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Brookhaven Energy Limited - Ruling, October 25, 2001

Ruling, October 25, 2001

NEW YORK STATE BOARD ON ELECTRIC
GENERATION SITING AND THE ENVIRONMENT
CASE 00-F-0566

Application by Brookhaven Energy Limited Partnership for a Certificate of
Environmental Compatibility and Public Need to Construct and Operate
a 580 Megawatt Electric Generating Facility in the Town of Brookhaven, Suffolk County.

RULING ON PARTY STATUS, ISSUES,
INTERVENOR FUNDING AND SCHEDULE

(Issued October 25, 2001)

WALTER T. MOYNIHAN, Presiding Examiner, and

DANIEL P. O'CONNELL, Associate Examiner

PARTY STATUS

By motion dated September 13, 2001, PPL Global, LLC (PPL Global) seeks party status in the instant proceeding. PPL Global notes that it and its affiliates are participating in the development of competitive 300 megaWatt (MW) generation facilities in Kings Park in the Town of Smithtown, and have responded to a proposal issued by the Long Island Power Authority (LIPA) to construct and operate generating capacity at the Shoreham site in the Town of Brookhaven. Both sites are in the County of Suffolk as is Brookhaven Energy Limited Partnership's (Brookhaven Energy's) 580 MW facility (Project) proposed in the instant case.

PPL Global reports that in its Public Service Law (PSL) Article X application, it is currently negotiating stipulations, one of which could require it to study the cumulative impacts of its facility and the Brookhaven Energy Project on a number of environmental media, the bulk transmission system, and the competitive electric markets.

Next, PPL Global notes that opponents of its proposed facility for King Park have suggested that the Brookhaven Energy Project site be evaluated as an alternative. Finally, PPL Global reasons that evidence adduced in the course of the instant proceeding could affect its subsequent proceeding concerning the Kings Park Article X application. For these reasons, it claims that it needs to protect its interests.

PPL Global states it would monitor the record in the instant proceeding and not proffer evidence or cross-examine witnesses unless it is necessary to protect PPL Global's interests.

In a response dated September 24, 2001, Brookhaven Energy opposes PPL Global's request for party status because it is untimely, because PPL Global does not otherwise qualify for party status, and because the issues PPL Global seeks to address are irrelevant and immaterial to the instant proceeding. According to Brookhaven Energy, the time for filing a notice of intervention expired on August 9, 2001, which is within 45 days after the date given in the published notice as the date for filing the application as set forth in PSL §166.

Next, Brookhaven Energy notes that PPL Global does not qualify for party status as a matter of right and it is ineligible as a matter of discretion. What PPL Global is required to analyze in support of its project, Brookhaven Energy asserts, is irrelevant to the development of the record in the instant proceeding. Specifically, Brookhaven Energy observes that PPL Global stands behind Brookhaven Energy on the New York Independent System Operator's (NYISO's) interconnection study queue, and the interconnection studies for both projects have already been approved by the NYISO Operating Committee. Thus, Brookhaven Energy maintains the impacts of both projects have already been studied in accordance with NYISO's requirements.

With respect to PPL Global's claim that evidence adduced in the instant proceeding may impact PPL Global's application, Brookhaven Energy asserts it is not a basis for granting party status in the instant proceeding.

In deciding PPL Global's request for party status, Brookhaven Energy argues that the Siting Board should determine if PPL Global's participation would "contribute to the development of a complete record." (16 NYCRR §4.3(c)(l)). Since PPL Global stated that it does not plan to proffer evidence or cross-examine witnesses unless it is necessary to protect its interest, Brookhaven Energy claims that PPL Global has no plans to contribute to the record in the instant proceeding.

Brookhaven Energy is correct that in many of the subsections of PSL §166 there is a 45-day period established for submitting a request for party status. However, PSL §166(m) allows the Siting Board to grant party status "at any time" to such other persons or entities it deems appropriate. Thus, we will not bar PPL Global's request on the grounds that it is untimely.

We recognize that PPL Global is concerned about developments in the instant proceeding because they may have a bearing on PPL Global's Article X application. While it is apparent that PPL Global's interests may be substantial, they have not been shown to be relevant to the instant proceeding, to contribute to the development of a complete record with respect to Brookhaven Energy's application, nor to otherwise justify intervention. Consequently, PPL Global's request for party status is denied without prejudice. PPL Global is free to monitor the public hearings and inspect the public record in the instant proceeding and, based upon a proper showing, may reapply for party status. PPL Global also submitted proposed issues; they are briefly mentioned here.

With respect to the three issues raised by PPL Global, the first concerns the impacts on Long Island's electrical transmission system and the second concerns the concurrent impacts on competition that limits on the transmission system would have. Both of these issues have been proffered by other parties and are discussed herein.

The third issue raised by PPL Global seeks to examine the impacts of the Project on wholesale and retail gas supplies and prices on Long Island and whether the Project would comply with New York State Reliability Council's Local Rule No. 5 with respect to gas supply.

Brookhaven Energy contends that PPL Global's third issue is not appropriate for adjudication. Contrary to PPL Global's submission, Brookhaven Energy notes that the focus of Local Rule No. 5 is the integrity of the electric transmission system, and not wholesale and retail gas supplies. According to Brookhaven Energy, Local Rule No. 5, LIPA Loss of Generator Gas Supply, states: "Considering the loss of gas supply as a single contingency that will impact the electric power system, the number of gas fired generators must be limited above critical system load levels. Above 3200 MW, 2 Northport units can be gas fired. At peak loads, Port Jefferson 3-4 gas operation must be restricted." Brookhaven Energy explains that Local Rule No. 5 addresses the concern that a gas transmission line failure, a single contingency, could threaten electrical system security if too much generation is being fueled off that single gas transmission line. Since it is expected that the Project would interconnect with the KeySpan system, which is supplied by both Transco and Iroquois, Brookhaven Energy asserts that this standard is not even applicable to it. Further, Brookhaven Energy states that its Interconnect Study, which was approved by NYISO, modeled the loss to the entire Brookhaven Energy Project (i.e., essentially the purpose of Local Rule No. 5) and showed that it would not result in any criteria violations of the LIPA system.

We agree with Brookhaven Energy that evidence concerning Local Rule No. 5 is not relevant to the issues in this proceeding because the Project would not rely on a single gas transmission line for fuel.

RULINGS ON PROPOSED ISSUES FOR ADJUDICATION RELATED TO THE ENVIRONMENTAL PERMITS

Standard for Determining Issues

For the environmental permit applications pending before the Department of Environmental Conservation (DEC), Title 6 of the Official Compilation of Codes, Rules and Regulations (6 NYCRR §624.4(c)) outlines the standards for adjudicable issues. When, as here, the DEC Staff has determined that a proposal, as conditioned by the draft permits, 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.(1)

An issue is substantive if there is sufficient doubt about the applicant's ability to meet the applicable statutory or regulatory criteria such that a reasonable person would inquire further. To determine whether an issue is substantive, the DEC associate examiner must consider the proposed issue in light of the application and related documents, the draft permit, the content of any petitions filed for full party status and amicus status, the record of the DEC issues conference and any subsequent written arguments authorized by the DEC associate examiner.(2) To be substantive, the issue cannot be based merely on speculation but on facts that can be subjected to adjudication.(3) In addition, an issue can be demonstrated by identifying a substantive defect or omission in the application materials.(4)

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.(5)

DISCUSSION AND RULINGS ON PROPOSED ISSUES
RELATED TO THE DEC ENVIRONMENTAL PERMITS

Draft State Pollutant Discharge Elimination System Permit

In addition to filing an application for a certificate of environmental compatibility and public need with the Siting Board, the applicant filed an application for a State Pollutant Discharge Elimination System (SPDES) permit with the DEC.(6) Pursuant to Environmental Conservation Law (ECL) Article 17 and its implementing regulations at 6 NYCRR Part 750 et seq., the applicant seeks a SPDES permit for storm water discharges during the operation of the Project. During operations, storm water would be discharged through two storm water conveyance outfalls into an on-site infiltration basin that would recharge to groundwater.

During normal operations, storm water would collect in the outdoor containment areas surrounding the step-up and auxiliary transformers. After a storm event, the storm water would be drained from these containment areas through an oil/water separator and discharged to the storm water conveyance system. In addition, the runoff from roofs, roads, parking lots and general areas on the site would be collected by a storm water conveyance system, with catch basins and pipes, to an on-site infiltration basin.

The DEC Staff reviewed the SPDES application, and developed a draft permit with the required fact sheet for public review and comment. During the DEC issues conference, the applicant and the DEC Staff confirmed there were no disputes over any substantial terms or conditions of the draft SPDES permit.(7) The petitions for full party status from the Town of Brookhaven (Town) and the Yaphank Taxpayers and Civic Association (YTC) do not propose any issues for adjudication about the conditions of the draft SPDES permit.(8) Therefore, there are no substantive and significant issues for adjudication concerning the draft SPDES permit.

Draft Air Permits

The federal Clean Air Act, ECL Article 19 (Air Pollution Control), and their respective implementing regulations identify air pollutants, and regulate their emissions. The Project is subject to the federal Prevention of Significant Deterioration (PSD) review(9) because the potential emissions from the proposed facility would exceed the major source thresholds for all of the PSD regulated pollutants, except lead. In August 2001, the DEC Staff prepared a draft PSD determination and fact sheet for public review and comment.

The proposed facility is located in a severe non-attainment area(10) for ozone. Oxides of nitrogen (NOx) and volatile organic compounds (VOCs) are precursors to ozone formation and are treated as non-attainment pollutants, even though the area is in attainment for NOx. As a result, the Project would need to implement the lowest achievable emission rate (LAER) to control NOx emissions.

