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Consolidated Edison Company of New York, Inc. (East River) - Decision, August 16, 2001

Decision, August 16, 2001

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

-of-

Applications for: (1) a State Pollutant Discharge Elimination System (SPDES) permit
pursuant to Environmental Conservation Law (ECL) Article 17 and Title 6 of
the Official Compilation of Codes, Rules and Regulations of the State of New York (6 NYCRR)
Parts 750 et seq., (2) a pre-construction Air State Facility permit
pursuant to ECL Article 19, and 6 NYCRR Part 201 and Subpart 231-2, and
(3) a Prevention of Significant Deterioration (PSD) permit pursuant to
Title 40 of the US Code of Federal Regulations (40 CFR) 52.21

- by -

Consolidated Edison Company of New York, Inc.

Case No. 2-6206-00012/000021

SPDES No.: NY-0005126

Decision

August 16, 2001

Decision of the Commissioner

Introduction

This Decision arises from an application before the New York State Department of Environmental Conservation ("Department" or "DEC") for certain environmental permits sought by Consolidated Edison ("Con Edison" or "Applicant") as part of its application for a certificate of environmental compatibility and public need pursuant to Article X of the Public Service Law ("PSL").

My Decision in this matter follows the exceptions and replies to the joint Recommended Decision ("RD") issued on June 28, 2001. Administrative Law Judge ("ALJ") Daniel P. O'Connell, as Associate Examiner for the purposes of the Public Service Law ("PSL") Article X review, prepared that portion of the RD relating to the federally delegated permits. The DEC ALJ's findings and conclusions in the joint RD address the issues joined for adjudication based upon my Interim Decision of June 4, 2001. Subject to my comments below, I adopt the findings and conclusions pertaining to the Department's federal permitting authority delegated by the U. S. Environmental Protection Agency ("USEPA").

On July 13, 2001, Manhattan Community Board No. 3 and the East River Environmental Coalition ("CB3/EREC") jointly filed a brief on exception with the Siting Board. In addition, the New York Public Interest Research Group ("NYPIRG") filed a combined petition with CB3/EREC for rehearing of the Siting Board's June 22, 2001 Order and a brief on exception with the Siting Board. CB3/EREC joins NYPIRG in the petition for rehearing. The Applicant and the Staff from the Departments of Public Service ("DPS")and DEC each filed letters, dated July 13, 2001, in lieu of briefs on exception with the Siting Board. Finally, the Applicant filed a letter dated July 13, 2001 with the DEC Commissioner pursuant to 6 NYCRR 624.13(a)(3).

On July 23, 2001, the Applicant, DPS, DEC and the Staff from the Department of Health ("DOH") each filed briefs opposing the exceptions. Subsequently, Con Edison filed a response dated July 30, 2001 opposing the joint petition filed by NYPIRG and CB3/ERRC for rehearing of the Board's June 22, 2001 Order. The joint petition for rehearing is addressed in this Decision.

This Decision constitutes my determination on the matters properly before the Department.

The Project

Con Edison proposes a repowering project at its East River Generating Station located in Manhattan between East 13th Street and East 15th Street from the FDR Drive to Avenue C. The purpose of the repowering project is to decommission and remediate the Waterside Generating Station located at 700 First Avenue and East 38th Street. The Applicant seeks to construct and operate two General Electric dual fuel combustion 180 megawatt (MW) turbine generators (CTGs) and two heat recovery steam generators (HRSGs) that would produce a nominal electric generation capacity of 360 MW, and an estimated 3,000,000 pounds per hour of steam; the steam generated would replace the steam produced by the Waterside facility. The two proposed units will use non-interruptible natural gas, and in emergency situations, distillate oil. Water for steam production and other uses will be supplied by the New York City Department of Environmental Protection, Bureau of Water and Sewer Operations.

At present, the East River complex includes the East River Generating Station where the two proposed CTG/HRSG units would be located, and the South Steam Station, which consists of a series of boilers that produce steam for the Applicant's steam distribution system. In addition, the complex includes electric switch yards and a fuel oil storage facility.

