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Besicorp-Empire Development Company, LLC - Commissioner Interim Decision, August 22, 2003

Commissioner Interim Decision, August 22, 2003

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
625 Broadway
Albany, New York 12233-1010

In the Matter

- of -

the Application of Besicorp-Empire Development Company, LLC for a Part 201 Air
State Facility Permit; a State Pollutant Discharge Elimination System (SPDES)
Permit; a Title IV Acid Rain Permit; a Water Quality Certification; a
Construction Stormwater SPDES Permit; and an Excavation and Fill Navigable
Waters Permit


Case No. 4-3814-00052/00001 - 00006


INTERIM DECISION OF THE COMMISSIONER

August 22, 2003

INTERIM DECISION OF THE COMMISSIONER

In this joint Public Service Law article X and New York State Department of Environmental Conservation ("DEC" or "Department") permit hearing proceeding, intervenor City of Rensselaer (the "City") appeals from the Hearing Examiners' ruling specifying Article X and DEC issues for adjudication. The sole issue on this appeal pursuant to 6 NYCRR 624.8(d)(2) is whether the DEC Administrative Law Judge ("DEC ALJ") erred in holding that issues related to the on-going remediation of the project site, which contains both a class 2 and class 3 inactive hazardous waste disposal site, are not adjudicable in the DEC permit hearing proceeding. For the reasons that follow, the DEC ALJ's ruling is affirmed.

Project Description

Applicant Besicorp-Empire Development Company, LLC, proposes to construct and operate a project known as the Empire State Newsprint Project. The project would consist of a recycled newsprint manufacturing plant and a nominal 505 megawatt (MW) combined cycle cogeneration plant. The site of the proposed project is in the City of Rensselaer at the former industrial manufacturing site currently owned by BASF. The proposed project is subject to several State approvals. The newsprint plant requires a number of DEC permits. In addition, DEC is the lead agency for State Environmental Quality Review Act ("SEQRA") review of the newsprint plant. DEC is also responsible for issuing certain federally delegated air and water pollution permits for the cogeneration plant. The cogeneration plant is otherwise subject to Public Service Law article X review by the New York State Board on Electric Generation Siting and the Environment (the "Siting Board").

Besicorp proposes to construct the newsprint plant on an approximately 41-acre parcel, known as the "Main Plant" property, currently owned by BASF. The Main Plant property is listed on DEC's Registry of Inactive Hazardous Waste Disposal Sites as a class 2 site (significant threat to the public health or environment -- action required [ECL 27-1305(4)(b)(2)]) and is the subject of on-going remediation efforts. DEC and BASF entered into a Remedial Investigation/Feasibility Study Order on Consent in 1998. In February 2003, DEC issued a Proposed Remedial Action Plan ("PRAP") for the Main Plant property. A 60-day comment period was held, during which the City filed comments. The release of a Record of Decision selecting the remedy is imminent.

Besicorp proposes to construct the cogeneration facility on a 34-acre parcel, known as the "South 40" property, which is located south of the Main Plant parcel. The South 40, which is also owned by BASF, is listed on the Registry as a class 3 site (does not present a significant threat to the public health or environment -- action may be deferred [ECL 27-1305(4)(b)(3)]), and is subject to a Voluntary Cleanup Agreement between DEC and BASF. BASF has submitted a draft Remedial Action Work Plan ("RAWP") to DEC, which will be made available for public comment.

Assuming the DEC permits and Article X certificate are issued, and after DEC-approved remedies for the Main Plant and South 40 properties have been implemented, Besicorp intends to accept transfer of the properties from BASF pursuant to a lease arrangement and commence project construction.

Procedural Background

Besicorp filed an application with the Siting Board to construct and operate the 505 MW combined cycle cogeneration plant. Besicorp also filed an application with DEC for a Part 201 Air State Facility permit, a SPDES permit, a Title IV Acid Rain permit, a Water Quality Certification, a Construction Stormwater SPDES Permit, and an Excavation and Fill in Navigable Waters permit. DEC issued the draft permits in May 2002. The entire project, both the newsprint and cogeneration plants, would operate under a single set of DEC permits.

The Article X certificate and DEC permit proceedings are being conducted on a combined record. Joint legislative/public statement hearings and a joint issues conference were held. At the issues conference, the City proposed issues relating to the cleanup of the BASF site and the impact Besicorp's proposed development might have on that cleanup, and argued that it was difficult to assess potential impacts from the project without information about the conditions on the site. The City indicated that it was not trying to adjudicate the appropriateness of any remedy selected by DEC at the BASF site. Rather, it was seeking, either through adjudication or a technical conference, to determine what precautions Besicorp was going to take during post-remediation construction to avoid disturbing the remediation. In response, DEC Staff and Besicorp contended that the City's concerns would be addressed in the context of the remedial programs undertaken by BASF pursuant to ECL article 27, title 13, and that the remedial program was an enforcement matter exempt from SEQRA and from permit hearing proceedings.