In addition to using LAER to control NOx emissions, the applicant must also obtain emission reduction credits for ozone precursors (NOx and VOCs). Given the location of the proposed facility, the NOx offset ratio is 1.3 to 1.(11) Because the potential emission concentration for NOx is 114.5 tons per year (tpy), the required emission reduction credits for NOx would be 148.9 tpy. Since, the Project is considered a minor source for VOCs emissions, the proposed facility would not require any emission reduction credits for VOCs.

With respect to other regulated air pollutants, the emissions of particulate matter (PM/PM10) would be controlled through the use of natural gas and kerosene, which are clean burning fuels. Potential emissions of sulfur dioxide (SO2)and sulfuric acid mist (H2SO4) from the proposed facility would be controlled through the use of natural gas as the only fuel used by the combustion turbines.

The applicant would install a carbon monoxide (CO) catalyst as the best available control technology (BACT) to limit these potential emissions. In addition, the CO catalyst would reduce VOC emissions.

Title V of the federal Clean Air Act requires applicants of major air emission sources to obtain pre-construction air permits. Pursuant to 6 NYCRR Subpart 201-6, the applicant filed an application with the DEC for a Title V permit to authorize the construction and operation of the proposed facility. After reviewing the application, the DEC Staff prepared a draft permit and fact sheets for public review and comment, as required by regulation.

In addition, pursuant to the Phase II requirements of Title IV of the Clean Air Act and 40 CFR §72.6(a)(3), the DEC Staff reviewed the applicant's acid rain permit application in conjunction with the Title V application. The DEC Staff has tentatively approved the acid rain permit application.

The conditions in the draft air permit would authorize the construction and operation of the Project pursuant to 6 NYCRR Subpart 201-6.1 and ensure conformance with the requirements in 6 NYCRR Parts 201, 225, 227, 231, and 257, as well as all other applicable state air pollution regulations and federal requirements pursuant to the New Source Performance Standards (NSPS) outlined in Title 40 of the Code of Federal Regulations (40 CFR) Part 60.

At the issues conference, the DEC Staff and the applicant confirmed there were no disputes over any substantial terms or conditions in the draft air permits.(12)

Although the Town's petition for full party status included proposed issues related to the draft air permit, the Town, in a letter dated October 18, 2001, withdrew all its proposed issues concerning the draft air permit. The discussion that follows addresses the petition filed by YTC.

Yaphank Taxpayers and Civic Association's Petition

The DEC's Announcement and Combined Notice concerning the environmental permits set October 5, 2001 as the date by which potential intervenors were to file petitions for full party status consistent with the requirements outlined in 6 NYCRR Part 624. According to the Notice requirements, petitioners for full party status were required to file copies of their respective petitions with the examiners, DEC Staff, Department of Public Service (DPS) Staff, and the applicant. In a petition dated October 1, 2001, YTC outlined its potential issues related to the review required by PSL Article X, and the environmental permit applications pending before the DEC.

The DEC associate examiner received YTC's petition on October 4, 2001. However, YTC did not serve the other issues conference participants until October 11, 2001.

DEC Staff waives any objection associated with service of YTC's petition, and requests a ruling on the merits of YTC's proposed issues.(13) The applicant, however, objects to YTC's petition, because it is untimely, and because it does not address the criteria outlined in 6 NYCRR §624.5(c) concerning late filed petitions. In addition, the applicant argues that YTC's proposed issues are not substantive and significant.(14)

During the DEC issues conference, YTC's representative addressed the criteria outlined in 6 NYCRR §624.5(b)(1 and 2).(15) Although YTC did not timely serve its petition on the other issues conference participants, all participants responded to the merits of YTC's petition. Consequently, the merits of YTC's petition are considered below. YTC proposes three issues for adjudication with respect to the DEC draft air permit.

PM2.5

First, YTC wants the applicant to undertake an analysis about the potential adverse health impacts associated with exposure to particulate matter that has a diameter of 2.5 microns or less (PM2.5). According to YTC, the absence of this information is a substantial defect in the application materials.

The applicant objects to this proposed issue. According to the applicant, YTC's reliance on the South Camden Citizens in Action(16) matters is misplaced because the principal issue is environmental justice, which YTC does not assert is an issue here.(17) The applicant also referred to the attachment to its October 10, 2001 response concerning PM2.5.(18)

The DEC Staff objects to this proposed issue.(19) To support its objection, the DEC Staff cites Environmental Protection Agency (EPA) guidance,(20) and the DEC Commissioner's decision concerning Consolidated Edison's proposed facility at its East River Station.(21)

Based on the EPA guidance and the DEC Commissioner's Decision concerning the proposed East River facility, which are referenced in the preceding paragraph, YTC's proposed issue concerning the potential adverse health impacts associated with exposure to PM2.5 is not a substantive and significant issues for adjudication.

Cumulative Air Quality Analysis

As its second proposed issue, YTC contends that the applicant should be required to conduct a cumulative air quality analysis. According to YTC, the Brookhaven Landfill, which accepts incinerator ash, the County Fire Training Center, and diesel truck traffic on the Long Island Expressway (LIE) are existing air emission sources in, or near, the Yaphank community. YTC is concerned about how the PM2.5 emissions from these existing sources in combination with the potential PM2.5 emissions from the proposed facility could adversely impact public health in the Yaphank community.

The applicant asserts that the application materials for both the PSL Article X certificate and the DEC air permit address this proposed issue. Referring to the pre-application stipulations, the applicant states that it would have undertaken a cumulative impact analysis for any air pollutant if the potential emission concentration from the proposed facility had exceeded the federally established significant impact level (SIL) for that particular pollutant. According to the applicant, all potential emission concentrations from the proposed facility would be less than the applicable SILs.(22) The applicant concludes that a cumulative analysis was not necessary, and should not be required now.

YTC's proposed cumulative impact issue has two components. First, YTC is specifically concerned with the potential cumulative impacts associated with PM2.5 emissions. The second component relates to whether the applicant should be required to undertake such an analysis.

Based on EPA guidance and the DEC Commissioner's Decision concerning the proposed East River facility, analyses related to impacts from PM10 will serve as a surrogate for potential impacts from PM2.5. With respect to the need to undertake a cumulative impact analysis, YTC has not offered anything to show that potential particulate concentrations from the proposed facility would exceed the applicable SILs. Moreover, YTC neither argues nor proffers any information to show that the terms of the pre-application stipulations, which outline the conditions that would trigger a cumulative air impact analysis, should be reconsidered at this point in the proceeding. Accordingly, the proposed issue is denied because it is not substantive and significant.

Air Emissions from Truck Traffic

If the applicant cannot connect its proposed facility to the municipal sewer system, YTC asserts that the applicant may collect process and sanitary waste water at the site and then truck it offsite for treatment. YTC is concerned about the additional particulate pollution associated with these truck trips, and wants the applicant to analyze this potential impact within the context of the pending air permit application. YTC acknowledges that the proposed issue would be moot if the applicant obtains permission to connect the Project to the municipal sewer system.(23)

Although Suffolk County did not file a petition for party status concerning the pending environmental permits, the County's representative states that trucking waste water offsite would not be an acceptable long-term solution pursuant to the Suffolk County Sanitary Code. Nevertheless, the County explains that discussions with the applicant about connecting the proposed facility to the municipal sewer system are ongoing.(24)

The applicant acknowledges that mobile sources are regulated pursuant to the Federal Clean Air Act, but not pursuant to the provisions that apply to the proposed facility. The applicant concludes that the potential truck emissions are beyond the scope of the draft air permit, and therefore, should not be considered an adjudicable issue.(25)

The scope of the proposed issues that may be considered here is limited to the terms and conditions of the draft air permit for the Project, as a stationary air emission source. YTC has not identified any legal standard that could expand the scope of the draft air permit to incorporate additional conditions related to mobile emission sources that may travel to and from the site. Therefore, YTC's proposed issue is not a substantive and significant one for adjudication.

Rulings on Requests for Party Status

As provided by 6 NYCRR §624.5, the parties to any DEC adjudicatory hearing are the applicant, the DEC Staff and those who have been granted full party status. As explained above, the Town and YTC filed petitions for full party status. The Town, however, has withdrawn its proposed issues with respect to the draft air permit.

The criteria for determining whether the DEC associate examiner should grant petitions for full party status with respect to the pending environmental permits are provided in 6 NYCRR §624.5(d)(1). Upon review of these criteria and the petition for full party status, YTC has not raised any substantive and significant issues for adjudication with respect to the draft environmental permits prepared by the DEC Staff.(26) Accordingly, its petition for full party status is denied. This ruling does not affect the participation of the Town and YTC in the related PSL Article X proceeding before the Siting Board.

Appeals

A ruling of the DEC associate examiner to include or exclude any issue for adjudication, a ruling on the merits of any legal issue made as part of an issues ruling, or a ruling affecting party status may be appealed to the DEC Commissioner.(27) Since the rulings related to the draft environmental permits are part of a joint ruling concerning the pending PSL Article X certificate, the DEC issues conference participants are directed to follow the time periods for interlocutory review outlined in 16 NYCRR §4.7. Any appeals(28) must be in writing and received by the DEC Commissioner at NYS Department of Environmental Conservation, 625 Broadway, Albany, New York, 12233-1010.

The rulings that may be appealed to the DEC Commissioner pursuant to 6 NYCRR §624.8(d)(2) are the items addressed under the following headings: (1) Rulings on Proposed Issues for Adjudication related to the Environmental Permits, and (2) Rulings on Requests for Party Status. Appeals filed pursuant to §624.8(d)(2) should address the DEC associate examiner's rulings directly, rather than merely restate the participant's contentions.

Order of Disposition

Subject to review by the DEC Commissioner of any duly filed appeals, there are no issues for adjudication with respect to the draft environmental permits prepared by the DEC Staff. Consequently, an adjudicatory hearing concerning the terms and conditions of the draft environmental permits is not necessary. As authorized by 6 NYCRR §624.4(c)(5), the DEC associate examiner, unless otherwise determined by the DEC Commissioner, directs the DEC Staff to complete the processing of the pending permit applications, as may be required by applicable statutes or regulations.