Petition for Rehearing

This Decision first addresses a petition for rehearing included as part of the exception to certain proposed findings and conclusions of the hearing examiners made in their June 28, 2001 RD. The petition for rehearing on the matter of fine particulate ("PM2.5") was addressed to the Siting Board. However, the fine particulate portion of the petition is properly before me as the Commissioner of the New York State Department of Environmental Conservation.

As noted above, the petition for rehearing was brought by the New York Public Interest Research Group, Inc., and the East River Environmental Coalition and Community Board 3, jointly as ("Petitioners"). The Applicant filed a brief in opposition to the petition for rehearing. No other parties filed a response to the motion. On August 8, 2001, the Petitioners submitted a 'supplemental' petition for rehearing citing a recent court case. Petitioners argue to present further information in hearing regarding the public health impacts of fine particulate matter.

The petition for rehearing seeks reconsideration to "...present evidence on the human health impacts of PM2.5...." Petition at pp. 7, 19, 21. See also Supplemental Petition at pp. 3-5. This matter was excluded from the hearing by the Associate Examiner based upon a prior Department decision. Con Edison opposes the motion and argues at length that the record is already sufficiently developed on this issue. Con Edison Opposition at pp. 16-25. Further, a recent court decision that included the fine particulate matter issue in its decision gives rise to it being discussed at length in this final decision. In RE Matter of UPROSE et al., v. New York Power Authority (NYPA) et al.,2001 WL 830817, __ AD2d __, (2nd Dept. July 23, 2001).

PM2.5 will be addressed here as part of the petition for rehearing. All information in the petition pertaining to issues other than PM2.5 will be considered as exceptions to the RD in so far as they relate to my jurisdictional authority.

In UPROSE, supra, the court decided that an environmental impact statement under the State Environmental Quality Review Act ("SEQRA") must be prepared on an applicant's installation of small electrical generating turbine power plants in the metropolitan New York City area. The court also stated that the issue of fine particulate matter was not adequately analyzed by that applicant in the Environmental Assessment Form ("EAF"). Because the court decided the fine particulate matter analysis was not sufficiently detailed in the EAF, that lack of analysis, in the court's opinion, tipped the balance in favor of preparing an environmental impact statement rather than validating the negative declaration prepared in lieu of such impact study.

Additionally, it is noted that the court did not find impermissible or otherwise disturb the approved methodology that uses PM10 as a surrogate for PM2.5. The court stated: "The analysis undertaken by NYPA, in which it assumed that all PM10 emissions are PM2.5 emissions is not sufficiently detailed in the EAF and is not an adequate substitute for addressing the public health impacts of PM2.5 emissions." UPROSE at p. _.

Given the decision in UPROSE in so far as it regards fine particulate matter and public health impacts, and the parties briefs on this point in this proceeding, I will review the Con Edison record regarding the particulate matter issue.

Preliminarily, the Article X application process requires project sponsors to prepare a comprehensive environmental analysis. PSL § 164. A previous Commissioner's ruling discussed the environmental comprehensiveness of such applications, finding that the Article X application is at least as rigorous and through as an environmental impacts statement review. See Matter of Ramapo Energy, Ruling on Motion for Leave to File an Expedited Appeal, April 4, 2001.

"...it is undisputed that Article X requires a thorough and extensive environmental review for proposed major electric generating facilities. See PSL § 163 (pre-application requirements), § 164 (application content requirements), § 167 (conduct of hearing and examiner responsibilities), § 168 (Board findings requirements); Letter from the Office of the Attorney General to Commissioner Cahill dated May 31, 2000; Letter from Commissioner Cahill to EPA Regional Administrator Fox dated February 25, 2000. In fact, the environmental review provided for under PSL Article X is as rigorous and thorough, and in some instances even more stringent, than a SEQRA review."