A technical conference was subsequently convened. During the second day of the technical conference, the parties discussed the topic of hazardous waste and remediation at the BASF site. Due largely to concerns raised by the City, Besicorp prepared draft outlines for a Post-Remediation Construction Plan, Fugitive Dust Control Plan, Waste Handling Plan, and Health and Safety Plan (collectively "Post-Remediation Construction Plans") to address issues relating to on-site hazardous waste and contamination encountered during project construction.

On September 27, 2002, Presiding Examiner Jaclyn A. Brilling and Associate Examiner/DEC ALJ P. Nicholas Garlick jointly issued a Ruling Specifying Article X and DEC Issues, Setting Schedule, Awarding Supplemental Funding and Other Matters (the September 27, 2002 Ruling). The Examiners rejected remediation of the BASF site as an issue for adjudication in the Article X proceeding, and the DEC ALJ rejected the issue for adjudication in the DEC permit proceeding. The Examiners held that:

"the cleanup of the BASF site is an enforcement matter and exempt from SEQRA. Further, the cleanup of the site is beyond the scope of Article X and the DEC permit hearing for the [newsprint plant] and involves a company, BASF, that is not a party to this proceeding"
(Ruling, at 15-16).

After the issues ruling, DEC's Division of Environmental Remediation conducted two informational sessions regarding the on-going remedial activities at the BASF site, which the City, among others, attended. Further post-issues conference proceedings were suspended at the parties' request in contemplation of a settlement. In consultation with the City and other parties, Besicorp revised the Post-Remediation Construction Plans and incorporated the plans into a final Joint Settlement Agreement in this case.

Although the Joint Settlement Agreement was filed with the Siting Board Secretary on June 18, 2003, not all hearing participants agreed to settle the matter. Consequently, the Examiners provided the participants with an opportunity to appeal the September 27, 2002 Ruling. The City so appealed as of right pursuant to 6 NYCRR 624.8(d)(2)(i). I now affirm the DEC ALJ's ruling insofar as appealed from.

Discussion

Environmental Conservation Law ("ECL") article 27, title 13 vests in the Department the responsibility and authority to administer the remediation of the state's inactive hazardous waste disposal sites. The article 27, title 13 remedial program is in the nature of enforcement (see Matter of New York Pub. Interest Research Group [Wathen] v Town of Islip, 71 NY2d 292, 306 [1988]). Specifically, ECL 27-1313 vests broad powers in the Commissioner to order the owner or any person responsible for the disposal of hazardous wastes at any site where such wastes constitute a significant threat to the environment to develop and implement a remedial program for such site (see also ECL 71-2727). ECL 27-1317 provides that "no person" may "substantially change" the manner in which an inactive hazardous waste disposal site listed on the state registry is used without first notifying the Department. "Substantial change of use" includes, but is not limited to, "the erection of a building or other structure on such site, the paving of such site for use as a roadway or parking lot, and the creation of a park or other public or private recreational facility on such site" (ECL 27-1317).

The Department's regulations implementing ECL article 27, title 13 also require notice to the Department before the start of physical alteration or construction constituting a substantial change of use of a listed site (see 6 NYCRR 375-1.2[f]; id. 375-1.6[a]). The regulations define "substantial change of use" as "the erection of any structure on a site, the paving of a site for use as a roadway or parking lot, the creation of a park or other recreational facility on a site; or any activity that is likely to disrupt or expose hazardous waste or to increase direct human exposure; or any other conduct that will or may tend to prevent or significantly interfere with a proposed, on-going, or complete program" (id. 375-1.3[v]).

Department regulations also provide, "No person shall engage in any activity * * * that will, or that reasonably is anticipated to, prevent or interfere significantly with any proposed, ongoing, or completed program at any site listed in the Registry; or * * * that will, or is reasonably foreseeable to, expose the public health or the environment to a significantly increased threat of harm or damage at any site listed in the Registry" (id. 375-1.2[e][2][i]). The proponent of such an activity must "demonstrate to the department that such activity will not have such effect by such demonstration as the department may find acceptable" (id. 375-1.2[e][2][ii]).

The Division of Environmental Remediation ("DER") is the division within the Department that implements the article 27, title 13 enforcement program. DER is responsible for overseeing and approving the investigation and remediation of sites on the Registry. This includes the continuing enforcement responsibility of assuring that any present or future activities proposed for a site will not interfere significantly with any on-going or completed remedial program.

DER uses a variety of legally enforceable mechanisms to assure that remedial programs are not interfered with by post-remediation activities on a site. For class 2 sites, the Record of Decision ("ROD") selecting the remedy for a site regularly imposes, among other things, deed covenants and restrictions that constrain activities and uses on the site, and requires the proponents of such activities to seek DER's approval before engaging in such activities. To the extent a party proposes a post-remediation activity or use that might have an impact on a remedy previously selected for a site, DER provides a process for modifying the selected remedy, if necessary (see "Making Changes to Selected Remedies," DER Program Policy, TAGM-4059 [May 4, 1998]). Consistent with 6 NYCRR 375-1.5, public participation is provided for in the ROD amendment process.