The remainder of this ruling addresses the proposed issues related to the requested certificate pending before the Siting Board.

Issues Ruling with Respect to PSL Article X

The August 24, 2001 notice of an issues conference required each active party to file a list of Article X issues it proposes to litigate and a sufficient explanation of why litigation is necessary for each such issue. Lists of issues were received from the LIPA, PPL Global, DPS Staff, the Town, and YTC. Below is a summary of the issues raised:

Alternative Requirements

  1. Should Brookhaven Energy be required to, and other parties be allowed to, set forth the impacts of reasonable alternatives under PSL §168 (2)(c)(i).
    1. Is Brookhaven Energy a "private applicant" and not required to present an evaluation of reasonable alternatives?
    2. Should other active parties be allowed to present evidence that the Shoreham site is a reasonable and preferable alternate site?
    3. Even if not required to present an evaluation of reasonable alternatives, should Brookhaven Energy be compelled to disclose its examination of alternate sites?
    4. Should other active parties be allowed to present evidence on the "no action" alternative?

      Public Health and Safety

  2. Should parties be allowed to present evidence on traffic and road management pursuant to PSL §168(2)(c)(ii)?

    Environmental Impacts

  3. Should parties be allowed to present evidence on various environmental impacts associated with aesthetics, noise, and waste water discharge?

    Local Laws

  4. Pursuant to PSL §168 (2)(d), Should parties be allowed to show that Brookhaven Energy should be required to comply with all of the Town's Code including zoning, building permit, inspection, safety and certificate of occupancy requirements?

    Public Interest

  5. Should parties be allowed to present evidence on various public interest issues associated with the construction and operation of the proposed Project, including impacts on the electric transmission system of LIPA, wholesale electric market, competition, and decommissioning costs and funding?

Alternatives Requirement

According to the Town, Brookhaven Energy is not a "private applicant," but rather an "electric corporation" within the meaning of the Transportation Corporation Law (TCL) §10 and therefore is vested with the power of eminent domain contained in TCL §11 (3-a). Consequently, the Town argues that Brookhaven Energy is not a private applicant as defined in 16 NYCRR §1000.2(o) and cannot avail itself of the Siting Board's rule 16 NYCRR §1001.2(d)(2), which states that private applicants may limit discussions of site alternatives to parcels owned by, or under option to such applicants.(29)

TCL §10 states that an electric corporation is a corporation "organized to manufacture, to produce or otherwise acquire, and supply for public use electricity . . ." Although the Town acknowledges that Brookhaven Energy is a limited partnership organized in Delaware and not a corporation, the Town reasons that Brookhaven Energy should be treated as an electric corporation in the TCL. TCL §4, the Town observes, provides:

Any corporation to which the business corporation law is made applicable by this section shall be treated as a 'corporation,' 'domestic corporation,' or 'foreign corporation,' as such terms are used in the business corporation law, except that the purposes for which any such corporation may be formed under [TCL §3] shall not thereby be extended.

The Town continues by noting that TCL §5 provides:

A corporation . . . incorporated under a general law for a purpose . . . for which a corporation may be formed under [the TCL] shall in respect to such purposes have all the powers and privileges conferred, and shall be subject to all the duties, liabilities and limitations imposed, on a corporation organized for such purpose . . . under the [TCL].

Finally, the Town points out that among the privileges granted to a transportation corporation is the right of eminent domain. (TCL §11-3a).

In support of its rationale, the Town cites Home Gas Company v. Eckerson,(30) in which a domestic New York business corporation organized to transport natural gas in New York for public use had been found to be a "gas corporation" under TCL and therefore has power of eminent domain even though it was not incorporated under TCL §3.

While defining the term "electric corporation" as a "corporation organized to . . . supply for public use electricity . . ." (TCL §10), the Town observes that the TCL itself does not define the term "corporation." However, it maintains that Brookhaven Energy is clearly "an electric corporation" under PSL §2(13), where the term "electric corporation," is expressly defined to include "partnerships" and "associations" that own an "electric plant," which includes generating facilities such as the Project proposed by Brookhaven Energy. The definition of "electric corporation," in the PSL, the Town argues, supports the conclusion that Brookhaven Energy is also an "electric corporation" for the purposes of the TCL. Moreover, the Town states that the PSC has recently ruled that under the PSL all developers of Article X facilities are "electric corporations," regardless of business form.(31)

Furthermore, the Town contends that it is essential to construe the term "corporation" as used in the TCL to include Brookhaven Energy in order to assure that all business entities that generate electricity for the public have parallel privileges and obligations under the TCL regardless of their organizational format.

In addition, the Town concludes that Brookhaven Energy should be viewed as a corporation because it is part of a world-wide corporate empire, an affiliate of a corporation, American National Power, Inc. (ANP), which is Brookhaven Energy's corporate general partner and a wholly-owned subsidiary of International Power, PLC (International Power). In fact, the Town maintains that Brookhaven Energy's web-site portrays the Project as belonging to ANP, and proclaims that the limited partnership, Brookhaven Energy, will merely "finance the facility."

International Power's press releases, the Town continues, make no distinction between itself and Brookhaven Energy, and International Power's August 17, 2000, release claims that it is the applicant herein:

International Power submitted the application for their proposed energy facility with the Siting Board, as required under Article X.

"The New York Siting Board's ruling puts us a step closer to providing Long Island with a clean and affordable new source of electric power," said Peter Giller, International Power's Chief Executive Officer." We are planning to begin construction of Brookhaven in the third quarter of next year and expect to have the plant in service by the end of 2004," he added.

According to the Town, Brookhaven Energy's corporate character is further evidenced by the fact that a vice-president of ANP operates Brookhaven Energy and uses ANP's letterhead for Brookhaven Energy's correspondence.

For all of these reasons, the Town concludes that for purposes of the TCL, Brookhaven Energy is an "electric corporation" because its purpose is to provide electricity in New York, its general partner is a corporation, and it is but a small part of a vast world-wide network of electric corporations.

Accordingly, the Town maintains that Brookhaven Energy is not a "private applicant" within the meaning of §1001.2(d) of the Siting Board's regulations, its application for the Project is totally deficient because site alternatives are not discussed as required by PSL §164(l)(b), and the Siting Board is unable to make the required findings under PSL §168.

DPS Staff argues that Brookhaven Energy is a private applicant because it will not provide electricity to the public, and it is not an electric corporation for purpose of the TCL. DPS Staff notes that the Court of Appeals in Cellular Tel. Co. v. Rosenberg, 82 NY2d 364 (1193) set forth the necessary characteristics of a public utility. The Court determined that the characteristics include: (1) the essential nature of the services offered which must be taken into account when regulations seek to limit expansion of facilities which provide the services, (2) operation under a franchise, subject to some measure of public regulations, and (3) logistic problems, such as the fact that the product of the utility must be piped, wired, or otherwise served to each user, the supply must be maintained at a constant level to meet minute-by-minute need and the user has no alternative source and the supplier commonly has no alternative means of delivery.

According to DPS Staff, Brookhaven Energy would be providing electricity in a non-monopoly electric market, and while ultimate receipt of electric service is essential, customers on Long Island are served by LIPA and not from entities such as Brookhaven Energy. Next, DPS Staff notes that Brookhaven Energy can not be required to provide electricity to the public. It has no statutory obligation to operate its facility. Evidence of this fact, DPS Staff states, can be found in the PSC's determination in its Athens decision where it found that Athens is exempt from obligations under Article 2 of the PSL to serve retail residential customers because it is a wholesale generator.(32) Inasmuch as the PSL, PSC decisions, or court cases do not require Brookhaven Energy to provide electricity to the public, DPS Staff claims Brookhaven Energy cannot be deemed an "electric corporation" formed to provide electricity to the public under the TCL.

With respect to the Town's assertions that Brookhaven Energy is an electric corporation, DPS Staff points out that TCL §10 defines an "electric corporation" with the words "[a]n electric corporation is a corporation . . . " By contrast, DPS Staff notes, PSL §2(13) defines an "electric corporation" with the words "[t]he term electric corporation includes every corporation, company, association, joint-stock association, partnership and person . . ." (emphasis added). This difference in usage, DPS Staff reasons, evidences a difference in legislative intent, for if the legislature had wanted the TCL to apply to partnerships, it could have used a broader definition as was set forth in the PSL. As it did not do so, DPS Staff states, partnerships, such as Brookhaven Energy, do not fall within the definition of "electric corporation" contained in the TCL.

Brookhaven Energy responds that it is a private applicant without the power of eminent domain, it is not a corporation, and the Town's "piercing the corporate veil argument" should be rejected. As set forth above, TCL §10 states that an electric corporation is a corporation "organized to manufacture, to produce or otherwise acquire, and supply for public use electricity . . ." (emphasis supplied). According to Brookhaven Energy, the Town conveniently has ignored the word "and" in the definition of "electric corporation" under the TCL §10.

Brookhaven Energy asserts it will not both generate or acquire electricity and supply it directly for public use; on most of Long Island, LIPA fulfills this latter role. Consequently, Brookhaven Energy believes it is not an "electric corporation" as that term is used under the TCL, and therefore does not have the power of eminent domain.