In light of this background, and given the procedural context of UPROSE, the Con Edison Article X application is clearly distinguishable from the UPROSE decision. In UPROSE, the project's environmental information was discussed in the EAF accompanying the application for SEQRA purposes. An EAF is used by an agency to assist it in determining the environmental significance or nonsignificance of actions. If the agency determines that there may be a significant environmental impact, it must require the preparation of an environmental impact statement. The lead agency, the New York Power Authority ("NYPA"), issued a negative declaration on its proposal, finding that the project would not result in any significant adverse environmental impacts. The court, however, found that an environmental impact statement should have been prepared.

Here, conversely, information comparable to what would be required in an environmental impact statement has already been prepared. The environmental information contained in the Article X application is voluminous and comprehensive, including the analysis of particulate matter, and it systematically considers significant environmental impacts, alternatives and mitigation. In fact, the regulatory review in this case resulted in further mitigation of environmental impacts. See permit conditions, RD at pp. 80-81; 85-93. Thus, the Article X application is at least the equivalent of an environmental impact statement. Ramapo, supra. Notwithstanding this important procedural distinction, I will review the adequacy of the analysis regarding particulate matter contained in this record.

The national ambient air quality standards ("NAAQS") are promulgated health based standards. The NAAQS for PM2.5 was adopted to protect public health. See 42 USC § 7409(b)(1). The USEPA issued guidance on how particulate impacts should be addressed to protect public health, and that guidance was followed in the development of the Article X application in this proceeding, as discussed further below.

I first note that a previous evaluation of fine particulate in a prior case before the Department took into account the state of the science regarding the regulation of fine particulate matter. Matter of American Marine Rail, LLC., Interim Decision, February 14, 2001. In the AMR interim decision, the Commissioner did not dispute the health impacts of fine particulate. However, the Commissioner also stated that the USEPA established a deliberative and comprehensive process for protecting public health from the risks presented by fine particulate. That process included gathering data, developing emission factors and significant impact levels, and formulating strategies as a prerequisite to developing an appropriate PM2.5 emission limit and protocol. In the interim, before a specific protocol and standard is promulgated, an evaluation of PM2.5 would be addressed by using the established and proven methodologies pertinent to PM10. This is the process that was approved by USEPA. AMR, supra, at p. 10.

Respirable particulate matter PM2.5 is derived from a variety of sources, including combustion by-products, the chemical interactions of gases, and common dust.(1) It is necessary to state that PM2.5 is ubiquitous in our environment. Centering on this application's proposal to burn natural gas and low sulfur oil as a back up fuel at the East River site, a recounting of the evidence below compels a conclusion that sufficient information about particulate matter exists to make an informed decision, and that no further hearing or review is required.

The evaluation of particulate matter in this Article X application was established consistent with approved and accepted methodologies. See Pre-Application Stipulation No.1 Air Quality and Meteorology. Where differences of opinion between the respective state agencies occurred, they were resolved and therefore no dispute exists between these parties. See Joint Settlement Stipulation, Topic Agreement regarding Air Resources, May 15, 2001, at p.17. Accordingly, the Pre-Application stipulation above brought into this proceeding all USEPA and DEC guidance governing the treatment of particulate matter. With that noteworthy stipulation as background, the record specifics on fine particulate and air emissions in general will be presented next.

As a starting point, a description of the current air quality levels for various emissions is fully detailed in the Article X application, and addresses particulate matter. See Vol. I, § 5.5.2 Ambient Air Quality, § 5.2.2.1 Ambient Air Quality Standards, § 5.2.2.2 Existing Air Quality Conditions, § 5.2.3 Baseline Emissions. See also Vol. I, Table 5-3. The locations of the Department's ambient air quality monitoring sites further served to gather particulate matter information which was taken into account in the particulate matter analysis. See Vol. I, Tables, 5-4, 5-5, and 5-6.

