated March 30, 2000, Scenic Hudson supports my decision to withhold the issues ruling pending Staff's review of the legislative comments and the submissions filed by Riverkeeper and Scenic Hudson about PG&E's record of compliance. In a letter dated April 4, 2000, the Department Staff requested additional time to review the comments concerning PG&E's record of compliance, as well as the submissions that AGC had provided to the Staff.

    In a letter dated April 4, 2000, I denied AGC's request, and stated that I would continue to withhold the issues ruling. Also, I granted, in part, the Department Staff's request to modify the schedule. The revised schedule authorized responses from the Staff and AGC by April 10, 2000, and replies from all parties by April 14, 2000.

    By letter dated April 5, 2000, Scenic Hudson moved to add the Applicant's "record of compliance" as an issue for adjudication, and incorporated by reference the arguments and information previously provided to the Department Staff in Scenic Hudson's Memorandum of Applicant's Record of Compliance, dated March 17, 2000. Riverkeeper joined in Scenic Hudson's motion by letter dated April 5, 2000.

    The Department Staff responded to Scenic Hudson's motion in a letter dated April 6, 2000, and argue that the motion is not necessary given my direction to the Department Staff to review the question. In addition, the Staff contend that Scenic Hudson's motion is untimely and does not provide an adequate showing of good cause for the late filing.

    With a cover letter dated April 7, 2000, AGC timely filed a memorandum that collectively responded to Point III of Riverkeeper's March 9, 2000 memorandum, Scenic Hudson's March 17, 2000 memorandum, and Scenic Hudson's April 5, 2000 motion.(225) In addition, I received a copy of a letter dated April 7, 2000 from AGC's attorneys addressed to the Department's Counsel, which provided additional information about some of the "high managerial agents" in the Athens Generating Company. With a cover letter dated April 10, 2000, the Department Staff timely filed a memorandum responding to the interveners' memoranda on record of compliance.(226) Timely filed replies were received from Scenic Hudson,(227) Riverkeeper(228) and AGC.(229)

  2. Corporate Structure

    Using publicly available information, as well as the information provided by Riverkeeper, Scenic Hudson and AGC, the Department Staff developed a hierarchy of the PG&E corporate structure. In their respective replies, the other parties offered additional information about PG&E's corporate structure prior to the creation of the holding corporation. An organization chart is attached to this ruling as Appendix A.

    Prior to the creation of the PG&E Corporation in January 1997, the Pacific Gas and Electric Company and Bechtel Enterprises, Inc., formed the US Generating Company in 1987.(230) Then, with the creation of the PG&E Corporation, the US Generating Company became an indirect subsidiary of the Pacific Gas and Electric Company.(231) Bechtel subsequently sold all its interest in the US Generating Company in 1998.(232)

    The PG&E Corporation owns two subsidiaries relevant to the investigation of AGC's fitness for a SPDES permit. One is the Pacific Gas & Electric Company, which is a regulated public utility that provides electric and natural gas services in northern and central California. The other relevant subsidiary of the PG&E Corporation is the PG&E National Energy Group, Inc. The PG&E National Energy Group, Inc., in turn, owns PG&E Enterprises, which owns PG&E Shareholding, Inc. PG&E Shareholding, Inc., owns the PG&E Generating Company, LLC.(233) The PG&E Generating Company, LLC, is a limited liability company that, directly or indirectly holds over 200 companies.(234)

    The PG&E Generating Company, LLC, owns two companies that are of interest here. They are the PG&E Generating Energy Group, LLC, and PG&E Generating Services, LLC. The PG&E Generating Energy Group, LLC, is an intermediate holding company that holds interests in all the unregulated, exempt wholesale generating facilities owned by affiliates of the PG&E Generating Company, LLC. For example, the PG&E Generating Energy Group, LLC, owns the Black Hawk Power Corporation and the Peach I Power Corporation. The Athens Generating Company, is a limited partnership that is wholly owned by the Black Hawk Power Corporation and the Peach I Power Corporation. Currently, the Athens Generating Company, LP, is a development company that was formed to construct, own and operate the proposed electric generating facility.(235)

    As explained above, the PG&E Generating Company, LLC, also owns PG&E Generating Services, LLC. PG&E Generating Services, LLC, in turn, owns PG&E Operating Services Holdings, Inc., and US Gen Holdings, Inc. PG&E Operating Services Holdings, Inc., and US Gen Holdings, Inc., are the sole partners of the PG&E Generating Company, which is a California general partnership. The PG&E Generating Company is the only subsidiary of the PG&E Generating Company, LLC, that has employees. The PG&E Generating Company has agreements to manage all of the affiliate companies held under the control of the PG&E Generating Company, LLC. It is expected that the PG&E Generating Company will enter into an agreement with the Athens Generating Company, LP, to supply personnel to operate the proposed facility.(236)

    Prior to 1999, the PG&E Generating Company was known as the US Generating Company. Subsidiaries of the former US Generating Company are now operated by the PG&E Generating Company. A subsidiary of the former US Generating Company called the US Operating Services Company ran the East Syracuse Facility in Solvay, NY, from 1993 to 1998. Then, the facility was sold to a subsidiary of the Orion Power Holding Company. In 1994, the former US Generating Company purchased the Selkirk facility, which was originally developed by the J. Makowski Company, Inc. Presently, a limited partnership affiliated with the PG&E Generating Company is the managing general partner that operates the Selkirk facility.(237)

  3. Summary of the Parties' Positions

    According to Riverkeeper, the PG&E Corporation has exhibited a pattern of noncompliance which presents a potentially significant threat to the environmental and the state's natural resources. Citing the PG&E Corporation's compliance performance record for 1997, Riverkeeper argues that this kind of behavior should not be rewarded by issuing a SPDES permit to AGC.(238) Riverkeeper also provided copies of the consent orders(239) concerning alleged violations at the Pacific Gas and Electric Company's Diablo Canyon nuclear power plant. (240)

    The information provided by Scenic Hudson includes descriptions of PG&E's corporate structure, a list of corporate officers and managers, information about the alleged contamination of soil and groundwater near three natural gas compressor stations operated by the Pacific Gas and Electric Company, alleged violations of the federal Clean Air Act at facilities operated by the Pacific Gas and Electric Company, and the litigation associated with property damage claims allegedly caused by inadequate transmission line tree trimming practices by the Pacific Gas and Electric Company.(241)

    Riverkeeper and Scenic Hudson argue that the Department must prevent the violations that allegedly occurred at the facilities operated by the Pacific Gas and Electric Company from occurring at the proposed facility. According to Riverkeeper, the Department should exercise its discretion and deny the requested SPDES permit based on the PG&E Corporation's record of compliance. At the very least, the Department should require a dry cooling tower, which would avoid the need to use the Gunderboom and its related monitoring requirements as currently proposed in the draft SPDES permit.(242)