With regard to the arguments that Brookhaven Energy should be considered a corporation, Brookhaven Energy states that under TCL §10, an "electric corporation is a corporation . . ." and there is no mention of limited partnerships. Similarly, it maintains, TCL §2 states that a "transportation corporation shall be . . . an electric corporation" and does not mention limited partnerships. Most notably, according to Brookhaven Energy, TCL §4 states that the "business corporations law" applies to a "corporation" formed under the TCL; again there is no mention of New York's "limited partnership law." Finally, Brookhaven Energy argues TCL §11(3-a) affords the right of "such corporations," not limited partnerships, to exercise the right of eminent domain. The Town's attempt to overcome this flaw by referencing the term "electric corporation" in the PSL is inappropriate, according to Brookhaven Energy, because the use of a term under one statutory scheme is not binding and is not even indicative as to the meaning of the same term under another statutory scheme.(33)

Next, Brookhaven Energy claims that the language cited from its web site and the Town's claim regarding ANP or International Power's control over Brookhaven Energy, do not support the Town's "piercing the corporate veil" argument. According to Brookhaven Energy, it must be shown that the owners exercised complete domination over the subject company, and that such domination was used to commit fraud or a wrong against the plaintiff and that the plaintiff suffered injury.(34)

Without acknowledging that International Power or ANP exercises complete domination over Brookhaven Energy, it claims that the Town can point to no wrong committed against the Town by Brookhaven Energy, nor any injury the Town has suffered as a result. Brookhaven Energy adds that the district in which the Project would be located has been rezoned by the Town to expressly allow electric generating facilities. Thus, the applicant suggests that any harm or injury that the Town has suffered as a result of some corporate trick perpetuated by Brookhaven Energy is difficult to grasp.

Lastly, Brookhaven Energy cites what it considers binding legal precedent established in Citizens for the Hudson Valley v. NYS Board on Electric Generating Siting and the Environment(35), (Athens) in which the Third Department expressly upheld the Siting Board's "determination that Athens Generating Company, LP was not required to describe and evaluate alternative sites pursuant to Public Service Law §164(1)(b)." "To the contrary," the Court held, "we conclude that the Siting Board rationally determined that a private applicant, lacking the power of eminent domain, cannot be required to present alternative sites that it neither owns nor has an option to purchase."(36) In order to reach this conclusion, Brookhaven Energy reasons, the Third Department, by necessity, had to find that Athens Generating Company - a limited partnership - did not have the power of eminent domain.

As noted above, TCL §10 requires a corporation to manufacture or otherwise acquire electricity and to supply that electricity for public use. It is important to note that the statute specifies that both operations be present in order to be defined as an electric corporation. Setting aside the form of the business entity, corporation or limiting partnership, we conclude that Brookhaven energy would be engaged in the production of electricity but not retail supply or delivery. Consequently, Brookhaven Energy is not an electric corporation within the meaning of TCL §10 and is not entitled to exercise the power of eminent domain, and is therefore a private applicant.

Having found that Brookhaven Energy is a private applicant, we find no reason to deviate from the precedent established in Athens. As set forth above, a private applicant, in this instance Brookhaven Energy, cannot be required to present alternative sites that it neither owns nor has an option to purchase.

Shoreham Site

The Town requests an opportunity to develop and offer affirmative testimony on the Shoreham site as an alternative to development of the Project at Brookhaven Energy's proposed site in Yaphank. According to the Town, its evidence on the Shoreham site would include information on the environmental, technological and economic suitability of Shoreham, including the visual impacts of the proposed facility at Shoreham; availability of land at Shoreham; environmental, technological and economic shortcomings of the proposed Yaphank site as compared to Shoreham; and the benefits to the public with respect to back up generating possibilities at Shoreham compared to Yaphank.

A denial of its request for the opportunity to develop and submit evidence as to the relative suitability and preferability of the Shoreham site as compared to the proposed site, the Town argues would be reversible error. The Town bases its belief on the Appellate Division's decision in Athens, which recognized that the Siting Board has allowed the intervening citizens' group to offer evidence of alternative sites on the issue of whether the plant is in the public interest.

DPS Staff supports the Town's request for an opportunity to provide evidence on alternative sites, including the Shoreham site.

Brookhaven Energy opposes the Town's request and states that the Town has misinterpreted the Athens decision. There, Brookhaven energy explains, the Third Department first concluded that the applicant was not required to present evidence on alternative sites; then, the Court noted in passing, that the Siting Board allowed the intervenor to present evidence on alternative sites.(37) According to Brookhaven Energy, this is clearly dicta and cannot be considered binding.

Brookhaven Energy supports its interpretation with the following rationale: If Article X does not require a private applicant to address alternative sites over which it has no control in its Article X Application, then, by logical extension, "other" sites cannot be considered material and relevant to the proceeding. Brookhaven Energy states that the latitude extended to intervenors to present evidence on alternative sites and essentially force Brookhaven Energy to defend itself against arguments that these sites are more appropriate than the Project site would effectively nullify any determination that a private applicant may limit consideration of alternatives sites to those it controls. Finally, Brookhaven Energy maintains that, if intervenors believe that the Project site is inappropriate for development as an electric generating facility, then they should present their case on the merits of the Project site itself, without resort to comparison with other sites that the applicant is not required to address.

In a Siting Board's Athens order, it stated that "[a] full reading of PSL §§164(1)(b), 167(4) and (5), and 168(2)(c) and (e) suggests alternative sites need not be considered under PSL §167(4) in cases with private applicants," and that the examiner is not obligated to entertain evidence about alternative sites.(38) Furthermore, the Siting Board in its opinion and order even set forth a guideline to be followed in future issues conferences:

Where the applicant does not have alternative sites for its facility under consideration, we would require evidence that some greatly superior site is available that should (and may) be used instead for such a generating plant, before we would consider "alternative sites" to be a material issue.(39)

Inasmuch as this directive was not rejected by the court, we will follow it here. Two important considerations must be weighed in the instance case: the availability of an alternate site and the superiority of it. The Town has demonstrated neither. At the prehearing conference, the Town stated its belief that the Shoreham site is available, and committed to affirm its belief. To date, no affirmation has been received from the Town. In addition, the Town did not assert that the Shoreham site was a "greatly superior site." No demonstration was presented that would support an investigation of the Shoreham site because it was far better suited or because it would resolve a significant problem with the applicant's primary site. Consequently, the Town and other parties will not be allowed to present evidence on the Shoreham site in the instant proceeding.

Discovery of Alternate Sites

In Brookhaven Energy's Preliminary Scoping Statement (PSS) (§3.4 at p. 3-5), the applicant states that the Project site was chosen as a result of a "vigorous site selection process." Because of the competitive nature of the industry, Brookhaven Energy limited the discussion to the methodology employed and did not identify specific sites.

The Town requested from the applicant the names and locations, among other things, of the sites evaluated and the basis for rejection of each site. Brookhaven Energy refused to divulge the information on the grounds that the information is commercially sensitive. The Town seeks to compel Brookhaven Energy to disclose the requested information.

According to the Town, PSL §163(1)(e) states that the PSS should contain a discussion of "reasonable alternatives to the proposed facility as may be required by [PSL §164(1)(b)]", which requires that applications contain:

A description and evaluation of reasonable alternative locations to the proposed facility, if any, . . . (emphasis added).

The Town maintains that Brookhaven Energy's reasoning overlooks the plain language of the statute and ignores the words "if any" at the end of the initial clause of PSL §164(1)(b). Brookhaven Energy appears to have concluded that the term "if any" means "none," the Town argues, because it rejected all the potential alternatives that it reviewed. In the absence of an evaluation of the alternative sites considered by Brookhaven Energy in the application, the Town asserts that the Siting Board will be unable to find that the Project is in the public interest, considering its environmental impacts and "reasonable alternatives examined as required by [PSL §164(1)(b)]," (emphasis added).

Brookhaven Energy responds that the Town places far too much weight on words "if any" at the end of PSL §164(1)(b) and in doing so renders the word "reasonable" before "alternative locations" completely meaningless. According to Brookhaven Energy, both the Siting Board and the Third Department have determined that, for private applicants such as Brookhaven Energy, "reasonable" alternative locations are limited to sites under their control. The fact that it undertook an analysis to consider various sites prior to gaining control over one of the sites, Brookhaven Energy contends, is irrelevant. Finally, the applicant states that the words "if any" themselves clearly indicate that, in certain instances (such as a private applicant with control over only one site), there will not be any alternative locations required to be addressed in the Article X application.

As noted above, the Siting Board has established a guideline limiting the introduction of evidence on alternate sites. However, the Town at this point is not seeking permission to introduce evidence, but rather to examine, via discovery, material prepared by Brookhaven Energy. Since the rules for discovery generally favor full disclosure, Brookhaven Energy is directed to make the information available to the Town. If the applicant considers the material commercially sensitive, it may seek trade secret protection in accordance with PSC rules.

"No Action" Alternative

Pursuant to 16 NYCRR §1001.2(c), the Brookhaven Energy's application contains a discussion of a "no action" alternative to the Project. However, LIPA believes the discussion of the "no action" alternative is inaccurate, unreasonably narrow, and one-sided. LIPA disagrees with the discussion of the New York State Energy Plan (NYSEP), the asserted "competitive market economics" of New York State, the asserted "objectives of the New York State legislature, as embodied in Article X of the Public Service Law," and the asserted "economic benefit" the applicant and the Town may experience from the Project. LIPA also claims that there may be environmental impacts of the major transmission system upgrade that the Project will necessitate. LIPA intends to file testimony setting forth a fully developed "no action" alternative which it believe will demonstrate that such alternative is a reasonable one considering all of the Project's impacts.

According to Brookhaven Energy, LIPA's no action alternative is an attempt to introduce LIPA's deliverability issue through the back door. Brookhaven Energy points out that LIPA acknowledges that the issue includes consideration of "major transmission system upgrades" and resultant impacts to ratepayers. Brookhaven Energy firmly believes that the Federal Energy Regulatory Commission (FERC) will find that any reinforcement undertaken by LIPA is LIPA's sole responsibility and would be caused not by the Project's interconnection with the system, but by LIPA's anti-competitive behavior ensuring deliverability of KeySpan Generation, Inc.'s (KeySpan's) units at the expense of all other market participants. The applicant believes that this issue cannot be separated from LIPA's deliverability issue, and therefore must be rejected for adjudication.

Since LIPA would tie its no action alternative to the deliverability issues, which are more fully discussed below, we will not decide this issue here, but rather include it in the discussion on deliverability.