The Article X application comprehensively addresses the national and state ambient air quality standards, including the status of PM2.5, as of the date of the application materials (May 2000). See Vol. III, Appendix L, §L3.2. As part of the air emission reduction program, the Applicant has obtained all required offsets and the Department has certified those offsets. See Application Appendix C, C1, and L, §L3.5.22; Stipulation Exhibit 35. With respect to PM10, the Applicant has obtained 109.36 tons of emission reduction credits ("ERCs"). The Applicant was also required to conduct a net air quality benefit analysis pursuant to 6 NYCRR 231-2.9 because New York County is in non-attainment for PM10. See Vol. III, Appendix L, pp. L3-9. See also §L6.3.3.2. The net benefit of the emissions regarding particulate matter are fully stated in the application. See Vol. III, Appendix L, §L6.3.4 and Hearing Exhibit 50, Figs., L6-11, L6-12, L6-13, and L6-14. See also RD at pp. 107-109. Further, since Manhattan is in non-attainment for PM10 the Department's regulations at 6 NYCRR 231-2.5 require the implementation of a control technology that would result in the lowest achievable emission rate ("LAER") for PM10 emissions. See Vol. III, Appendix L, §L5.5. The application materials discuss the available control technologies that are considered LAER for PM10. Vol. III, Appendix L, §L5.5.2. In addition, there is no dispute from project opponents that PM10 is a surrogate for PM2.5 See Transcript at pp. 1640-1644.

Moreover, the RD contains a number of findings on air quality and potential impacts that were not disturbed by any of the parties' exceptions filed in this proceeding. The uncontroverted findings therefore are facts that must prevail. It is clear from the findings, for example, that the project's emissions would meet all NAAQS and New York State standards for criteria pollutants, as well as the health-based benchmarks for non-criteria pollutants established by DEC and DOH. RD at pp. 149, 75-76, 114. Additionally, the project's air contaminant emissions will have no significant impact on any receptor location and would be less than USEPA's duly established significant impact levels of pollutants. RD at pp. 65, 72. Further, the cumulative impact of all project emissions would not result in any exceedence of NAAQS. RD at p. 114. Similarly, non-criteria pollutant emissions would not exceed the recognized benchmark concentrations established to protect public health. RD at pp. 114-115. The project itself, together with the shut down of the existing Waterside Station, and Con Edison's Emissions Reduction Proposal, would improve air quality both in New York City as a whole and in the vicinity of the project area. RD at p. 75. See also RD at p. 106. Finally, the project would lower concentrations of PM2.5 and PM10, as well as other pollutants. RD at p. 146.

There is no question that public health impacts were considered on this record, particularly with respect to particulate matter. The foregoing amply demonstrates the projects conformity with the health based standards and the regulatory methodologies and guidance issued to ensure the protection of public health. Accordingly, the totality of this information is sufficient to render a further review of CB3/EREC's request for rehearing and/or to receive in evidence its stricken prefiled testimony on 'health impacts' (PM2.5) as having no decisional consequence. Based upon the foregoing analysis and discussion above, the petition for rehearing is denied.

In turning to the federally delegated permits in the next section, the gradual plume rise analysis and findings reported by the ALJ also take into account fine particulate impacts. Without any contrary information to seriously undermine those RD findings, they too must be adopted.

Federally Delegated Permits(4)

Preliminarily, although all parties filed their respective briefs with the Secretary to the Siting Board, some arguments presented in the parties' briefs relate to matters that must be decided by the DEC Commissioner rather than the Siting Board. These matters are limited to the federally delegated permitting authority of the Department. See Matter of Ramapo Energy LP, Order Concerning Interlocutory Appeals from Article X Issues Ruling, July 25, 2001, at p. 7. Accordingly, I will address the exceptions within the context of the Department's delegated permitting authority to the extent reasonably practicable.

Air Permits

Con Edison has requested a pre-construction Air State Facility permit pursuant to ECL Article 19 (Air Pollution Control), and 6 NYCRR Part 201 (Permits and Registrations), and Subpart 231-2 (Requirements for Emission Units Subject to the Regulation on or After November 15, 1992). As more fully set forth in the ALJ's March 15, 2001 ruling, and as further addressed in my June 4, 2001 Interim Decision, three matters concerning the pending Air State Facility permit were in need of further elaboration on the record.

