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Erie Boulevard Hydropower, LP (School Street Project) - Ruling, October 26, 2000

Ruling, October 26, 2000

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of

the Application of

ERIE BOULEVARD HYDROPOWER, L.P.

for Section 401 Water Quality Certification for the School Street Project.

Ruling on Motion or Denial of Substitution of Applicants

[October 26, 2000]

DEC Project No.

4-6103-00027/00001-9

[FERC No. 2539]

Introduction

By letter dated May 8, 2000, Orion Power New York ("Orion"), general partner of Erie Boulevard Hydropower, L.P. ("Erie"), requested the substitution of Erie for initial applicant Niagara Mohawk Power Corporation ("Niagara Mohawk") on five pending applications for State Water Quality Certification ("WQC"), including the School Street project, above referenced.

By letter-motion dated August 11, 2000 the City of Cohoes ("Cohoes") objected to the substitution of Erie Boulevard Hydropower, L.P. ("Erie") for applicant Niagara Mohawk on this WQC application. Cohoes contends that a substitution is improper and instead the Department should require Erie to file a new WQC application. The basis for the Cohoes objection is that there has been a material change in applicants and their respective abilities.

By letter dated August 25, 2000, Orion objected to Cohoes' motion for denial of the substitution.

By letter dated September 21, 2000 I directed the Department of Environmental Conservation (the "Department") Staff ("Staff"), Staff counsel to file a response to the Cohoes motion. That response was received by letter dated October 13, 2000, opposing the Cohoes motion.

Although Cohoes has referenced Niagara Mohawk's pending WQC applications in addition to School Street, the motion specifically opposes the substitution of WQC applicants in the School Street application only. Therefore, I treat Cohoes' motion as opposing the substitution with respect to the School Street Project only.

Discussion

The WQC sought herein is a necessary component of the federal hydroelectric facility relicensing application pending before the Federal Energy Regulatory Commission ("FERC"). By Order dated July 26, 1999, FERC granted the transfer of Niagara Mohawk's pending hydroelectric facility relicensing applications, including the School Street project, to Erie. Consequently, Orion seeks the transfer of Niagara Mohawk's existing State WQC applications, including the School Street project WQC application, from Niagara Mohawk to Erie.

The Department Staff asserts that the State WQC application review must examine the same entity for water quality issues as is being examined for the FERC hydroelectric license. Staff contends that substituting Erie for Niagara Mohawk promotes consistency in the application process.

Cohoes requests that the Department require that Erie submit a new WQC application for the School Street project (and the other four projects). In the alternative, Cohoes requests that the Department reissue an acceptance of the certificate application with a new date, either the effective date of the substitution or the date that the Department determines that the application is deemed complete and ready for processing.

Cohoes first argument is that the Department's regulations do not allow a substitution of WQC applicants during the application process. However, Cohoes cites no specific law or regulation to support that position. Staff disagrees with that position and cites 6 NYCRR Part 621 as the applicable law. Staff correctly argues that there is no statutory or regulatory prohibition to substitution of WQC applicants.

6 NYCRR 621.13 addresses transfers of permits that have been granted and allows such a transfer to occur. Although this regulatory provision does not directly address the present circumstance, it is instructive. It is reasonable to conclude that since transfer of an existing permit to another entity is explicitly authorized, and no provision explicitly prevents substitution of WQC applicants, the transfer of a pending WQC permit application is within the discretion of the Department.

Next, Cohoes cites Jefferson County v. Washington Department of Ecology, 114 S. Ct. 1900 (1994), as giving Department authority to disallow the substitution. In Jefferson, the issue was the type of restrictions or conditions that could be imposed by a state agency in issuing a water quality certificate. The Court examined the authority of the State and held "[a] State may impose conditions on certifications insofar as necessary to enforce a designated use contained in the State's water quality standard." Jefferson, supra at 1914. In sum, Jefferson discusses the authority of a government agency to establish conditions when granting a water quality certificate; it does not address the very specific and vastly different issue presented here.

Third, Cohoes points to the differences that may exist with respect to Niagara Mohawk and Erie, including their respective financial positions and abilities. While these factors may well be considered in setting conditions or restrictions on any WQC that may be issued, it has no meaningful import with a transfer of the application. The City of Cohoes' concerns are premature. The Department Staff has not yet prepared a draft WQC. Staff will no doubt review Erie's circumstances, financial positions and abilities in the course of the application process. Interveners, including the City of Cohoes will have an opportunity to be heard on these issues during any further issues conference (or adjudicatory hearing) that may be scheduled in this matter.

Lastly, Cohoes contends that if a substitution of WQC applicants is allowed, the WQC application dates must be modified. However, Cohoes has cited no statutory or regulatory basis to support its request. The Department Staff is correct that the Department has no legal authority to act in such a manner.

The remaining arguments of the City, relating to possible conditions on any resulting WQC that may be issued, are rejected.

Ruling

Departmental review of the School Street project WQC application must examine the same WQC applicant that is being examined by FERC for the federal hydroelectric license. Substituting Erie for Niagara Mohawk accomplishes this necessary goal, thereby promoting consistency in the state and federal application review processes.

Since transfer of an existing permit to another entity is explicitly authorized under the Department's regulations and no provision explicitly prevents substitution of WQC applicants, transfer of a pending WQC application to another entity is within the discretion of the Department.

Lastly, the Department has no statutory or regulatory basis to modify the School Street project WQC application date, as Cohoes has requested.

The motion of the City of Cohoes is denied.

Appeals

This ruling may be appealed to the Commissioner in writing by November 6, 2000. Replies to any such appeal must be filed by November 13, 2000. Any request for an adjustment of the appeal schedule must be made to the Chief ALJ. All appeals and replies must be addressed to the Office of the Commissioner, NYSDEC, 50 Wolf Road, Room 604, Albany, New York 12233-1010 and must include an original and two copies. All appeals and replies must be received by that Office by the dates indicated herein. Additionally, two copies of such filings must also be sent to the ALJ's attention at the Department's Office of Hearings and Mediation Services, and to all persons indicated on the current distribution list. Transmittal of documents must be made at the same time and in the same manner to all persons.

_____________/s/_____________
Kevin J. Casutto
Administrative Law Judge

Dated: October 26, 2000
Albany, New York

To: School Street Distribution List
Michael Murphy, Esq.

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