Traffic

According to the Town, traffic is a PSL Article X issue that merits adjudication because the extent and nature of any necessary mitigation, and who would be responsible for the costs of implementing it, are not clearly resolved. To illustrate its position, the Town explains that no mitigation measures have been proposed for the intersection of Sills Road and the LIE, although some mitigation had been proposed for the left-hand turn in the westbound direction from Long Island Avenue to Sills Road. In addition, the Town states that the applicant's modeling analysis assumes new ramps would be added to the east bound side of Exit 66, and to the west bound side of Exit 67 on the LIE, but the application materials cite no basis for this assumption, according to the Town.

The applicant argues, however, that the Town mis-states information presented in the application materials concerning the traffic impact analysis. The applicant asserts that its traffic analysis is thorough, and argues that its proposed mitigation would be adequate. Contrary to the Town's assertion, the applicant contends that the proposed new ramps on the LIE were not assumed as part of its traffic analysis.

If the Siting Board certificates the Project, adverse traffic impacts may result from its construction. Therefore, the Town and other parties may present evidence about whether the applicant's proposed mitigation would minimize potential adverse traffic impacts, and what, if any, additional mitigation should be required.

Potential Visual Impacts

The Town states that its Building Code limits the height of buildings in its designated light industrial zones to 50 feet. Since many elements of the Project would exceed this height limitation, the Town asserts that the applicant's proposal would be visually intrusive. Consequently, the Town objects to Brookhaven Energy's request that the Siting Board waive the local height requirement.

The Town wants the Siting Board to require the applicant to re-evaluate the potential visual impacts of its proposal, at the proposed site as well as at any alternative locations previously considered by the applicant, using the methodology outlined by the US Army Corps of Engineers (the Corps). The Town argues that this visual re-evaluation should include potential impacts associated with the emergency diesel generator and the emergency fire pump engine stack.

Like the Town, YTC and DPS Staff have concerns about the potential visual impacts that the Project may cause. YTC argues that Yaphank is a bucolic, historic community that would be adversely impacted by the construction of the applicant's proposal. Although FAA safety lighting may not be required on the emission stacks, which would be 160 feet high, YTC is concerned that the stacks may need to be painted with bright red and white stripes, like other stacks on Long Island, to prevent small planes and helicopters from crashing into them. To substantiate this concern, YTC points out that Brookhaven's Calabro Airport and the Suffolk County Police Headquarters' Heliport are less than a mile from the site of the proposed facility.

In response to the Town's assertions, the applicant argues that the zoning for the site of the Project allows electric generating facilities, and concludes that the Town's concern about the Project exceeding the local height limit is not an extraordinary situation. The applicant contends that the local height requirement is unduly restrictive due to technological limitations.

Brookhaven Energy objects to the Town's demand to re-analyze the potential visual impacts of the Project. According to the applicant, it provided to the Town copies of all aspects of the visual assessment, and the Town did not respond. The applicant contends that it followed the Corps' procedures for assessing impacts to landscape zones and that the applicant selected viewpoints that were representative of these zones.

Pre-application Stipulation No. 11 outlines the analysis undertaken by Brookhaven Energy to evaluate the potential visual and aesthetics impacts. In §3(d) of Stipulation 11, the applicant agreed to use the Corps' "Basic Procedure" methodology. The results of the applicant's visual analysis are presented in Section 16 of the appliation materials, which also include measures to mitigate potential visual impacts.

We will not require the applicant to re-analyze the potential visual impacts of its proposal. The Town and the other parties, however, may present evidence related to whether Brookhaven Energy complied with the Corps' basic procedure methodology, and whether the applicant's proposed mitigation measures are sufficient to minimize potential adverse visual impacts. The parties are also encouraged to present evidence that supports alternative measures that would further mitigate potential visual and aesthetic impacts.

Noise

The Town and DPS Staff assert there is an issue about whether the Project's construction and operation would comply with the local noise ordinance. With respect to construction, the Town argues that Brookhaven Energy improperly determined the ambient noise levels, and concludes that the results of the applicant's noise analysis are unreliable. The Town asserts a similar objection about potential adverse noise impacts with respect to operations.

Brookhaven Energy wants to address the Town's concerns and hopes to resolve any issues about mitigating potential noise impacts before the hearing.

The application materials confirm that the Town has a noise control ordinance. As determined infra, the Project's compliance with local ordinances, including the local noise code, will be considered in this proceeding. Thus, the Town and DPS Staff will be given an opportunity to address noise impacts in their direct case.

Local Laws

Citing PSL §172(1), Suffolk County Department of Health Services (the County), the Town, and YTC want the Siting Board to authorize the County and the Town to issue the applicable local approvals for the proposed facility. According to the County, the proposed facility must comply with Articles 4, 6, 7 and 12 of the Suffolk County Sanitary Code. These provisions of the Sanitary Code relate to water supply, sewage disposal, and the storage and discharge of toxic and hazardous materials. Although the applicant has not formally filed any applications with the County, these two parties have begun a dialogue about how the Project would comply with these requirements. The County understands that the applicant is committed to complying with the applicable provisions of the Suffolk County Sanitary Code, and that the applicant has expressed a willingness to apply to the County for the necessary approvals.

The Town argues that several provisions of the Town Code apply to the construction and operation of the Project. The Town wants the opportunity to determine whether the proposed facility would comply with the applicable provisions of the Town Code, related to zoning, construction and noise. The Town recognizes, however, that the Siting Board must authorize the Town to issue local approvals, given the preemptive nature of PSL Article X.(40) In the alternative, the Town wants an opportunity at the PSL Article X hearing to show whether the proposed facility is designed to operate in compliance with applicable local laws and regulations as required by PSL §168.2(d). Finally, the Town wants the applicant to establish a fund so that the Town can retain a qualified engineering firm to ensure that the proposed facility would comply with the applicable provisions of the Town Code, if the Siting Board issues the requested certificate.

YTC shares the County's and the Town's concerns about whether the proposed facility would comply with the applicable provisions of the Suffolk County Sanitary Code and Town Code. YTC asserts that the proposed facility would not comply with Article XXIX and §85-309 of the Town Code, and Article 7 of the Suffolk County Sanitary Code.

Brookhaven Energy wants the Siting Board to retain jurisdiction over local approvals. During the pre-application process, the applicant met with the Town's Commissioner of Planning, Environment and Development to discuss compliance with local laws. According to the applicant, the Town initially did not want to issue local approvals. Since the Town's position has changed, however, the applicant is concerned that the Town may unreasonably delay the local approval process, or deny any required approvals. The applicant argues that the review process outlined in 16 NYCRR Part 1003 (Compliance Filings) is the preferred method for the Town to review the Project and to monitor compliance.

Brookhaven Energy argues that YTC does not raise a factual issue requiring adjudication with respect to compliance with local codes. The applicant argues further that the prohibited uses listed in the Town's Building Code at §85-308(A) does not include electric generating facilities. In addition, Brookhaven Energy asserts that Town Code §85-308(B) expressly authorizes electric generating facilities to be constructed in L1 Districts. The applicant adds that it has asked the Siting Board for a waiver from the Town's building height ordinance, rather than seek a variance from this ordinance from the local Zoning Board of Appeals.

PSL §168.2(d) requires the Siting Board to find that a proposed facility is designed to operate in compliance with applicable state and local laws and regulations. This statutory provision allows the Siting Board to grant a waiver from any local regulation, standard or requirement if the Siting Board determines that the local requirement is unreasonably restrictive given the existing technology, or the needs of, or costs to, ratepayers. Finally, this statutory provision requires the Siting Board to provide the local municipality with an opportunity to present evidence in support of the local requirements.

Given the finding that the Siting Board must make pursuant to PSL §168.2(d), and the requirement that the local municipality be provided with an opportunity to present evidence in support of its local requirements,(41) the question of whether the Project would comply with local laws and regulations will be an issue in this proceeding. Prior to the evidentiary hearing, the County and Town shall identify, with specificity, what respective provisions of the County Sanitary Code and Town Code apply to the applicant's proposal. At that time, the County and Town must provide the examiners and the other parties with current and complete copies of the applicable local requirements. During the evidentiary hearing the parties may present evidence about whether the Project would comply with the applicable local requirements, or whether compliance with such restrictions would be unreasonably restrictive given the existing technology, or the needs of, or costs to, ratepayers. Finally, the parties will have an opportunity to present legal arguments in their initial and reply briefs concerning this issue.

The Town cites no legal authority that would authorize the Siting Board to direct the applicant to establish a fund so that the Town could retain a qualified engineering firm to oversee compliance with the applicable provisions of the Town Code. The Town has requested and received intervenor funding to review the application materials. Additional funding may be awarded upon request, as provided for by PSL Article X and the applicable regulations, to develop the record at hearing. No additional funding is available, however, after the Siting Board makes a final determination about whether to certificate a proposed facility.

Public Interest

LIPA's Issues

LIPA believes that the public interest standard set forth in PSL 168(2)(e) requires a review of the transmission system impacts of Brookhaven's Energy Project. LIPA wants to demonstrate that Brookhaven Energy should fund the construction of a new transmission circuit or that its application should be rejected.

LIPA observes that the Project as proposed would interconnect at approximately the mid-point of the existing Holbrook-Brookhaven 138kV transmission line. If this 580 MW Project were connected at that point, which is east of the Holbrook Substation, LIPA claims it would "bottle" (i.e. render undeliverable) an approximately equivalent amount of existing and already planned generation resources (capacity, energy, and ancillary services), which are under long term contract to LIPA, that are also located east of this interface. LIPA emphasizes that in the absence of the Project, all of the other generation would be deliverable. The limitations of the transmission system in this area, LIPA notes would preclude simultaneous delivery of the output of these existing and previously planned resources and the output of the Project to the load centers located west of the Holbrook interface. To alleviate this situation, LIPA claims that Brookhaven Energy should be required to fund the cost of a new transmission circuit connecting the Project's transmission exits at the Holbrook substation with a LIPA substation located to the west of Holbrook.