The three matters that were adjudicated in the proceeding, include: (1) whether SCONOx is an "available" technology or one that can be "achieved in practice" as an alternate method to control excess ammonia or "ammonia slip" instead of the selective catalytic reduction ("SCR") technology proposed by the Applicant; (2) an evaluation of the results of the "gradual plume rise" air impact modeling analysis, which considers potential impacts at elevated receptors; and (3) adjudication of alternative sites under 6 NYCRR Part 231 (New Source Review in Nonattainment Areas and Ozone Transport Regions).

The first two matters, SCONOx and gradual plume rise, were addressed in the RD. See RD at pp. 80-110. CB3/EREC does not take exception to the findings and conclusions related to SCONOx. The Applicant, DPS, DEC, and DOH endorse the ALJ's findings and conclusions. It should be noted that the issue related to SCONOx included a consideration of secondary particulate matter formation with respect to the "ammonia slip". RD at pp. 105-109. Absent any exceptions on SCONOx, I hereby adopt these findings as my own. In particular, I affirm the DEC ALJ/Associate Examiner's conclusion that intervenor's proposed SCONOx alternative has not been "achieved in practice" and therefore it is not available to be used at the Applicant's proposed facility.

CB3/EREC does not take exception to the findings and conclusions related to the results of the gradual plume rise modeling. The RD fully addresses this matter. Con Edison's approved air modeling protocol for the project included an analysis of the potential adverse impacts from emissions on elevated (or flagpole) receptors. Part of this evaluation required the Applicant to include the "gradual plume rise" option for downwashing stacks. This option was included because the height of the four emission stacks at the East River complex is less than that called for by good engineering practice ("GEP"). Under these circumstances, as plumes are emitted from the stacks, they may impact receptors at, or near, the tops of nearby tall buildings during the "gradual" rise of the plumes before the plumes reach their final height. As a result of this analysis, additional permit conditions were developed that will limit the use of duct burners. These added limitations would ensure that the potential emissions would be less that the significant impact levels established by federal regulation. Accordingly, I adopt these findings as they are presented in the RD, and affirm the related conclusions respecting gradual plume rise.

In the March 15, 2001 ruling, the ALJ included alternative sites under 6 NYCRR 231-2 as an issue for hearing. That ruling was affirmed for the reasons stated in my Interim Decision of June 4, 2001, at pp. 6-7. The RD makes certain findings with respect to the issue of alternative sites. RD PSL Article X Alternatives, at pp. 18-68 and § 231-2.4 Alternatives, at pp. 54-68. CB3/EREC does not expressly object to the findings related to the 6 NYCRR 231-2.4(a)(2)(ii) alternative discussion. Rather, CB3/EREC presents arguments for further hearings to consider the potential public health impacts from adverse air emissions. Further, CB3/EREC requests that the record be reopened with respect to health impacts and the social costs associated with PM10 emissions, alternatives, and additional mitigation to minimize adverse environmental impacts (see preceding section regarding a second request on the same topic).

CB3/EREC's request for a remand for further hearing relates to its attempt to present, for the first time, health data for the various ZIP code areas around the East River complex and the Waterside Station in its post hearing brief. See CB3/EREC's Brief on Exception at p. 6. This information was rejected by the examiners in the RD because it was beyond the scope of the issues identified in my June 4, 2001 Interim Decision and the Board's June 22, 2001, Order.

CB3/EREC's arguments to require further proceedings on the concerns it raises, for example, fine particulate, social costs, alternatives, additional mitigation, are untimely. It is improper procedure to raise them again at this stage. Assuming for the moment the request for a remand for further proceedings is proper, CB3/EREC's request simply does not contain any persuasive and cogent arguments that compel further review. Accordingly, EB3/EREC's request for a remand of these proceedings for further Department review with respect to health impacts(6) and the social costs associated with PM10 emissions, alternatives, and additional mitigation to minimize adverse environmental impacts, is denied.(7)

In the alternative, it could be argued that CB3/EREC takes exception [Brief on Exception §I.E] to the Associate Examiner's ruling during the proceeding that "social costs," as that term is used in §231-2.4(a)(2)(ii), was not intended to include potential health impacts because the national ambient air quality standards are health-based standards. Transcript at pp. 1527-1528; RD at pp. 59-60. CB3/EREC, however, presents no legal argument about why the Associate Examiner's ruling is incorrect. I find the ruling reasonable since the NAAQS standards must be protective of public health with an adequate margin of safety. See 42 USC § 7409(b)(1).

