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Bethlehem Energy Center - Interim Decision, January 31, 2002

Interim Decision, January 31, 2002

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
625 BROADWAY
ALBANY, NEW YORK 12233-1010

In the Matter

-of-

The Applications for: Permits pursuant to Title 6
of the Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR")
Part 201; Subpart 201-6.1 and 231-2; a Clean Air Act ("CAA") Title IV permit pursuant to
Code of Federal Regulations ("CFR") 76.6(a)(3), Environmental Conservation Law ("ECL")
Article 19, and, a State Pollutant Discharge Elimination System ("SPDES") permit
pursuant to ECL Article 17 and 6 NYCRR Part 750 et seq.

- by -

PSEG Power New York, Inc.

(Bethlehem Energy Center)

Case No. 4-0122-00044/00021

PSC Case 99-F-2162

INTERIM DECISION

January 31, 2002

INTERIM DECISION

Introduction and Background

This Interim Decision relates to an appeal from the Issues Ruling ("Ruling") of Administrative Law Judge ("ALJ") P. Nicholas Garlick dated January 3, 2002. The ALJ's Ruling addresses the application before the New York State of Environmental Conservation ("Department" or "DEC" or "Staff") for certain environmental permits sought by PSEG New York Power, Inc. ("Applicant" or "PSEG") as part of its application for a certificate of environmental compatibility and public need pursuant to Article X of the Public Service Law ("PSL"). ALJ Garlick's Ruling was issued separately from the ruling of Presiding Examiner William Bouteiller.(1)

This Ruling was appealed by Uriel M. Oko, Ph.D., P.E. and Carol Oko ("Okos") on January 11, 2002. Replies were filed by the Department and the Applicant on January 18, 2002. Although a petition for party status had been jointly filed by the Riverkeeper, Scenic Hudson, Inc. and the Natural Resources Defense Council, this petition was withdrawn after negotiation and agreement among the petitioners, the Department and the Applicant on the issues contained in the petition.

Project Description

The Applicant has proposed to construct and operate a combined-cycle generating facility known as the Bethlehem Energy Center ("BEC" or "Project"), to permanently and completely replace its existing power generating facility. The BEC is proposed to be constructed on the site of the existing facility, on State Route 144 in Glenmont, Town of Bethlehem, New York. The site is approximately 84 acres and is zoned for heavy industrial use.

The Project is proposed to consist of three General Electric 7F series combustion turbines, three heat recovery steam generators, and one steam turbine. The primary fuel proposed to be utilized is natural gas. Low-sulfur distillate fuel is proposed to serve as a secondary fuel. The nominal electric generating capacity of the proposed facility will be approximately 750 megawatts ("MW").

The Applicant proposes to install an oxidation catalyst system to reduce carbon monoxide ("CO") and volatile organic compounds ("VOCs"), and a selective catalytic reduction system to reduce nitrous oxides("NOx"). Air emissions will result from the turbines and generators. It is proposed that the emissions will be vented through three 248-foot high exhaust stacks.

The BEC proposes to utilize a wet-hybrid closed cycle system for the facility's cooling technology. In addition, 2.0 millimeter (mm) wedge wire intake screens will be installed, as well as a seasonally-deployed, fixed panel Gunderboom Marine Life Exclusion System. The facility proposes to withdraw water from the Hudson River for its cooling system, via an existing intake structure located at the site. Sanitary wastewater is proposed to be routed to a publicly-owned treatment works in the Town of Bethlehem. Other wastewater, including cooling water effluent, is proposed to be treated and discharged to the Hudson River through existing outfalls.

Standards for Adjudication

Under the Department's permit hearing procedures, an issue is adjudicable if "it is proposed by a potential party and is both substantive and significant." 6 NYCRR 624.4(c)(1)(iii). An issue is "substantive" if there is sufficient doubt about the applicant's ability to meet statutory or regulatory criteria applicable to the project, such that a reasonable person would require further inquiry. In determining whether such a demonstration has been made, 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 party status, the record of the issues conference and any subsequent written arguments authorized by the ALJ. An issue is "significant" if it has the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit. 6 NYCRR 624.4(c)(2),(3).

Prior decisions of the Commissioner establish that adjudication of issues occurs only where the ALJ has sufficient doubt about an applicant's ability to meet all statutory and regulatory criteria such that a reasonable person would inquire further (Matter of Hydra-Co. Generations, Inc., Interim Decision of the Commissioner, April 1, 1988) and where, in the ALJ's judgment, there is a reasonable likelihood that adjudication would result in amended permit conditions or project denial. Matter of Jay Giardina, Interim Decision of the Commissioner, September 21, 1990.