If the Project were constructed without the transmission system reinforcement, LIPA points out the resultant undeliverability may affect the continuing accreditation of LIPA's locational installed capacity (ICAP) resources, thereby requiring LIPA to procure replacement ICAP at significant expense. In addition, LIPA fears that the Project's bottling effects may cause Long Island to be divided into two zones, each of which would have a separate locational ICAP requirement. While the NYISO has not yet developed rules defining how splitting a region into two zones would affect existing ICAP, LIPA is concerned that such rules could result in LIPA having to procure additional capacity to serve its load located west of the Holbrook interface (so as to satisfy the locational ICAP requirement in the western zone) while at the same time significantly reducing the value and usefulness of its capacity located east of the Holbrook interface.

In addition, LIPA seeks to present evidence on other impacts and potential modifications to its transmission and subtransmission facilities that would be necessary if the Project were constructed, including, modifications to the Calverton to Riverhead 69kV line and replacement of numerous circuit breakers. Although Brookhaven Energy's application mentions these modifications, LIPA notes it is silent as to whether the applicant proposes to fund them.

According to LIPA, it should be allowed to demonstrate the impacts that the Brookhaven Energy Project would create because regulations (16 NYCRR §1001.1) explicitly require an Article X application to include "a discussion of the benefits and detriments of the proposed facility on ancillary services and the electric transmission system, including impacts associated with reinforcements and construction." These are the very issues LIPA claims it seeks to litigate here.

In addition, LIPA cites the Siting Board's decisions in Athens for the proposition that in-state transmission impacts are Article X "public interest" issues.(42) According to LIPA, the public interest should include a review of impacts on socioeconomic conditions, competition, market power, and consistency with NYSEP. With respect to the socioeconomic impacts; LIPA asserts that the application discusses energy cost savings,(43) but does not mention the transmission system reinforcement costs that the applicant apparently would have LIPA and its ratepayers bear. Alternatively, if the Project is constructed and run without the necessary transmission system reinforcement, LIPA claims adverse impacts would be incurred because generation under contract to LIPA located east of the Holbrook interface (for which LIPA and its customers are paying capacity costs) would be rendered undeliverable.

Contrary to the applicant's claim that the Project would promote competition, LIPA intends to file testimony demonstrating that the Project would result in destructive competition in New York because the Project, without providing for the transmission system reinforcement necessitated by it, would bottle existing generation resources in the State and would add little or no additional net generation to the State's supply portfolio. In this regard, LIPA seeks to demonstrate that the State's pro-competition energy policies cannot be distorted to mean that a developer can decide to locate a very large generation project at a transmission-constrained site and simply expect the interconnecting utility's customers to subsidize the costs of constructing the system upgrades that are necessary to deliver the facility's additional output to the load.

According to LIPA, the Siting Board in Athens has already found that the issue of whether a particular project "will actually foster and promote competition" in "New York" is "one of the ultimate issues to be decided by [the Siting] Board under §168."(44)

As to the market power issues, LIPA would present evidence showing that construction of the Project without transmission reinforcement could cause the NYISO to create a new monitored interface and divide Long Island into two zones at the Holbrook transmission interface. Splitting the existing Long Island zone into two, LIPA states, would enhance the ability of all ICAP suppliers to exert market power on Long Island because existing and new capacity in either zone would only have to compete with generating units in their own zone. Inasmuch as there would be fewer players in each zone, each supplier would have a larger share of the market and thus increased market power in each ICAP market. Furthermore, establishing a new monitored interface at Holbrook, LIPA argues, would reduce statewide and Long Island operating reserves (a component of ancillary services), thereby blocking existing generating units from supplying operating reserves to the rest of Long Island and the State.

Finally, LIPA intends to file testimony demonstrating that the Project is not consistent with NYSEP due to Brookhaven Energy's failure to provide for the transmission system reinforcement necessitated by the Project and the Project's related adverse impacts on LIPA and its ratepayers. According to LIPA, NYSEP calls for strategies that foster "the development, maintenance, and improvement of an adequate energy supply infrastructure throughout the State" (NYSEP pp. 1-114).

Brookhaven Energy's Position

Brookhaven Energy argues that the Siting Board's jurisdiction to consider LIPA's requests for relief is preempted by Part II of the Federal Power Act (FPA), 16 U.S.C. §§824-825r, which gives FERC exclusive jurisdiction over these issues. Accordingly, the applicant asserts, LIPA's claim that the cost of any upgrades to its transmission system must be directed to FERC and not to the Siting Board. While Brookhaven Energy concedes that section 201(f) of the FPA, 16 U.S.C. §824(f), deprives FERC of jurisdiction over LIPA's charges for transmission service, the applicant notes that LIPA is no longer the entity providing transmission service to customers using its system. Instead, Brookhaven Energy points out that since December 1, 1999, transmission service on LIPA's system - like all other transmission services in New York State - have been provided by the NYISO under the terms of NYISO's Open Access Transmission Tariff (OATT) filed with and accepted by FERC.

In addition, Brookhaven Energy observes that FERC made it clear to LIPA from the outset that LIPA's non-jurisdictional status would not apply to services provided on its system once LIPA turned over control of its transmission system to the NYISO:

LIPA seeks assurance that should it join the New York ISO, it is not relinquishing its authority to set its own rates. LIPA notes that in approving reciprocity tariffs the Commission has not required such relinquishment.

The transmission services provided by the New York ISO are jurisdictional, notwithstanding the fact that some non-public utility entities such as LIPA may elect to join the ISO. Accordingly, even though the New York ISO transmission rates would include recover of LIPA's costs if LIPA were to join the ISO, the New York ISO rate nevertheless would be subject to our review under Sections 205 and 206.(45)

Moreover, Brookhaven Energy argues that the United States Supreme Court recognized in Federal Power Commission v. Southern California Edison Co., 376 U.S. 206, 216 (1964), that the FERC's jurisdiction under the FPA is "plenary." In addition, Brookhaven Energy states that, in Western Massachusetts Electric Co., 61 FERC ¶ 61,182(1992), FERC held that its plenary jurisdiction extended to charges for the recovery the costs of transmission upgrades required by the connection of a new generating facility to the utility's transmission system:

[A]s we found in AMP-Ohio, all charges assessed to recoup the cost of facilities used to provide transmission service are jurisdictional whether those charges are assessed as a lump sum charge or as a series of payments over the life of the service. The timing of the payments is immaterial to our jurisdictional determination. WMECO cannot avoid regulatory scrutiny of its charges merely by structuring the agreements to require prepayment of those charges prior to the commencement of service.(46)

According to Brookhaven Energy, FERC also asserted in Western Massachusetts Electric Co. that any state law or order purporting to allocate responsibility for such costs was preempted by the FPA:

When a utility transmits QF power in interstate commerce, as WMECO will do here, a Commission-jurisdictional transaction of electric energy in interstate commerce and over agreements affecting or relating to such service (and the rates for such service) are subject to the Commission's exclusive jurisdiction and any attempt by a state authority to exercise jurisdiction over such service and agreements (and rates) would be ultravires.(47)

As far as the interconnections are concerned, Brookhaven Energy cites Tennessee Power Co., 90 FERC ¶61,238 (2000), in which FERC ruled that interconnection is an element of transmission service that is available separately from energy delivery services and that utilities such as NYISO are already required to provide such interconnection services under the provisions of their OATTs:

Interconnection is an element of transmission service and is already required to be provided under our pro forma tariff. This is true whether the interconnection request is tendered concurrently with the request for transmission service or in advance of a request for a specific transmission service.(48)

With respect to the instant proceeding, Brookhaven Energy emphasis is that section 27 of the NYISO OATT specifically provides that the cost of any new facilities required to provide firm transmission service to any new customer shall be paid by the transmission customer "to the extent consistent with Commission policy." NYISO OATT, Original Sheet No. 154 (Effective September 1, 2000). According to the applicant, NYISO has recently submitted proposed changes to the NYISO OATT Attachment S that would establish a comprehensive procedure for the allocation of interconnection costs.(49) Accordingly, Brookhaven Energy states there can be no doubt that FERC has exclusive jurisdiction over the recovery of transmission system upgrade costs and in such circumstances, any Siting Board order purporting to require Brookhaven Energy to pay the costs of any upgrades to LIPA's transmission system required as a result of the construction of the Project would constitute an impermissible and invalid invasion of the FERC's plenary jurisdiction under the FPA.

Regarding LIPA's suggestion that the Siting Board should reject Brookhaven Energy's application in order to avoid those potential rate impacts, the applicant maintains that this action would also impermissibly invade FERC's exclusive jurisdiction over transmission services and rates. What LIPA is asking the Siting Board to do, Brookhaven Energy claims, is to speculate that FERC's allocation of the costs of any required transmission upgrades between Brookhaven Energy and other transmission customers may be unreasonable and to act preemptively to deprive FERC of the opportunity to adopt that allegedly unreasonable allocation of upgrade costs. Brookhaven Energy notes that this issue was settled in Nantahela Power & Light v. Thornburg, 476 U.S. 953 (1986), in which the United States Supreme Court expressly rejected the claim that state authorities may find FERC-approved rates to be unreasonable:

Once the FERC sets such a rate, a State may not conclude in setting retail rates that the FERC-approved rates are unreasonable. A State must rather give effect to Congress' desire to give FERC plenary authority over interstate wholesale rates, and to ensure that the States do not interfere with this authority.(50)

Consistent with its position in the instant case, Brookhaven Energy via its general partner, ANP, has filed a complaint with FERC, which is directly related to the issues that LIPA seeks to adjudicate in this proceeding. Brookhaven Energy's complaint is against KeySpan and LIPA and the Long Island Lighting Co. d/b/a LIPA. In that complaint, ANP points out that LIPA's power supply agreement with KeySpan, which is filed with FERC as KeySpan's Rate Schedule No. 1, obligates LIPA to upgrade its transmission system to alleviate any transmission constraint on LIPA's system that impact KeySpan's existing generating units, even if the costs of such expansion substantially exceed the benefits to LIPA's customers. ANP notes that this contract requirement provides LIPA with a substantial incentive to obstruct any developers seeking to compete with KeySpan's units on Long Island and that LIPA has in fact acted on this incentive. Accordingly, ANP has asked FERC to reform KeySpan's Rate Schedule No. 1 to eliminate this contract provision and to instruct LIPA that, as long as transmission services on its system are provided by the NYISO, FERC policy prohibits LIPA and/or NYISO from requiring Brookhaven Energy to pay the costs of a transmission upgrade that benefits all users of LIPA's transmission system. Brookhaven Energy calls this contract provision imprudent and anti-competitive.