    In addition, Scenic Hudson argues that the Department should not distinguish between AGC and other PG&E subsidiaries and affiliates in deciding whether to issue the requested SPDES permit. According to Scenic Hudson, there are direct links between the Athens Generating Company, LP, the Pacific Gas and Electric Company and the PG&E Corporation, and the actions of these related companies must be considered.(243) Based on the record of compliance of related PG&E companies, Scenic Hudson contends there is a substantive and significant issue for adjudication that could result in permit denial.(244)

    Scenic Hudson asserts further that its April 5, 2000 motion is timely. According to Scenic Hudson, I raised the record of compliance issue sua sponte at the February 29, 2000 Issues Conference when I directed the Department Staff to review the comments presented at the legislative hearing.(245) In the alternative,(246) Scenic Hudson contends there is good cause for proposing this issue after the date for filing petitions for party status. Scenic Hudson asserts that the information about PG&E's record of compliance was not available until that information was presented at the legislative hearing. According to Scenic Hudson, the intervening time between the legislative hearing and the Issues Conference, which convened the next day, was not sufficient to investigate the topic and present it at the Issues Conference.(247)

    Scenic Hudson also argues that its motion to add PG&E's record of compliance as an issue for adjudication does not prejudice any party for the following reasons. First, Scenic Hudson made its motion before the Department Staff completed its review of the legislative comments and materials presented by the interveners. Second, the ruling on the other issues proposed for adjudication was pending when Scenic Hudson filed its motion.(248)

    AGC asserts that the interveners are attempting to amend their respective petitions for party status by proposing an additional issue for adjudication concerning PG&E's record of compliance. According to AGC, the interveners' proposed issue is late, and the interveners must meet the additional regulatory requirements outlined at §624.5(c). AGC contends that the interveners have not met the additional requirements for late filed petitions, and requests that the proposed issue be dismissed.(249) AGC asserts further that the information presented in the interveners' respective filings concerning PG&E's record of compliance has been available, in most cases, for many months, and, in some cases, for at least a year. AGC asserts that the interveners had sufficient time to access and review this information, and therefore could have proposed the record of compliance issue, in a timely manner, as part of their respective petitions for party status.(250)

    According to AGC, the proposed issue is not substantive and significant for the following reasons.(251) First, AGC asserts that, given PG&E's corporate structure, the alleged environmental violations committed by the Pacific Gas and Electric Company cannot be attributed to the Athens Generating Company, LP, based on the guidance provided in the ROC EGM. AGC contends that the Pacific Gas and Electric Company and its officers do not hold, and have not held, a "substantial interest" in the Athens Generating Company, LP, and that the Pacific Gas and Electric Company's officers have not acted, and will not act, as "high managerial agent(s) or director(s)" of the Athens Generating Company, LP.(252)

    Second, AGC argues that the compliance history of New York facilities that are owned by affiliates of the PG&E Generating Company, LLC, and managed by personnel from the PG&E Generating Company does not trigger a consideration of the ROC EGM for the proposed facility.(253) Third, AGC argues at length that the offer of proof made by the interveners is not sufficient, as required by §624.5(b)(2), related administrative decisions and case law, to raise a substantive and significant issue.(254) Finally, in its letter dated April 7, 2000, AGC provides additional information about the work experiences of some PG&E employees, and their expected roles in managing and operating the proposed facility.(255)

    According to the DEC Staff, the ROC EGM,(256) recommends looking beyond the past behavior of an applicant to examine the conduct of corporate affiliates that may have either a substantial interest in the applicant company, or a common high managerial relationship. The Staff explain that their review included an investigation of the subsidiaries and affiliates of the PG&E Corporation in order to identify the relationships, if any, among the entities identified in Riverkeeper's and Scenic Hudson's papers.(257)

    Based on Staff's investigation,(258)the Pacific Gas and Electric Company does not have, and has not had, either a substantial interest or a common high managerial relationship in the PG&E Generating Company, LLC, and its subsidiaries, the Athens Generating Company, LP and the PG&E Generating Company. The converse is also true, according to the Staff.

    The Staff contend further that the Affiliate Transaction Rules adopted by the California Public Utility Commission(259) expressly prohibit the Pacific Gas and Electric Company from attempting to obtain a substantial interest in the PG&E Generating Company, LLC, and its subsidiaries and affiliates. According to the Staff, the purpose of the Affiliate Rules is to ensure that the resources and assets of the regulated members of a corporate family, like the Pacific Gas and Electric Company, are not used to subsidize or give an unfair competitive advantage to the unregulated affiliates, such as the affiliates of the PG&E Generating Company, LLC. A secondary result of the Affiliate Rules is that the Pacific Gas and Electric Company cannot share any corporate officers or Boards of Directors with either the Athens Generating Company, LP, or the PG&E Company.(260)

    The Staff assert that the Affiliate Rules create a void between the Pacific Gas and Electric Company, and the rest of the PG&E corporate family. Based on the ROC EGM guidelines, the Staff argue that AGC's suitability or fitness to hold a SPDES permit is not a substantive and significant issue for adjudication due to this void. The Department Staff assert further that if a managerial link existed, the ROC EGM guidance does not compel the Department either to deny the requested SPDES permit, or impose additional permit conditions.(261)

    The Staff also assert that the ROC EGM applies to the relationship between AGC and its direct parent, the PG&E Generating Company, LLC, as well as its parent, the PG&E Corporation. According to the Department, the application of the ROC EGM to these relationships requires an assessment of the compliance history of the PG&E Generating Company, LLC, and its subsidiaries and affiliates. After assessing the subsidiaries' and affiliates' records of compliance, the Department Staff concludes that AGC is a suitable company that may obtain and hold a SPDES permit.(262)

    In its reply, Riverkeeper asserts that the Pacific Gas and Electric Company and its holding company, the PG&E Corporation, are essentially the same entity.(263) To support its assertion, Riverkeeper points out that officers and directors of the Pacific Gas and Electric Company are "high managerial agents" of the PG&E Corporation and visa versa.(264) As a result, Riverkeeper contends there is a high managerial connection between the Athens Generating Company, LP, and the Pacific Gas and Electric Company, which in turn demonstrates that the latter has a substantial interest in the former.(265) Since the Athens Generating Company, LP, does not have a record of compliance to review, Riverkeeper asserts that the ROC EGM must be applied to entities further up the PG&E corporate tree.(266)

    Riverkeeper and Scenic Hudson claim that reliance on the Affiliate Rules is misplaced because they do not apply to the unregulated affiliates of the PG&E Generating Company, LLC. Therefore, the Affiliate Rules have no bearing on this case, according to Riverkeeper and Scenic Hudson.(267)

    According to Scenic Hudson, the intermediate, subsidiary companies that separate the PG&E Corporation from the Athens Generating Company, LP, and the PG&E Generating Company should not be regarded as insulating the holding company from its unregulated subsidiaries and affiliates. If these intermediate companies are not considered, Scenic Hudson argues there is a direct line of communication between the PG&E Corporation and the Athens Generating Company, LP. As a result, Scenic Hudson concludes that the PG&E Corporation has a special interest in the Athens Generating Company, LP, and that the Athens Generating Company, LP, shares a high managerial link to the Pacific Gas and Electric Company.(268)

  4. Discussion

    No one disputes the Department's authority to consider an applicant's record of compliance in determining whether to issue an environmental permit. There are questions, however, about whether activities undertaken by subsidiaries of the PG&E Corporation should be considered here, and depending on which activities are considered, whether the draft SPDES permit should be revised or denied.