In situations where Staff has reviewed an application and finds that a component of the applicant's project, as proposed or as conditioned by the draft permit, conforms to all applicable requirements of statute and regulation, the burden of persuasion is on the potential party proposing the issue related to such component to demonstrate that the issue is both substantive and significant. 6 NYCRR 624.4(c)(4). Agreement by Staff and the applicant over the terms and conditions of the proposed permit, the permit application and the draft permit prepared by Staff constitutes prima facie evidence that a proposed project will meet all of the relevant statutory and regulatory criteria. See, Matter of Sithe/Independence Power Partners, L.P., Interim Decision of the Commissioner, November 9, 1992. The burden imposed on the intervening party in such instances was upheld by the Third Department in Matter of Citizens For Clean Air v. New York State Dep't of Envt'l Conservation, 135 A.D.2d 256 (3rd Dept. 1988). There, the court, in upholding the Commissioner's determination to exclude certain issues from adjudication, stated that the burden on the intervenors was "... to provide a clear explanation of the issues sought to be adjudicated...". Id. at 261.

While the intervenor's offer of proof at the issues conference need not be so convincing as to prevail on the merits, its offer must amount to more than mere assertions or conclusions. See, Id. "The purpose of adjudication is not simply to develop or refine information concerning the project but rather to aid in decision making." Matter of Sithe, supra. Conducting an adjudicatory hearing where "offers of proof, at best, raise uncertainties," or where such a hearing would "dissolve into an academic debate" is not the intent of the Department's hearing process. Matter of Adirondack Fish Culture Station, Interim Decision of the Commissioner, August 19, 1999, at 8, citing Matter of AKZO Nobel Salt Inc., Interim Decision of the Commissioner, January 31, 1996.

Judgments about the strength of the offer of proof must be made in the context of the application materials, the analysis by Staff, draft permits and the issues conference record. Offers of proof submitted by a prospective intervenor may be completely rebutted by reference to any of the above, alone or in combination. In such a case, it would be a disservice to the applicant and the public at large to proceed any further with time consuming and costly litigation. See, Matter of Bonded Concrete, Inc., Interim Decision of the Commissioner, June 4, 1990.

Accordingly, the environmental permit information contained in the Article X application filing, the draft permits and attendant information required by the Department, constitutes the Applicant's prima facie case for issuance of the Department's permits. See, Matter of Athens Generating Company LP., Interim Decision, June 2, 2000, p. 4, citing Sithe, supra. See, also, Matter of 4'Cs Development Corporation, ALJ Ruling, February 27, 1996; Matter of Waste Management of NY, LLC., Interim Decision, May 15, 2000. The application materials are available at the issues conference to assist the DEC ALJ in determining if there are issues requiring an adjudicatory hearing.

ALJ Ruling, Appeal and Discussion

ALJ Ruling on the PCB Issue

The issue raised by the Okos, as framed by the ALJ, concerns the Okos' belief that there should be additional analysis of the potential release of polychlorinated biphenyls ("PCB or "PCBs") emissions from the proposed facility. Ruling, p. 6. The Okos' theory is based upon an assumption that the United States Environmental Protection Agency 's ("USEPA") mandated dredging of the Hudson River will cause PCBs to be resuspended in the water column and the PCBs will relocate to the area of the river near BEC and will be drawn into the facility when it withdraws its cooling water from the Hudson River. Then, the water is circulated through the proposed facility, a co-distillation process will occur, and the PCBs would then be released as emissions from the plant's steam plume. The Okos propose to receive $41,560 in Public Service Law ("PSL") 164(6) intervenor funds to study this issue. Ruling, P. 7.

The ALJ found that the Okos' proposed issue was neither substantive nor significant and, as such, denied the Okos party status. Ruling, p. 11. The ALJ rejected the Okos' assertion that "allowing this project to progress without conducting additional studies such as the one he proposes amounts to 'reckless endangerment'." Ruling, p. 10. The rationale for rejecting the assertions of the Okos and their proposed issue was based largely upon the fact that the ALJ found the Okos' theory to be supported by speculative assumptions and varying estimates of the quantity of PCBs that would be drawn into the BEC. In particular, the ALJ noted the Applicant's claims that there were not enough PCBs in the Hudson River to validate the Okos' theory. Ruling, p. 10. Finally, the ALJ discussed Staff's contention that both DEC and the Department of Health ("DOH") had carefully examined the Okos' theory and had determined that it lacked merit. Ruling, p. 10.