As far as LIPA's reason for being allowed to present its evidence is concerned, Brookhaven Energy draws a distinction between the deliverability upgrade, which are discussed above, and the upgrade set forth in the NYISO approved Interconnection Study, which would be needed to ensure the Project's safe and reliable interconnection with the transmission system. In short, Brookhaven Energy agrees it must pay for the latter facilities that would be required to connect the Project to LIPA's system (the generator leads) and for system reliability upgrades that do not increase transmission capacity. Since the relevant upgrades have been noted in the NYISO-approved Interconnection Study, Brookhaven Energy asserts that there is no factual issues to adjudicate.

Brookhaven Energy claims that LIPA used the guise of socioeconomics to restate the impacts to ratepayers and accreditations of LIPA's ICAP, which the applicant asserts are entrenched in the deliverability issue to be decided by FERC. Likewise, Brookhaven Energy states that LIPA's concern about consistency with the NYSEP relates directly to its deliverability claim (transmission system reinforcement), which the applicant believes falls under FERC jurisdiction. Parenthetically, Brookhaven Energy comments that, since the Project has been selected pursuant to an approved procurement process it need not show further consistency with the NYSEP (See PSL §168(2)(a)), and thus, this proposed issue is jurisdictionally deficient under Article X itself as well.

In the same vein, Brookhaven Energy characterizes LIPA's competition arguments as a repackaging of the deliverability issue, which properly falls under FERC's jurisdiction. According to the applicant, this is demonstrated by LIPA's statement that in order for the Siting Board to determine that the Project will "actually foster and promote competition in New York within the public interest standard of Section 168(2)(e), the applicant must demonstrate that is has mitigated the Project's adverse impacts on the continued deliverability of existing New York generation resources."(51) This statement, Brookhaven Energy says, not only misconstrues the finding that the Siting Board must make and ignores the fact that existing constraints on the New York electric transmission bulk system are addressed as a matter of course by NYISO through its redispatch procedures, but it is nothing more than a restatement of the deliverability issue. In fact, Brookhaven Energy's emphasis that this is exactly how competition is supposed to work,(52) and PSC has already determined that displacement of older, less efficient, more polluting facilities is a reality of a competitive market.(53)

LIPA's Response

LIPA responds by noting that FERC does not have exclusive jurisdiction for several reasons. First, contrary to Brookhaven Energy's contention, LIPA claims it did not turn over operational control of its transmission system to NYISO. According to LIPA, the operative document that gives the NYISO control of the facilities of the transmission owners in New York is the NYISO-Transmission Owner (TO) Agreement. Unlike the facilities of investor-owned utilities that were turned over to the operational control of the NYISO, LIPA notes all of its transmission facilities were included in Appendix A-2 to the NYISO-TO Agreement and are to be operated in coordination with, but not under the direct operational control of, the NYISO.(54) LIPA explains that, had it turned over operational control of its transmission facilities to the NYISO, it could have jeopardized the tax-exempt status of some or all of the billions of dollars of its tax-exempt debt.

Second, LIPA maintains that in conjunction with the recent filing by NYISO establishing a new Attachment S, NYISO specifically stated that the "NYISO Minimum Interconnection Standard does not impose any deliverability test or deliverability requirement on [a] proposed project [and][c]onsequently, the proposed rules do not address the allocation of responsibility for the cost of new facilities associated with the delivery of power across the Transmission System . . ." Furthermore, LIPA states that the applicant's reliance on Section 27 of the NYISO OATT is both erroneous and ironic because that provision addresses only transmission system upgrade costs that are identified as a result of a system impact study that is requested by a transmission customer in connection with a request for firm point-to-point transmission service.(55)

Third, LIPA refers to Section 19B.3 of the NYISO OATT, which it claims recognizes that the issue of responsibility for transmission system upgrade costs will be addressed in an interconnection agreement between a generator and the transmission owner, not the NYISO. Inasmuch as LIPA is a State governmental entity, LIPA asserts it will not file an interconnection agreement with FERC under the FPA because LIPA is not a "public utility" subject to the filing requirement and rate review of Section 205 of the FPA (16 U.S.C. §824d, and See 16 U.S.C. §824(f)). Thus, LIPA maintains, FERC would not address the issue of cost responsibility for the major transmission system upgrade made necessary by the Project.

Fourth, LIPA states that the applicant's argument that FERC has plenary jurisdiction over LIPA's transmission rates simply is incorrect. According to LIPA, Brookhaven Energy selectively cited a FERC decision, which seemed to support its position. The missing language is set forth in the italicized portion of the FERC decision set forth below.

LIPA seeks assurance that should it join the New York ISO, it is not relinquishing its authority to set its own rates. LIPA notes that in approving reciprocity tariffs the Commission has not required such relinquishment. [fn. omitted].

The transmission services provided by the New York ISO are jurisdictional, notwithstanding the fact that some non-public utility entities such as LIPA may elect to join the ISO. Accordingly, even though the New York ISO transmission rates would include recovery of LIPA's costs if LIPA were to join the ISO, the New York ISO rate nevertheless would be subject to our review under Sections 205 and 206. At the same time, LIPA can be assured that we are committed to fostering regional transmission arrangements that will embrace public utility and non-public utility entities alike and would not lightly take actions that might deter entities like LIPA from participating.(56)

LIPA notes that the other cases cited by Brookhaven Energy involve "public utilities" as defined under the FPA. LIPA concedes that those entities are required to file interconnection agreements with FERC setting forth the cost responsibility for interconnection and transmission system upgrade costs. However as discussed above, LIPA asserts it is statutorily excluded from the definition of "public utility" pursuant to 16 U.S.C. §824(f), hence, these cases are inapposite.

Fifth, LIPA emphasizes that the mere fact that ANP recently filed a complaint against LIPA and KeySpan with FERC does not demonstrate that the Siting Board lacks jurisdiction over the transmission system impact issues raised by LIPA. In this regard, for example, the complaint was filed under Sections 206 and 306 of the FPA (16 U.S.C. §§824e, 825e). However, Section 206, LIPA observes, extends only to "public utilities" and licensees of hydroelectric projects. According to LIPA, neither the Long Island Power Authority (nor its wholly-owned subsidiary, LIPA) are such "public utilities," (See 16 U.S.C. §824(f)) and neither is a licensee of a hydroelectric project. Thus, LIPA argues, the complaint cannot invoke FERC jurisdiction that does not exist.

DPS Staff's Position

DPS Staff maintains that the Siting Board need not resolve LIPA's issues relating to transmission upgrades and specific associated costs, whether they are related to upgrades or redispatch costs, because these issues are already being raised at FERC.(57) Furthermore, Staff observes that the provisions of the NYISO OATT specifically address transmission upgrades and cost sharing for customers wishing to interconnect to the electric transmission system. Since Brookhaven Energy has provided a clear discussion on jurisdiction of FERC on issues relating to electric interconnection, DPS Staff sees no need to provide additional analysis. As such, it is DPS Staff's position that the issues in this proceeding should not focus on those issues contained in both the complaints filed by Brookhaven Energy at FERC and the NYISO OATT. Nonetheless, Staff argues that the impact of these issues on the public interest analysis required by PSL §168 should not be ignored. Staff concludes that it is necessary to develop a record that incorporates an analysis of the effects on electricity prices on Long Island, both with and without potentially necessary transmission equipment upgrades and the compensation of redispatch costs, assuming the Brookhaven Energy Project operates.

Such an analysis, DPS Staff explains, would provide the Siting Board with information regarding the impacts of the Brookhaven Energy Project on electricity prices on Long Island regardless of the outcome of contested transmission and redispatch issues by FERC. According to DPS Staff, that interest is one that is encompassed under the required public interest standard of PSL §168.

Discussion

There may be a flaw in Brookhaven Energy's analysis concluding that LIPA's issues concerning the deliverability and interconneciton rules are within the exclusive jurisdiction of FERC. As LIPA notes it has not turned over "control" of its transmission facilities to the NYISO, but has agreed to operate them "in coordination with," the NYISO.(58) Thus, FERC may not have acquired jurisdiction by virtue of LIPA's turning over "control" of its transmission facilities to the NYISO. In addition, Brookhaven Energy concedes that in other respects LIPA is a state governmental entity whose transmission service is not subject to FERC regulation. Although we recognize that FERC may not have exclusive jurisdiction over LIPA's transmission services, we do not agree with LIPA that the Siting Board should address issues relating to the need for or environmental impacts of the actual transmission upgrade, or the allocation of its cost between LIPA and Brookhaven Energy. The determination of the need for and environmental impacts of an additional transmission line and the authorization to build it rests with the PSC pursuant to Article VII of the PSL. In addition, DPS Staff notes that NYISO has filed an OATT specifically addressing transmission upgrades and cost sharing for customers wishing to interconnect to the electric transmission system. We will rely on LIPA's commitment to operate its transmission system "in coordination with" the NYISO to conclude that LIPA's charges for transmission service will comply with the NYISO OATT once it is approved by FERC. Even if LIPA is not obligated to comply, such issues would be subject to negotiation, or the jurisdiction of the NYISO, or the PSC. More importantly, the issues are beyond the jurisdiction of the Siting Board because it is limited to granting certificates for major electric generating facilities and interconnections "that are not subject to review under article seven of [the PSL]."(59)

We also agree with DPS Staff that the public interest standard in Article X requires the Siting Board to consider the overall effect of the Project on electric prices on Long Island. Thus, we will allow LIPA and other parties to present evidence on the overall impacts that the Brookhaven Energy Project would have on Long Island's electric prices, competition, market power, and socioeconomic conditions. In addition, to demonstrate the overall impacts we will allow LIPA to present a "no action" alternative for comparison purposes. Finally, since Brookhaven Energy has claimed that its Project is consistent with NYSEP, we will allow LIPA to rebutt this claim.