With respect to class 3 sites participating in DER's voluntary cleanup program, such as in this case, post-remediation controls similar to those imposed in a ROD are imposed through a Voluntary Cleanup Agreement or Consent Order ("VCA"). VCAs are also subject to amendment after appropriate public participation, to the extent a proposed future use requires a modification of a previously-selected remedy.

Besicorp's post-remediation construction plans on the inactive hazardous waste disposal sites located on the subject property are tied directly to the on-going enforcement action and inactive hazardous waste disposal site remedial program presently under development with BASF pursuant to ECL article 27, title 13 and its implementing regulations, 6 NYCRR subpart 375-1. To the extent any of Besicorp's proposed demolition and construction plans might reasonably be anticipated to significantly interfere with any ongoing or completed remedial program at the site, or expose public health or the environment to a significantly increased threat of harm or damage, the regulations require Besicorp to notify DER of its plans and demonstrate that the identified activities will not have such effect. Accordingly, before Besicorp begins any construction on the project site, it is required to submit its post-remediation construction plans to DER for review and final approval as part of DER's continuing enforcement responsibility.

The City, in addition to its participation in the development of the remedial program for the project site with BASF, seeks to adjudicate issues concerning Besicorp's post-remediation construction plans in the context of this hearing. However, this proceeding is separate and distinct from DER's remedial enforcement program, even though the permit and enforcement proceedings happen to be developing contemporaneously.

Nothing in the statutes or regulations requires the Department to duplicate review of Besicorp's post-remediation plans in the context of the present 6 NYCRR part 624 DEC permit proceeding. Under Part 375, Part 624 permit hearing procedures apply only to petitions by an owner or operator of a site on the registry seeking removal or reclassification (see 6 NYCRR 375-1.9[d][2][ii]). Part 624 is not otherwise made applicable to any other provision of the title 13 remedial program, either by title 13 itself or by the regulations. Thus, Besicorp's post-remediation construction plans are not subject to review in a Part 624 permit proceeding.1

As the Examiners correctly held, because the Department's inactive hazardous waste disposal site remedial program is in the nature of an enforcement action, it is also exempt from SEQRA review (see Matter of New York Pub. Interest Research Group [Wathen], 71 NY2d at 306; see also ECL 8-0105[5][i]). The circumstance that the SEQRA exemption for enforcement proceedings applies to remedial programs does not mean, however, that a hard look is not taken of environmental impacts and that such impacts are not minimized to the maximum extent practicable. To the contrary, the essence of the remedial program is to identify significant threats to health and the environment and, at a minimum, to "eliminate or mitigate all significant threats to the public health and to the environment presented by hazardous waste disposed at the site" (6 NYCRR 375-1.10[b]; compare ECL 8-0109[1] [under SEQRA, agencies shall, to the maximum extent practicable, "minimize or avoid" adverse environmental impacts]). Thus, public policy considerations do not compel SEQRA review of hazardous waste site remedial programs pursuant to Part 624 permit procedures. SEQRA-like review is essentially provided for through the hazardous waste disposal site remedial program itself. Moreover, adding the layer of Part 624 review would adversely impact the Department's ability to effectively and efficiently respond to significant health and environmental threats posed by hazardous waste sites.

The City argues that failing to review Besicorp's post-remediation construction plans under SEQRA and this Part 624 DEC permit proceeding will deprive the public and the City of the opportunity to meaningfully review and comment on hazardous waste impact issues associated with the project. Accordingly, the City contends that lack of such review in this Part 624 proceeding is inconsistent with the policy of comprehensive assessment of all related parts of an entire project at a meaningful stage of review. DER's remedial program, however, does not deprive the public of a meaningful opportunity to participate. Although formal adjudication is not provided for, the regulations require, and DER affords, public participation in the development of all remedial programs undertaken pursuant to title 13 (see 6 NYCRR 375-1.5). Indeed, as noted above, the City engaged in such public participation during the development of the ROD for the class 2 site, and will have the opportunity to participate in the remedy selection for the class 3 site. The City's concerns about the extent to which the ROD and VCA adequately control post-remediation construction activities by Besicorp are more appropriately raised and addressed in that venue. Moreover, to the extent Besicorp proposes, either now or at any time in the future, any post-remediation activities that require modification of either the ROD or VCA, the City will be afforded the appropriate degree of public participation the relevant modification process allows.

Conclusion

For the reasons stated above, I affirm the DEC ALJ's ruling that issues relating to the cleanup of the BASF site are not adjudicable in this DEC Part 624 permit hearing proceeding. This matter is remanded to the DEC ALJ for further proceedings consistent with this interim decision.

For the New York State Department
of Environmental Conservation


by: ______________/s/_________________
Erin M. Crotty, Commissioner

Albany, New York
August 22, 2003

1 The circumstance that the present version of Besicorp's post-remediation construction plans, which are yet to be approved by DER, were appended to the final Joint Settlement Agreement in these proceedings and filed with the Siting Board does not compel a contrary conclusion. That filing allows the Siting Board to make the findings required by Public Service Law § 168.
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