    1. PG&E's Record of Compliance

      The intervening parties have provided copies of the complaint and consent orders(269) concerning alleged violations at the Pacific Gas and Electric Company's Diablo Canyon nuclear power plant.(270) These enforcement actions were based on alleged violations of §316(b) of the federal Clean Water Act, and premised on the belief that the Pacific Gas and Electric Company purportedly withheld data and other information concerning the potential impacts of the plant's cooling water intake system on the marine environment from 1985 to 1993, which may have resulted in millions of dollars of economic benefits to the utility.(271)

      In addition, Scenic Hudson provided information about the alleged contamination of soil and groundwater near three natural gas compressor stations operated by the Pacific Gas and Electric Company, alleged violations of the federal Clean Air Act at facilities operated by the Pacific Gas and Electric Company,(272) and the litigation associated with property damage claims allegedly caused by inadequate transmission line tree trimming practices by the Pacific Gas and Electric Company.(273)

      With respect to facilities operated in New York, the former US Generating Company(274) operated the East Syracuse electric generating facility from 1993 to 1998. During that period, the Department commenced one enforcement action against the facility for an alleged exceedence of the facility's 3 hour NOx limit. This action was resolved with a consent order(275) that included a civil penalty of $3,000.(276)

      In addition to the East Syracuse facility, the former US Generating Company acquired a facility in Selkirk, NY in 1994, and the PG&E Generating Company presently operates it. To date, the Department has not commenced any enforcement actions against this facility since it was acquired by the PG&E Generating Company's predecessor.(277)

      Within the last ten years, two electric generating facilities located in New Jersey and managed by the PG&E Generating Company have been the subject of enforcement actions that resulted in monetary penalties in excess of $25,000.(278) In June 1997, owners of the Carney's Point Generating Plant(279) entered into an Administrative Action Consent Order with the NJ Department of Environmental Protection to resolve allegations that certain air emission limits had been exceeded between the fourth quarter of 1994 and the fourth quarter of 1996. The civil penalty was $40,000.

      In June 1997, owners of the Logan Generating Plant(280) entered into an Administrative Action Consent Order with the NJ Department of Environmental Protection to resolve allegations that certain air emission limits had been exceeded between the fourth quarter of 1994 and the fourth quarter of 1996. The civil penalty was $35,400.

      To date, no one has identified any other facilities managed by a PG&E corporate subsidiary or affiliate that have been the subject of an enforcement action since April 1990, which resulted in monetary penalties in excess of $25,000. AGC's attorneys assert there are no others.(281)

    2. The ROC EGM

      The ROC EGM is a guidance document that must be applied on a case by case basis.(282) The ROC EGM may be applied to an applicant or permittee as well as to other entities in which the applicant or permittee holds, or has held, a "substantial interest" or has acted as a "high managerial agent or director." The converse situation is also applicable. In other words, an entity's compliance record is relevant if that entity holds, or has held, a "substantial interest" or has acted as a "high managerial agent or director" in the applicant or permittee. The policy defines the terms "substantial interest" and "high managerial agent" with references to ECL §27-1517 and §20.20 of the Penal Law, respectively.(283)

      Activities that may be considered include demonstrated violations of the ECL, its implementing regulations and comparable federal and state statutes and regulations where the actions associated with the violations posed a significant potential threat to the environment or human health, or contributed to a pattern of non-compliance.(284) In addition, conduct that resulted in the reporting of false or inaccurate statements may also be considered.(285)

      Ruling: In determining whether a substantive and significant issue exists, there is a threshold question about which PG&E Corporation subsidiaries and affiliates should be considered here. The basis for making this determination is whether there is, or has been, either a substantial interest or a high managerial relationship.

      Prior to the formation of the holding company (PG&E Corporation) in January 1997, the former US Generating Company, which was created in the late 1980's and which in 1999 became the PG&E Generating Company, was a direct subsidiary of the Pacific Gas and Electric Company.(286) Therefore, I find that the Pacific Gas and Electric Company had a substantial interest in and a high managerial connection to the US Generating Company from the creation of the US Generating Company in the late 1980's to January 1997.(287)

      After the formation of the holding company in January 1997, the substantial interest and high managerial connection that the Pacific Gas and Electric Company had in the US Generating Company ceased. Consequently, I conclude that activities of the Pacific Gas and Electric Company since January 1997 are not relevant here. I base this conclusion, in part, on the Affiliate Rules, which as a matter of law, rather than by any corporate policy, would keep the interests and management of the regulated and unregulated subsidiary companies within the PG&E Corporation separate.

      There are striking parallels between Pacific Gas and Electric's Diablo Canyon facility and the proposed facility that cannot be discounted, regardless of whether the Pacific Gas and Electric Company had a substantial interest in, or high managerial connection with the former US Generating Company (now known as the PG&E Generating Company). For example, the Diablo Canyon facility was required to comply with §316(b) of the federal Clean Water Act, as will the proposed AGC facility. The Diablo Canyon facility was required to undertake extensive monitoring and to report the results of that monitoring truthfully and accurately. The proposed AGC facility would also have similar requirements. Although Pacific Gas and Electric did not admit that it violated CWA §316(b), inaccurately reported the results of its monitoring studies, or mislead regulatory agencies, it did agree to pay a civil penalty of $14 million. Despite these apparent factual similarities, I find it inappropriate to make any determinations about the truthfulness of the allegations in the Complaint(288) concerning the Diablo Canyon facility in light of the "non-admission" clauses in the consent orders.(289)

      I concur with the Department Staff that the records of compliance of the subsidiaries and affiliates of the PG&E Generating Company, LLC, are also relevant. The relevant subsidiaries and affiliates include the formerly owned East Syracuse facility, the Selkirk facility and two facilities in New Jersey. As previously mentioned, the only enforcement action against the East Syracuse facility, during the period it was managed by the former US Generating Company, was resolved with a consent order that included a civil penalty of $3,000. I find that this action is not significant based on the ROC EGM, which recommends a consideration of matters that resulted in monetary penalties in excess of $25,000.(290)

      To date, no enforcement actions have been commenced against the Selkirk facility. Based on this facility's record of compliance, it can be reasonably inferred that activities at this facility would continue to be carried out in a responsible manner.(291) I find this inference to be very significant, as discussed further below.