Upon my review of the exceptions and the replies thereto and the RD addressing the facts surrounding the alternative sites issue certified for hearing by my June 4, 2001 Interim Decision, I am persuaded that the record developed and the conclusions drawn in the RD satisfactorily resolve this matter. Accordingly, I adopt the reported findings and conclusions as my own and declare that 6 NYCRR 231-2 has been satisfactorily met.

SPDES Permit

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. Neither CB/EREC's joint petition for full party status, nor the petitions for amicus status asserted any issues about the draft SPDES permit conditions. In addition, there were no exceptions to the RD that argued to adjust the draft SPDES permit. Therefore, only cursory treatment of this issue is warranted here.

With its PSL Article X application, the Applicant requested a modification of the existing SPDES permit to accommodate the discharges associated with the proposed facility. Consistent with the procedural requirements outlined in 6 NYCRR Parts 750-758, DEC Staff reviewed the modification request, and developed draft SPDES conditions with the required fact sheet for public review and comment.

At present, most wastewater streams generated at Con Edison's East River facility are discharged, after treatment, to the East River via the South Tunnel, which is identified in the current SPDES permit as Outfall 001. The major wastewater streams for the proposed Project would be multimedia filter backwash, reverse osmosis discharge, electrodeionization discharge, blowdown from the heat recovery steam generators, chemical feed/sampling water and service water from operation and maintenance activities.

Based upon my review of the administrative record concerning the pending SPDES permit modification request, I conclude that the draft conditions of the SPDES modification related to the proposed project are consistent with the applicable state and federal regulations that control wastewater discharges.

Conclusion

DEC Staff is directed to issue the pertinent permits consistent with this Decision and to provide such permits to the Siting Board consistent with PSL § 172.1.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
By: Erin M. Crotty, Commissioner

Dated: Albany, New York
August 16, 2001

1. The ALJ spoke directly on this topic, holding that there are no factual disputes about the potential adverse human health impacts associated

with exposure to particulate matter, in general, and to PM2.5 in particular. He held that the purpose of the proceeding was not to promulgate a fine particulate standard but to determine whether the emissions are consistent with already established standards.(2)

2. See, Matter of Herbert/Triga Company, Commissioner's Interim Decision (1989). (3)

3. The presiding examiners take up the question of potential adverse health impacts from exposure to PM2.5 below within the context of the pending PSL Article X certificate. The DEC associate examiner takes no position about that issue's determination.

4. Amendments to Article X and the ECL in 1999 clarified that the DEC Commissioner has express authority to issue environmental permits for PSL Article X major electric generating facilities pursuant to federally delegated or approved authority under the federal Clean Water Act, the federal Clean Air Act and the federal Resource Conservation and Recovery Act.(5)

5. Article X specifically references permitting programs for permits issued pursuant to federally delegated or approved authority under the federal Clean Water Act, the federal Clean Air Act and the federal Resource Conservation and Recovery Act. PSL §§ 164(1)(f), 167(1)(a), 168(3), 172(1). §§

6. The EB3/EREC brief on exception argues the need to further address PM2.5, notwithstanding the previous decisions addressing this issue. See AMR, supra. See also Order of Siting Board, June 22, 2001, supra.

7. The RD found, and no exceptions filed thereon disturb the findings, that the emissions would meet all NAAQS standards for criteria pollutants, and the health-based benchmarks for non-criteria pollutants established by the Department and the DOH. See RD at pp. 149, 75-76, 114. The RD concluded that a significant impact area does not exist with respect to air emissions. RD at p. 65, 72. In addition, the project's emissions pertaining to significant impact levels for the criteria pollutant PM10, fall below the significant impact levels and will not cause or contribute to the contravention of NAAQS. There is no question that the project will provide a net reduction in the concentration of SO2, VOC's, NOx, CO and PM10 emissions. RD at p. 75.

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