Decommissioning

According to the Town, the current decommissioning plan is not adequate. The Town argues that the proposed six million dollar plan would not be sufficient to cover the cost of site restoration at the end of the Project's estimated useful life, which is about 40 years. The Town wants a more comprehensive decommissioning plan that would not only ensure complete site remediation in 40 years, but which would also cover the costs associated with remediating the site if construction of the Project were begun but not completed, and if the proposed facility were prematurely abandoned before the end of its useful expected life. DPS Staff also raises similar concerns about the decommissioning fund.

Brookhaven Energy has expressed a willingness to address this concern. If, however, a satisfactory agreement cannot be developed, then the parties may develop a record about this issue at hearing.

Renewed Funding Request

By document dated October 5, 2001, the Town renewed its request for intervenor funding. Specifically, it requested $37,050 for task two, which would fund an analysis of the Shoreham site. This site has been proffered by the Town as an alternative to the Brookhaven Energy's proposed site for the Project.

As set forth above, this ruling precludes the introduction of evidence on the Shoreham site as an alternative. Therefore, no funding for this task will be authorized.

The Town also asks for reconsideration of the September 13, 2001 ruling, which denied its request for funding for G.S. Peter Bergen on the grounds he is providing legal services.(60) The Town essentially reiterated its prior funding requests; it does not set forth new or changed circumstances that would support a reexamination of the ruling. Therefore, the prior ruling will not be modified with respect to this item.

Schedule

At the prehearing conference of October 11, 2001, the following schedule was established:

Event Date
Prefiling of intervenor testimony December 13, 2001
Prefiling of rebuttal testimony December 27, 2001
Hearings commence January 7, 2002
Initial Briefs due February 12, 2002
Reply Briefs due February 21, 2002

The dates for filing documents are in-hand dates. However, parties may satisfy the time requirement by e-mailing the documents provided a follow-up hard copy is sent by mail. Also, parties are reminded that rebuttal testimony should respond to the testimony filed by the intervenors on December 13, 2001 and may not be received into evidence if it raises new unresponsive issues.

_____________/s/_____________
WALTER T. MOYNIHAN

_____________/s/_____________
DANIEL P. O'CONNELL

1. 6 NYCRR §624.4(c)(4).

2. §624.4(c)(2). Also see 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.

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

4. 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.

5. 6 NYCRR §624.4(c)(3).

6. See Application Materials, Vol. 2, Appendix Z.

7. See 6 NYCRR §624.4(c)(1)(i). Tr. 70-71.

8. Tr. 71.

9. The PSD program is a pre-construction review of any new or modified air emissions source to ensure that air quality is not degraded beyond established increments.

10. The regulatory criteria for new or modified emission sources in non-attainment areas are outlined in 6 NYCRR Subpart 231-2 (Requirements for Emission Units Subject to the Regulation on or after November 15, 1992). For non-attainment review, 6 NYCRR Subpart 231-2 is part of a federally approved state permit program.

11. See 6 NYCRR §231-2.6 and §231-2.12, Table 2.

12. Tr. 83-85.

13. Tr. 76.

14. Tr. 70, 99-101.

15. Tr. 96-99.

16. South Camden in Action v. New Jersey Dept. of Environmental Protection, 145 F. Supp. 2d 446 (D.N.J. April 19, 2001)(No. CIV.A. 01-702), and South Camden in Action v. New Jersey Dept. of Environmental Protection, 145 F. Supp. 2d 505, 31 Envtl. L. Rep. 20,675 (DNJ May 10, 2001)(No. CIV.A. 01-702).

17. Tr. 72, 101.

18. Tr. 84-88.

19. Tr. 81-82.

20. Memorandum issued October 21, 1997 by John S. Sietz, Director of the EPA Office of Air Quality Planning and Standards (MD-10) regarding the interim implementation of new source review requirements for PM2.5.

21. Matter of Consolidated Edison Company of New York, Inc. (East River), DEC Commissioner's Decision, August 16, 2001 (DEC Case No. 2-6206-00012/000021).

22. Tr. 102. PSL Article X Application Materials, Vol.1, §6.7.4.

23. Tr. 94.

24. Tr. 94-95.

25. Tr. 102-103.

26. 6 NYCRR §624.5(d)(ii). Since the Town withdrew its proposed issues conerning the draft air permit, the Town's petition for party status is also denied.

27. 6 NYCRR §624.8(d)(2).

28. Send three copies of any appeal and reply to the DEC associate examiner. Parties who use word processing equipment to prepare the brief and reply must also submit a copy of their appeal and reply to the associate examiner in electronic form on a 3.5 computer disk (double density, not high density) formatted in either WordPerfect or ASCII. As an alternative to submitting a computer disk, parties may file an electronic copy via e-mail to: dpoconne@gw.dec.state.ny.us. The electronic copy sent via e-mail must be formatted in either WordPerfect or ASCII. The parties shall ensure that the transmittal of all papers is made to the DEC associate examiner and all other parties at the same time and in the same manner as transmittal is made to the DEC Commissioner. No submissions by telecopier will be allowed or accepted.

29. YTC also claims that Brookhaven Energy's application is deficient because it does not include an evaluation of alternative sites.

30. 197 Misc. 793; 94 N.Y.S.2d 221 (Co. Ct. Rockland Co., 1950).

31. See Case 99-E-1629, Athens Generating Company, Order Providing for Lightened Regulation (issued July 12, 2000); Case 01-E-0816, Athens Generating Company, Order Authorizing Issuance of Debt (issued July 30, 2001).

32. Case 99-E-1629, Athens Generating Company, LP - Petition for a Declaratory Ruling, Order Providing For Lightened Regulation (issued July 12, 2000).

33. See Simonelli v. Adams Bakery Corp., 2001 WL 1097229 at *1, Sept. 20, 2001 (3d Dept. 2001).

34. See 82 N.Y.2d at 141, 623 N.E.2d at 1160-1161, 603 N.Y.S.2d at 810-11. See also Weiss v. Marjam of Long Island, Inc., 270 A.D.2d 455, 705 N.Y.S.2d 76 (2d Dept.2000).

35. 281 A.D.2d 89,97,73 N.Y.S.2d 532, 537 (3d Dept. 2001).

36. Ibid. 537-538.

37. See Athens, 281 A.D.2d at 97, 723 N.Y.S.2d at 538.

38. Case 97-F-1563, Athens Generating Company, L.P., Order Concerning Interlocutory Appeals (Issued January 28, 1999), p. 13.

39. Case 97-F-1963, supra (issued June 15, 2000) Opinion and Order, p. 100.

40. See PSL §172.1.

41. Also see PSL §166.1(h).

42. Case 97-F-1563, supra, Opinion and Order (issued June 15, 2000), pp. 9, 92.

43. LIPA also believes that the savings and air pollution reductions claimed by the applicant are overstated.

44. Case 97-F-1563, supra, Order Concerning Interlocutory Appeals (issued January 28, 1999), p. 7.

45. Central Hudson Gas & Electric Corp., 86 FERC ¶61,062 at 61,213 (1999) (footnote omitted). FERC reached a similar conclusion in that Order with respect to the Power Authority of the State of New York (NYPA), where it recognized that "the tariff provides that NYPA will file the rates which the ISO tariff will recover for use of NYPA's system with the Commission." Id.

46. 61 FERC at ¶61,682, 61,662 (footnote omitted), citing American Municipal Power-Ohio, Inc., 57 FERC ¶61,358 (1991), reh'g denied, 58 FERC ¶61,182(1992).

47. 61 FERC ¶61,182 at 61,662 (footnotes omitted).

48. 90 FERC ¶61,238, slip op. at 4 (footnote omitted).

49. This case has been assigned Docket No. 1 R01-2967-000 by the FERC.

50. 476 U.S. at 966. See also Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 373 (1988) (following Nantahala).

51. See LIPA Brief at 9.

52. See N.Y. SEP at 1-16 ("competitive markets provide the best means for allocating and pricing energy resources").

53. See Case 94-E-0952, Opinion and Order Regarding Competitive Opportunities for Electric Service, Opinion No. 96-12, (issued May 20, 1996), p. 30 ("It is to the forces of this emerging marketplace that electric utilities must adapt to survive and prosper").

54. Appendix A-1 to the NYISO-TO Agreement is entitled "Transmission Facilities under ISO Operational Control." Appendix A-2 is entitled "Transmission Facilities Requiring ISO Notification."

55. See NYISO OATT, Original Sheet Nos. 133, 154.

56. Central Hudson Gas & Electric Corp., 86 FERC ¶61,062 at 61,213 (1999)(italics supplied).

57. Staff notes that Brookhaven Energy filed a complaint with FERC on October 10, 2001.

58. By letter dated October 23, 2001, Brookhaven Energy disputes four of LIPA's claims and notes the fifth is true but irrelevant. Brookhaven Energy's positions in that letter are not presented here because they would not cause us to change our ruling.

59. PSL §160(2) and PSL §162.

60. Case 00-F-0566, Ruling on Request For Intervenor Funding, (issued September 13, 2001).

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