      Based on the Staff's review, the events at the New Jersey facilities are not significant. According to the Staff, these incidents do not require further consideration, and therefore, do not warrant a modification of the conditions currently proposed in the draft SPDES permit. I agree.

      I find that the absence of a substantial interest or a common managerial relationship between the Pacific Gas and Electric Company, and the affiliates and subsidiaries of the PG&E Generating Company, LLC, since 1997 somewhat tempers the gravity of the alleged events at the Diablo Canyon facility with respect to the proposed facility. In addition, the record of compliance for the PG&E Generating Company, LLC, affiliates in New York and New Jersey, as discussed above, has been good even when the former US Generating Company was a direct subsidiary of the Pacific Gas and Electric Company. I afford substantial weight to the positive circumstances given the prior administrative determinations where the Commissioner has held that it tends to be the local business management team, rather than the isolated record of a parent or other affiliate, that will ultimately determine the conduct of the local applicant.(292)

      Therefore, I find that the positive records of compliance of the former and current PG&E Generating Company, LLC, affiliates in New York and NJ, on balance, out weigh the negative circumstances associated with the Diablo Canyon facility. Accordingly, I conclude that additional inquiry into this proposed issue would not substantially develop the record further. Therefore, further adjudication of this issue is not necessary as it would not lead to modification of the draft SPDES permit as currently proposed, or permit denial.

      Having addressed the merits of the proposed issue, the question of whether the interveners satisfied the procedural requirements outlined in §624.5(c) regarding late filed petitions does not need to be considered.

AGC's Request for Sanctions

In the last section of its response, AGC requests that I deny the interveners' respective requests for party status for two reasons. First, AGC claims that Riverkeeper and Scenic Hudson did not comply with the directives that I made at the Issues Conference concerning the review of legislative comments related to the Pacific Gas and Electric Company's record of compliance. Second, AGC alleges that Riverkeeper and Scenic Hudson did not "exercise good care and due diligence" in researching and proposing the record of compliance issue. According to AGC, Riverkeeper's and Scenic Hudson's baseless claims concerning the proposed record of compliance issue have disrupted the proceeding and prejudiced the Applicant.(293)

Riverkeeper objects to AGC's motion to deny it party status. According to Riverkeeper, AGC's assertions related to this motion are unfounded and lack a legal basis.(294) Riverkeeper asserts further that its actions were proper, and therefore do not warrant denial of party status. (295)

Discussion and ruling: The primary purpose of the proceeding is to determine whether there are any substantive and significant issues of fact for adjudication, which must be resolved to make a final decision about the requested SPDES permit. I deny AGC's request because making any findings about whether participants have followed my instructions, or have otherwise behaved in anything less than a professional manner unnecessarily detracts from the primary purpose of this proceeding.

I have been attending and presiding at proceedings concerning this proposed electric generating facility since November 9, 1998. The parties and their respective counsel have, without exception, conducted themselves in a courteous and profession manner. I expect that such behavior will continue until this and the related PSL proceedings are concluded.

Appeals

A ruling of the ALJ 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 Commissioner on an expedited basis.(296) Ordinarily, expedited appeals must be filed to the Commissioner in writing within five days of the disputed ruling.(297)

Allowing extra time due to the length of these rulings, any appeals must be received by the Commissioner (Office of the Commissioner, NYS Department of Environmental Conservation, 50 Wolf Road, Albany, New York, 12233-1010) before 2 p.m. on May 4, 2000. Any replies to any appeals must be received before 2 p.m. on May 10, 2000.

Send three copies of any appeal and reply to the Administrative Law Judge. Participants who use word processing equipment to prepare the brief and reply must also submit a copy of their appeal and reply to the ALJ in electronic form on a 3.5 computer disk (double density, not high density) formatted in either WordPerfect or ASCII. Alternatively, parties may file an electronic copy via e-mail at dpoconne@gw.dec.state.ny.us.

The parties shall ensure that transmittal of all papers is made to the ALJ and all others on the service list at the same time and in the same manner as transmittal is made to the Commissioner. No submissions by telecopier will be allowed or accepted.

Appeals should address the ALJ's rulings directly, rather than merely restate a party's contentions.

/s/
By: Daniel P. O'Connell
Administrative Law Judge

Dated: April 26, 2000
Albany, New York

To: Attached Service List dated March 2, 2000

Attachment: Appendix A, PG&E Organization Chart.

1. See Department of Public Service Case No. 97-F-1563 in the Matter of an Application by Athens Generating Company, LP, for a Certificate of Environmental Compatibility and Public Need to Construct and Operation a 1080 megawatt natural gas-fired combined cycle combustion turbine generating plant in the Town of Athens, Greene County.

2. 6 NYCRR §624.5(b)(2)(i).

3. §624.5(b)(1)(ii).

4. §624.4(c)(4).

5. §624.4(c)(2). Matter of Superintendent of Fish Culture, Interim Decision,

August 19, 1999, which was affirmed in the Decision and Judgment In the Matter of Upper Saranac Lake Association, Inc., et al. v. John P. Cahill, Commissioner, et al., (Supreme Court, Albany Co., Index No. 6027-99), March 24, 2000.

6. Matter of Concerned Citizens Against Crossgates v. Flacke, 89 AD2d 759 (3rd Dep't., 1982), aff'd, 58 NY2d 919 (1983).

7. Matter of Oneida County Energy Recovery Facility, Interim Decision, July 27, 1982; Matter of Halfmoon Water Improvement Area, Interim Decision, April 2, 1982; Matter of Broome County Department of Public Works, Commissioner's Decision, June 11, 1984.

8. §624.4(c)(3).

9. 6 NYCRR Part 621 (Uniform Procedures).

10. 6 NYCRR Part 624 (Permit Hearing Procedures).

11. PSL §172; ECL §17-80823 and §17-0701(8).

12. ECL Article 70, and 6 NYCRR Part 621.

13. PSL §167, §172.

14. PSL §167(1).

15. PSL §167(1)(a).

16. Riverkeeper's Petition for Full Party Status, pp.22-29.

17. Scenic Hudson's Petition for Full Party Status, pp. 34-38.

18. Riverkeeper's Petition for Full Party Status, p. 28.

19. Scenic Hudson's Petition for Full Party Status, p. 15.

20. §624.4(c).

21. See, PSL §167(1). The record of the related PSL Article X matter includes 6,560 pages of transcript and 366 exhibits collected during 18 days of hearing.

22. §621.3(e), and §624.8(e).