The Okos Appeal

The Okos' appeal takes issue with several statements made by the ALJ in his Ruling, but primarily contests the regulatory standard applied to the release of PCB emissions by the BEC. The Okos argue that this standard, which sets a threshold of ten tons per year for PCB emissions for new plants (Clean Air Act ("CAA") Section 112(g)), is insufficient to protect public health. Okos Appeal, pp. 3-4. The Okos acknowledge, however, that the Applicant's facility will never contravene this standard. Okos Appeal, p. 6.

Instead, the Okos claim that DEC should regulate the Project pursuant to Section 112(f) of the CAA, "Standards to Protect Health and the Environment." Dr. Oko asserts that this section would have been applied by the Department if the threshold health risk analysis performed by PSEG at the request of the Department of Health ("DOH") had indicated that the facility might cause unacceptable cancer risks. Okos Appeal, pp. 3-4. The Okos concede that this analysis did not show an unacceptable cancer risk. However, the Okos contend that they have demonstrated that the PSEG risk analysis is seriously flawed, and thus, further study is warranted. Okos Appeal, pp. 4-6. They further claim that the Department could be found to be arbitrary and capricious by failing to require additional analysis. Okos Appeal, p. 5.

Finally, in the Okos' December 18, 2001 Response to PSEG's Closing Brief ("Okos Response"), which is incorporated into the Okos' appeal, the Okos claim that they have identified significant errors in the input data that formed the basis for the PSEG analysis. Okos Response, pp. 12-13. These errors largely relate to the failure of the Applicant to assume concentrations of PCBs under a dredging scenario and problems with respect to USEPA data, which the Okos assert was relied on by PSEG in performing the threshold health risk analysis. Okos Response, pp. 14-23.

PSEG Reply

PSEG maintains that the ALJ's Ruling should be affirmed and that the Okos' appeal is without merit. Generally, PSEG argues that since the Okos' proposed issue relies upon speculation, and theories unsubstantiated by any proof, and fails to identify how the proposed issue could result in a significant change or denial of the permit, their appeal must be denied.

PSEG asserts that the ALJ properly ruled that the Okos have not identified a substantive and significant issue under 6 NYCRR 624.4(c). PSEG bases their position on a number of deficiencies in the Okos' claims. First, PSEG argues that the ALJ was correct in noting that the Okos have failed to identify any standard which the facility could violate by the emission of PCBs from its cooling towers, even under a dredging scenario. PSEG Reply, p. 5. Further, PSEG specifically addresses the Okos' claim in their appeal that CAA Section 112(f) could potentially be violated, asserting that this section clearly indicates that it does not apply to the BEC. PSEG Reply, p. 6. Second, PSEG contends that even if the Okos' theories were accepted and a health risk assessment was required, prior decisions of the Department prevent the results of such an assessment as forming the sole reason for the denial of an air permit. PSEG Reply, p. 7. Finally, PSEG contends that the Okos' offer of proof was insufficient to establish any real risk requiring further inquiry and that their claim that failure to require further analysis equates to reckless endangerment, must be rejected. PSEG Reply, p. 7-9.

PSEG also disputes the appropriateness of evaluating the USEPA study in the context of a proceeding before DEC, and contends that if the Okos' theories should be reviewed, they should be addressed as part of USEPA's processes. PSEG Reply, p. 9-11. Additionally, PSEG claims that the technical basis for the Okos' proposed issue is flawed, since the Okos are speculating as to the potential PCB concentrations in the Hudson River in the vicinity of the BEC. In contrast, PSEG asserts that the PCB concentrations utilized in their threshold health risk analysis were based on actual water samples, were selected in accordance with DOH policies, and were consistent with USEPA studies predicting PCB concentrations under a dredging scenario. PSEG Reply, p. 11-13.

DEC Reply

The Department also argues that the Okos' appeal is without merit and the ALJ's Ruling should be upheld. Staff maintains that after considerable investigation and review of the analysis conducted by the Applicant, neither DEC nor DOH could substantiate the Okos' proposed issue. DEC Reply, p. 3-5. Staff further claims that not only did the Okos fail to demonstrate that there is a need to impose any permit conditions to regulate PCB emissions from the Project, they also failed to show that such emissions would create health problems. DEC Reply, p. 8.

Staff argues that the Ruling should be affirmed based upon the failure of the Okos to meet their burden to demonstrate that the issue is substantive and significant under 6 NYCRR 624.4. Staff maintains that the DEC hearing process is not an appropriate forum for resolution of the Okos concerns, since those concerns do not rise to the level to effect the Applicant's DEC permits. Instead, Staff claims that the Okos' challenges to USEPAs' dredging analysis would amount to a scientific debate and the Okos' health risk assessment claims are not applicable where such an assessment has no bearing on DEC regulatory requirements. DEC Reply, p. 6-7.