23. Scenic Hudson's Petition for Full Party Status, p. 38; Issues Conference Tr. 35.

24. Superintendent of Fish Culture, supra.; Akzo, supra.

25. Scenic Hudson's Petition for Full Party Status, pp. 5-11

26. Ibid.

27. Scenic Hudson's Reply Petition for Full Party Status, pp. 1-8.

28. AGC's Initial Response, pp. 8-10.

29. DEC Staff's Response, pp. 8-9.

30. ECL Article 70, and §621.5.

31. §624.4(c)(7) which refers to §621.15(b).

32. DEC Staff's Initial Response, pp. 8-9.

33. DEC Staff's Initial Response, pp. 8-9; Issues Conference Tr. 152-154.

34. Division of Water Technical and Operation Guidance Series (TOGS) 1.2.1,

Industrial SPDES Permit Drafting Strategy for Surface Waters, May 19, 1987.

35. Scenic Hudson's Petition for Full Party Status, pp. 18-20.

36. Ibid.

37. Issues Conference Tr. 92-95; DEC Staff's Response, pp. 14-16.

38. Draft SPDES Permit, page 8 of 19.

39. Additional Requirement 1(18)(c).

40. Additional Requirement (1)(18)(b).

41. AGC's Initial Response, pp. 19-20.

42. Akzo, supra.

43. AGC's Initial Response, p. 21.

44. DEC Staff's Response, p. 16.

45. Scenic Hudson's Reply Petition for Full Party Status, pp. 10-14.

46. PSL Article X Exh. 288.

47. Hereafter, the 1988 design standards.

48. Scenic Hudson's Petition for Full Party Status, pp. 20-22.

49. Ibid.; Scenic Hudson's Reply Petition for Full Party Status, pp. 16-17 and Attachment B.

50. AGC's Initial Response, pp. 29-30.

51. DEC Staff's Response, pp. 17-18.

52. Mr. Roberts' comments were attached as Attachment D to Scenic Hudson's Petition for Full Party Status, and as Attachment B to Scenic Hudson's Reply Petition for Full Party Status.

53. Scenic Hudson's Petition for Full Party Status, pp. 23-25.

54. DEC Permit No. GP-93-06.

55. DEC Permit No. GP-98-03.

56. AGC's Initial Response, pp. 26-28.

57. Ibid., pp. 28-29.

58. DEC Staff's Response, pp. 19-21.

59. Attachment D to Scenic Hudson's Petition for Full Party Status, and Attachment B to Scenic Hudson's Reply Petition for Full Party Status.

60. See, §624.5(b)(2)(ii), and Giardina, supra.

61. Riverkeeper's Petition for Full Party Status, pp. 14-16; Riverkeeper's Reply Petition for Full Party Status, pp. 5-6.

62. Riverkeeper's Petition for Full Party Status, p. 6; Riverkeeper's Reply Petition for Full Party Status, p. 3; Scenic Hudson's Petition for Full Party Status, p. 12.

63. Hereafter, the 1999 Gunderboom Evaluation Report.

64. Scenic Hudson's Reply Petition for Full Party Status, p. 9.

65. AGC's Initial Response, pp. 2-4; 10-12.

66. AGC's March 10, 2000 Letter Response, pp. 4-6 and Attachment 1.

67. Ibid., and Attachment 2.

68. Edward W. Radle has been employed at the NYS Department of Environmental Conservation since 1978 and currently holds the position of Biologist II (Aquatic) in the Department's Division of Fish, Wildlife and Marine Resources. Mr. Radle's work experience includes evaluating applications filed by electric generating facilities (former PSL Article VIII and Article X) for compliance with federal and state requirements for SPDES permits, including compliance with §316(b) of the federal Clean Water Act and 6 NYCRR §704.5 (Tr. 2,233-2,234). Mr. Radle testified in the related PSL Article X hearing for the DEC Staff.

69. DEC Staff's Response, p. 5, and Attachment A.

70. CWA §316(b) and 6 NYCRR §704.5 also identify "construction" as another element to be considered in determining the best technology available. The construction of the proposed cooling water intake structure on fisheries resources is not at issue here.

71. The following is a list of the briefs filed by Riverkeeper, Scenic Hudson, AGC and the DEC Staff in the related PSL Article X proceeding in which these parties presented arguments concerning BTA. The documents are listed in reverse chronological order.

  1. Scenic Hudson's Letter dated February 16, 2000 in lieu of a Supplemental Reply Brief, pp. 1-4; DEC Staff's Supplemental Reply Brief dated February 16, 2000, pp. 4-13; AGC's Supplemental Reply Brief dated February 16, 2000, pp. 3-34; Riverkeeper did not file a Supplemental Reply Brief or a letter in lieu thereof.
  2. Riverkeeper's Initial Supplemental Brief dated February 9, 2000, pp. 1-16; Scenic Hudson's Supplemental Brief dated February 10, 2000, pp. 1-14; DEC Staff's Supplemental Initial Brief dated February 10, 2000, pp. 8-20; AGC's Supplemental Brief dated February 10, 2000, pp. 4-22.
  3. Riverkeeper's Letter dated October 8, 1999 in lieu of a Brief Opposing Exceptions; Scenic Hudson's Reply Brief on Exceptions dated October 12, 1999, pp. 3-4; DEC Staff's Letter dated October 8, 1999 in lieu of a Reply Brief on Exceptions; AGC's Brief Opposing Exceptions dated October 12, 1999, pp. 31-45.
  4. Riverkeeper's Brief on Exceptions dated September 25, 1999, pp. 17-39; Scenic Hudson's Brief on Exceptions dated September 27, 1999, pp. 27-33; DEC Staff's Brief on Exceptions dated September 24, 1999, pp. 3-12; Although AGC filed a Brief on Exceptions dated September 27, 1999, the brief does not include any arguments related to BTA.
  5. Scenic Hudson's Reply Brief dated July 14, 1999, pp. 10-11; DEC Staff's Reply Brief dated July 14, 1999, pp. 2-5; AGC's Reply Brief dated July 14, 1999, pp. 32-74; Riverkeeper did not file a Reply Brief or a letter in lieu thereof.
  6. Riverkeeper's Initial Post Hearing Brief dated June 28, 1999, pp. 11-21; Scenic Hudson's Initial Brief dated June 29, 1999, pp. 28-31; DEC Staff's Initial Post Hearing Brief dated June 28, 1999, pp. 20-35; AGC's Initial Post Hearing Brief dated May 21, 1999, pp. 33-41, 53-55, 60-65, 100-109.

72. The pumphouse would be a small building about 45 feet long, 25 feet wide and 20 feet high.

73. PSL Article X Exh. 19, §2.4.3.

74. PSL Article X Exhibit 19, §2.4.3. The average daily water usage is based on the use of natural gas at ten cycles of concentration, and the assumption that the average annual ambient temperature is 48°F. The maximum usage is based on firing fuel oil at 88°F, and five cycles of concentration.

75. PSL Article X Exh. 19, §2.4.3 and Fig. 2-11.

76. Issues Conference Exhibit 2C, Draft SPDES Permit, Additional Requirements 1(19).

77. PSL Article X Exh. 19, App. D-6 (Mixing Zone Evaluation for Proposed Discharge at Athens, New York).

78. PSL Article X Exh. 19, Appendix D-6.

79. 33 USC §1326.

80. 41 Federal Register 17,387-17,390 (April 26, 1976). Hereafter, the 1976 EPA Development Document.

81. Appalachian Power Co. v. Train, 566 F2d 451 (4th Cir. 1977).

82. 1976 EPA Development Document, pp. 175-176.

83. PSL Article X Exh. 95, paragraph 3.

84. Ibid., paragraph 11. The "wholly disproportionate" standard is addressed further below.

85. Id., paragraph 6.

86. In re Brunswick Steam Electric Plant, Region 4, EPA (Nov. 7, 1977) Initial Decision re: Permit No. NC007064 [hereafter, Brunswick]; In re Public Service Company of New Hampshire, 10 ERC 1257 (1977) [hereafter, Seabrook], petition for review dismissed, Seacoast Anti-Pollution League v. Costle, 597 F2d 306 (1st Cir. 1979) [hereafter, Seacoast]. Based on Seabrook, EPA has interpreted the term, "cooling water intake structure" broadly to include all structures and components which are integral to the intake system (Seabrook, supra., p. 1,262).

87. Brunswick, supra.

88. Permits Division, Office of Waste Enforcement, EPA, Guidance for Evaluating the Adverse Impact of Cooling Water Intake Structures on the Aquatic Environment: Section 316(b) PL 92-500 (Draft 1977).

89. Hudson Riverkeeper Fund, Inc. v. Orange & Rockland Utilities, Inc., 835 F. Supp. 160, 166 (SDNY 1993).

90. 1976 EPA Development Document, p. 178.

91. Brunswick, supra.

92. 1976 EPA Development Document, pp. 175-176.

93. Ibid., p. 145.

94. Brunswick, supra.

95. Hudson Riverkeeper Fund, supra., p. 166.

96. The former federal regulations attempted to address the issue of cost/benefit analysis. The regulations stated that "no comparison of monetary cost with the social benefits at minimizing adverse impacts, much less formal quantified 'cost/benefit' assessment is required." However, EPA noted that the application of best technology available "should not impose an impracticable and unbearable economic burden on the operation of any plant subject to Section 316(b)." Therefore, EPA concluded that "consideration of the economic practicability of installing that technology must be conducted on a similarly individualized basis ." [41 Federal Register, 17,388 (1976)].

97. Seabrook, supra.

98. Ibid. p, 1261.

99. Seacoast, supra.

100. Ibid., p. 311.

101. Id.

102. Seabrook, supra., p. 1,261.

103. See, PSL Article X Exh. 19, Appendix A, Stipulation No. 2.

104. PSL Article X Exh. 19, Table 5-3.

105. The conditional mortality rate (CMR) is the percentage of mortality of a population due to the cause in question, excluding other causes of mortality.

106. PSL Article X Exh. 19, pp. 5-16 - 5-18. Although Stipulation No. 2 specified that modeling only for 1990-1995 would be required, the ETM was used with data for the entire 15-year period of available Estuary Monitoring Program data, for added comprehensiveness.

107. Ibid., pp. 5-18.

108. Scenic Hudson's Brief on Exceptions, p. 28, citing the transcript from the related PSL Article X hearing Tr. 2,236 (Mr. Radle) and 2,682-2,683 (Mr. Schultz). The testimony at Tr. 2,236 does not support Scenic Hudson's claim. Mr. Radle's testimony there says AGC's fish mortality data are conservative. The other citations are accurate.

109. 7.5 - 4.2 = 3.3 (3.3 ÷ 7.5)(100) = 44%

110. Tr. 4,536. This does not account for the fact that when the dry sections of the hybrid cooling system are operating, water usage would be reduced over wet by 470,000 gpd at maximum operating conditions. Tr. 4,710.

111. Indeed, Mr. Huddleston does not deny the existence of this process, (Tr. 3,269-3,270), and Mr. Radle acknowledged it (Tr. 2,247).

112. Tr. 2,236-2,239 and 2,277 (Mr. Radle).

113. 19 NYCRR §602.5. The pumphouse would also be in the coastal zone, but there is no debate about its environmental effects. See the Recommended Decision in the related PSL Article X matter (R.D.), p. 140, for a further discussion of CMP Policy 7.

114. DEC's Letter in Lieu of a Brief Opposing Exceptions, p. 2.

115. Tr. 2,343-2,344.

116. Shad are fish that live at sea and spawn in about 12 freshwater rivers in the east, including the Hudson. Nearly all shad (97%) return to the river of their origin to spawn. Detailed information on shad is included in the application (Ex. 19, pp. 5-6) and in Dr. Schultz's testimony (Tr. 2,677).

117. Scenic Hudson's Brief on Exceptions, p. 30, citing Tr. 2,475 (Dr. Englert), 2,239 and 2,246 (Mr. Radle), and 2,680-2,681 (Dr. Schultz).

118. R.D., pp. 169-171.

119. Tr. 6,291.

120. Tr. 6,294; 6,297.

121. Tr. 6,215-6,216; 6,298.

122. Tr. 6,334-6,335.

123. Tr. 6,401.

124. Tr. 6,335.

125. Tr. 6,241; 6,321; 6,323; 6,521.

126. Tr. 6,206-6,207 and 6,066-6,069.

127. Tr. 6,068-6,069; 6,082, and 6,142-6,143.

128. Tr. 6,206-6,207.

129. Riverkeeper's Supplemental Initial Brief, p. 10. Scenic Hudson's Supplemental Initial Brief, pp. 1, 9-10.

130. Tr. 6,521.

131. Riverkeeper's Supplemental Initial Brief, pp.12, 14.

132. Scenic Hudson's Supplemental Initial Brief, p.12.

133. AGC's Supplemental Reply Brief, p. 7. DEC agrees: DEC's Supplemental Reply Brief, pp. 8-9.

134. Tr. 6,206; 6,247.

135. Tr. 6,247.

136. Tr. 6,231-6,234.

137. Tr. 6,226-6,227.

138. AGC witness, Dr. Englert, is a member of this firm, although he did not develop or participate in these studies.

139. PSL Article X Exh. 363. When the related PSL Article X remand hearings convened on January 26 and 27, 2000, the report remained in draft form. Now, it is alternatively referred to as Attachment 3 to Lovett Generating Station Gunderboom Evaluation Program 1999, (February 2000). The content of the final version of the impingement report compared to the draft is essentially the same.