Finally, DEC maintains that since the Okos have failed to propose any applicable requirements necessitating the regulation of PCBs for this Project, their appeal should be dismissed. Staff disputes the Okos' claims that Section 112(f) of the CAA is such a requirement. Staff asserts that this section contains a legislative directive to USEPA regarding reducing the risk of certain sources, and is not a statutory standard that can be imposed in the Project's permit. Since PCB emissions are only regulated where those emissions exceed the threshold set forth in 40 CFR 63.43, and the Okos agree that this threshold will never be violated, the DEC argues that the ALJ's Ruling should be affirmed in its entirety. DEC Reply, p. 7-8.

Discussion

Upon my review of this matter, I find that there is an insufficient offer of proof to join this issue for adjudication, and therefore the Ruling of the ALJ is affirmed. It is incumbent upon those seeking party status to demonstrate that there is an issue which should be evaluated through adjudication and that such evaluation would aid in decision-making with respect to any project. It is clear to me that the Okos have not raised such an issue.

The undisputed record indicates that there are presently no PCBs detected in the Hudson River in the vicinity of the BEC. Ruling, p. 8. The record is also not contested with respect to the fact that the analysis undertaken by the Applicant demonstrates that it would be impossible for the BEC to violate the threshold PCB emission limitation set forth in 40 CFR 63.43, since the Okos concede that there are not enough PCBs in the Hudson River to meet the minimum set forth in this regulation. Okos Appeal, p. 6. The Okos also do not challenge the fact that the threshold risk analysis undertaken by PSEG, at the request of the DOH, revealed no unacceptable health risks related to the Project's emissions. Okos Appeal, p. 4.

Instead, the Okos contend that the Applicant's analysis is flawed since it failed to properly address the impacts of dredging on the concentrations of PCBs in the vicinity of the BEC. Although PSEG contends that they have analyzed the potential level of PCB emissions under dredging conditions, the Okos propose that the reliance by PSEG on USEPA's studies are faulty since the USEPA's analysis was incorrect. The Okos argue that additional health analysis is required and that the Project should be regulated pursuant to Section 112(f) of the CAA.

The failure of the Okos to identify any issues relating to regulatory standards that could potentially be violated by the Project, mandates dismissal of the Okos appeal. Section 112(f) of the CAA, which was asserted to apply to the Project by the Okos, is clearly inapplicable. Additionally, the Okos have conceded that the BEC could not possibly violate the threshold limit for PCBs of 10 tons per year set forth in the federal regulations. Since the Project will comply with all applicable regulatory requirements in the permits, as drafted, the Okos have not raised a substantive and significant issue and the Ruling of the ALJ must be upheld.

Additionally, based upon my review of the record, I find that the Okos' assertions are far too speculative to provide any assistance in the process of permitting this facility. The tenuous nature of the Okos' theory is demonstrated by the fluctuation of their assumptions regarding PCB concentrations under a dredging scenario. Initially, the Okos claimed PCB concentrations of 30 pounds per year, now the claim is 54 pounds per day . Ruling, p. 10. In contrast, the threshold health risk analysis reveals no likely health impacts from PCB emissions, even assuming PCB concentrations consistent with USEPA estimates of concentrations after dredging. Further, assurances with respect to the reliability of this analysis can be found in the review and approval of such analysis by both DEC and DOH staff. Since dredging is a contingent future event, the Okos' numbers cannot be verified, even after completion of their study. As such, the proposed study would amount to nothing more than an academic debate about those concentrations. The adjudication process is not an appropriate forum to entertain such a debate. See Matter of Adirondack Fish Culture Station, Interim Decision of the Commissioner, August 19, 1999, at 8, citing Matter of AKZO Nobel Salt Inc., Interim Decision of the Commissioner, January 31, 1996.

Conclusion

Upon review of all other matters not specifically addressed above, I find them to be without merit. I affirm the ALJ in accordance with the above discussion. Accordingly, the application is remanded to Staff to continue processing consistent with this Interim Decision.

For the New York State Department
of Environmental Conservation

______________/s/_______________

By: Erin M. Crotty, Commissioner

Dated: Albany, New York
January 31, 2002

1 The Article X Ruling was issued by the Presiding Examiner on November 15, 2001. All issues that were identified for adjudication were resolved thorough negotiations among the parties. Although the DEC and Article X Issues Conferences are generally scheduled together, an error in the publication of the DEC notice by the Applicant caused the DEC Issues Conference to be rescheduled.

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