140. Tr. 6,069; 6,083-6,084; 6,208.

141. Tr. 6,207.

142. Tr. 6,525.

143. Tr. 6,534.

144. American Public Health Association, American Water Works Association and Water Environment Federation (20th Edition, 1998) pp. 8-16 and 8-17.

145. Tr. 6,534.

146. Tr. 6,534.

147. Riverkeeper's Supplemental Initial Brief, p. 16.

148. AGC's Supplemental Reply Brief, p. 14.

149. Tr. 6,220; 6,365 and 6,380. See also AGC's Supplemental Reply Brief, p. 13-15.

150. PSL Article X Exh. 363.

151. Tr. 6,380-6,383. The design flow rate for the Gunderboom at Athens is only 3.4 mm per second, considerably lower than the 1,500mm per second associated with use of the 2 mm wedge-wire screen alone. Mr. Radle demonstrated that the theoretical swimming speed of newly hatched larvae of all relevant species exceeds the design flow rate of the Gunderboom, and DEC Staff argues the theory is born out by the observation of larvae swimming away from the Gunderboom during the test, even at twice the design flow rate. (DEC's Supplemental Initial Brief, p. 16.)

152. Tr. 6,381.

153. Tr. 6,248-6,249.

154. PSL Article X Exh. 363.

155. Tr. 6,407

156. PSL Article X Exh. 19, Appendix E-2, Chapter 4.

157. Ibid.

158. Id.

159. PSL Article X Exh. 363.

160. The record is unclear as to whether eggs with adhesive qualities would be easily freed by the air-backwash. Regardless, evidence shows that, because of their adhesive qualities, such eggs would generally not tend to be free floating in the river and come in contact with the fabric surface. Radle, at Tr. 6,408.

161. Riverkeeper's Supplemental Initial Brief, pp. 10-18, and Scenic Hudson's Supplemental Initial Brief, pp. 9-13.

162. Tr. 6,217; 6,360-6,361.

163. Tr. 6,217.

164. Brunswick, supra.

165. Scenic Hudson's Brief on Exceptions, pp. 30-31.

166. Scenic Hudson's Supplemental Initial Brief, p. 2.

167. PSL Article X Exh. 353. See Scenic Hudson's Supplemental Initial Brief, p. 2.

168. PSL Article X Exh. 353. The opportunity costs are lost revenues included in an "output penalty" (for a performance loss) and "heat rate penalty" (for an efficiency cost related to higher fuel usage).

169. Multii-Area Production Cost Simulation.

170. Scenic Hudson's Supplemental Initial Brief, p. 4.

171. Scenic Hudson's Supplemental Initial Brief, pp. 2-7.

172. Riverkeeper's Supplemental Initial Brief, pp. 4-7.

173. AGC's Supplemental Initial Brief, pp. 5-6.

174. Tr. 6,182.

175. DEC Staff's Initial Brief, p. 32.

176. PSL Article X Exh. 353.

177. Scenic Hudson's Supplemental Initial Brief, pp. 8-9.

178. DPS Staff's Initial Supplemental Brief, p. 2; PSL Article X Exhs. 185, 359, 310; Tr. 6,171.

179. Although the draft SPDES permit does not expressly require a hybrid cooling system for the proposed facility, it limits the capacity of the cooling water intake structure to 4.2 mgd on average, not to exceed a maximum of 7.5 mgd (Issues Conference Exh. 2C, Additional Requirements 1(1)(d), page 6 of 19). These capacity limits on the cooling water intake structures are consistent with the amount of water required for a hybrid cooling system. Agencies may not specify cooling systems per se at a given facility because cooling systems are not cooling water intake structures (In Re: Brunswick Steam Electric Plant, Decision of the General Counsel, June 1, 1976 [EPA GCO 41]).

180. Issues Conference Exh. 2C, Additional Requirements 1(19).

181. 33 USC §1313(d)(4)(B); Implementing regulations at 40 CFR Part 131.

182. 33 USC §1326.

183. 40 CFR §131.12.

184. Riverkeeper's Petition for Full Party Status, p. 17; Scenic Hudson's Petition for Full Party Status, pp. 25-26.

185. Riverkeeper's Reply Petition for Full Party Status, p. 10.

186. Issues Conference Tr. 56; Riverkeeper's Reply Petition for Full Party Status, p. 8.

187. Riverkeeper's Petition for Full Party Status, p. 17, 21; Scenic Hudson's Petition for Full Party Status, p. 25.

188. §617.5(c)(35).

189. §617.9(b)(5)(i) and §617.11(d)(2). Compare at 40 CFR §131.12(a)(2).

190. Scenic Hudson's Petition for Full Party Status, p. 26.

191. Ibid., p. 32.

192. Riverkeeper's Petition for Full Party Status, pp. 18-19.

193. Ibid., pp. 21-22.

194. Scenic Hudson's Petition for Full Party Status, p. 27.

195. AGC's Initial Response, pp. 5-6.

196. Ibid., p. 7.

197. Ibid., pp. 7-8.

198. DEC Staff's Response, pp. 10-11.

199. Riverkeeper's Reply Petition for Full Party Status, pp. 14-15.

200. Scenic Hudson's Reply Petition for Full Party Status, pp. 31-32.

201. AGC's March 10, 2000 Letter Response, pp. 1-4.

202. PUD No. 1 v. Washington Dept. of Ecology, 114 SCt 1900, 1912 and 1914 (1994).

203. Riverkeeper's Petition for Full Party Status, p. 19; Riverkeeper's Reply Petition for Full Party Status, pp. 7-10.

204. R. D., pp. 142.

205. R. D., pp. 150 and 157.

206. Ruling Modifying Issues List, issued December 16, 1998 in the related PSL Article X case.

207. Tr. 3,702 - 3,710.

208. Scenic Hudson's Petition for Full Party Status, pp. 28, 31-32.

209. Save the Pine Bush v. City of Albany, 70 NY2d 193, 206 (1987); Freedman v. Adirondack Park Agency, 165 AD2d 33, 36 (3rd Dept. 1991, app. den., 78 NY2d 853 (1991).

210. Scenic Hudson's Petition for Full Party Status, p. 29 citing Dudley Road Association, 214 AD2d 274, 280 (3rd Dept. 1995, app. dism'd. 87 NY2d 952 (1996); Freidman, supra at 37; West Village Committee v. Zagata, 171 M2d 454, 459-460 (Sup. Ct. Alb. Co. 1996), rev'd. in part on other grounds, 242 AD2d 91 (3rd Dept. 1998), app. den. 92 NY 2d 802 (1998); McKinney's Practice Commentaries to ECL §8-0111.

211. Scenic Hudson's Petition for Full Party Status, pp. 30, 32-33.

212. All three proposed witnesses testified at the related PSL Article X hearing.

213. §617.5(c)(35).

214. AGC's Initial Response, pp. 12-17.

215. Issues Conference Tr. 67, 80-81.

216. PSL §165(1).

217. DEC Staff's Response, pp. 12-13.

218. ECL §8-0111(5)(b).

219. McKinney's Practice Commentaries to ECL §8-0111. See PLS §164(1)(b).

220. Gerrard, Ruzow and Weinberg. (1995) Environmental Impact Review in New York, §5.10(4)(c) [pp. 5-62 - 5-63].

221. In addition, determinations about whether to grant air emissions permits pursuant to the federal Clean Air Act are dependent upon the results of AGC's air modeling analyses. These analyses require a consideration of existing air quality conditions to determine whether the addition of the expected emissions from the proposed facility would comply with ambient air quality standards.

222. Issues Conference Tr. 184-187. See also §624.4(a)(4).

223. Riverkeeper's Reply Petition for Full Party Status, p. 23.

224. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance.

225. Hereafter, AGC's April 7, 2000 Response.

226. Hereafter, DEC Staff's April 10, 2000 Response.

227. Scenic Hudson's April 14, 2000 Reply Memorandum.

228. Riverkeeper's April 13, 2000 Reply Memorandum.

229. AGC's April 13, 2000 Letter Reply.

230. As explained further below, the US Generating Company became the PG&E Generating Company in 1999.

231. Riverkeeper's April 13, 2000 Reply Memorandum, p. 6; Scenic Hudson's April 14, 2000 Reply Memorandum, p. 4.

232. Scenic Hudson's April 14, 2000 Reply Memorandum, Attachment F.

233. As explained further below, there is a distinction between the PG&E Generating Company, LLC, and the PG&E Generating Company, formerly known as the US Generating Company. See Appendix A to the Issues Ruling.

234. AGC's April 7, 2000 Response, pp. 7-9 and Attachments A and B; DEC Staff's April 10, 2000 Response, pp. 8, 9, 12 and Attachment B.

235. Ibid.

236. Id.

237. Id.

238. Riverkeeper's Reply Petition for Full Party Status, pp. 23-24, and Attachment G.

239. People of the State of California v. Pacific Gas and Electric Company, Civil No. C-97-1941-MHP and United States of America v. Pacific Gas and Electric Company, Civil No. C-97-1969-MHP.

240. Riverkeeper's Reply Petition for Full Party Status, p. 24 and Attachment H.

241. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, Attachments A through W.

242. Riverkeeper's Reply Petition for Full Party Status, p. 25; Riverkeeper's April 13, 2000 Reply Memorandum, pp. 4-5, 11; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 24-26.

243. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, pp. 4-5; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 7-9.

244. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, pp. 14-15; Scenic Hudson's April 5, 2000 Motion, p. 2; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 2-3.

245. Scenic Hudson's April 5, 2000 Motion, p. 2.

246. See §624.5(c).

247. Scenic Hudson's April 5, 2000 Motion, p. 3; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 27-28.

248. Scenic Hudson's April 5, 2000 Motion, p. 4; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 27-28.

249. AGC's April 7, 2000 Response, pp. 2-3.

250. Ibid., pp. 4-5.

251. Id., pp. 5-6.

252. Id., p. 10, citing ROC EMG, p. 5.

253. Id., pp. 10-11, and Attachment A.

254. Id., pp. 11- 14.

255. Also see AGC's April 13, 2000 Letter Reply.

256. ROC EGM, p. 5.

257. DEC Staff's April 10, 2000 Response, pp. 1-2.

258. Ibid., pp. 8-11.

259. Appendix A to DEC Staff's April 7, 2000 Response. Hereafter, the Affiliate Rules.

260. DEC Staff's April 7, 2000 Response, pp. 8-11.

261. Ibid., p. 3.

262. Id.

263. Riverkeeper's April 13, 2000 Reply Memorandum, p. 4.

264. Ibid., p. 7.

265. Id., pp. 7-8.

266. Id., p. 8.

267. Riverkeeper's April 13, 2000 Reply Memorandum, pp. 9-10; Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 20-21.

268. Scenic Hudson's April 14, 2000 Reply Memorandum, pp. 4-10, 12.

269. People of the State of California v. Pacific Gas and Electric Company, Civil

No. C-97-1941-MHP and United States of America v. Pacific Gas and Electric Company, Civil No. C-97-1969-MHP.

270. Riverkeeper's Reply Petition for Full Party Status, p. 24 and Attachment H; Riverkeeper's April 13, 2000 Response, Attachment A; Scenic Hudson's March 17 Memorandum on Applicant's Record of Compliance, Attachments G and H.

271. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, Attachment G, paragraphs 45 and 50.

272. By letter dated March 30, 2000, Scenic Hudson provided information concerning "PG&E's Pittsburg, California plant" and a list of air alleged quality violations at this facility from the past 10 years. From the letter and its attachments, it is not clear whether this facility is operated by the Pacific Gas and Electric Company or by an affiliate of the PG&E Generating Company, LLC.

273. Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance.

274. The US Generating Company became the PG&E Company in 1999.

275. Consent Order No. R7-2064-99-04.

276. AGC's April 7, 2000 Response, p. 10; DEC Staff's April 10, 2000 Response, p. 15.

277. DEC Staff's April 10, 2000 Response, p. 15.

278. AGC's letter dated April 7, 2000, p. 6 and Attachments 1 and 2.

279. This facility is owned by Chambers Cogeneration, LP and managed by the PG&E Generating Company. It is located in Carney's Point, NJ.

280. The Logan Generating Plant is owned by the Logan Generating Company, LP and managed by the PG&E Generating Company. It is located in Logan, NJ.

281. AGC's April 13, 2000 Letter Reply, p. 2.

282. ROC EGM, p. 1.

283. ROC EGM, p. 5.

284. ROC EGM, pp. 4-5.

285. ROC EGM, p. 5.

286. Scenic Hudson's April 14, 2000 Reply Memorandum, p. 4 and Attachment B.

287. Appendix A. See the notes for the US Generating Company.

288. Riverkeeper's Reply Petition for Full Party Status, Attachment H; Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, Attachment G.

289. Riverkeeper's Reply Petition for Full Party Status, Attachment H, p. 3, lines 8-11; Scenic Hudson's March 17, 2000 Memorandum on Applicant's Record of Compliance, Attachment H, p. 3, lines 8-11.

290. ROC EGM, p. 6.

291. ROC EGM, p. 1.

292. Republic Environmental Systems (New York), Commissioner's Interim Decision and Order, December 29, 1993; Matter of CECOS International, Inc., Commissioner's Decision, March 12, 1990.

293. AGC's April 7, 2000 Response, pp. 14 and 18.

294. Riverkeeper's April 13, 2000 Reply Memorandum, p. 13-15.

295. Id.

296. §624.8(d)(2).

297. §624.6(e)(1).

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