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Keyspan Energy Development Corporation (Spagnoli Road Project) - Issues Ruling, June 21, 2002

Issues Ruling, June 21, 2002

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of

Application for a State Pollutant Discharge Elimination System 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., and Air Pollution Control Permits consisting of a Preconstruction permit
and a Certificate to Operate, pursuant to ECL Article 19 and 6 NYCRR Parts 200 et seq.,

- by -

Keyspan Energy Development Corporation
One Metrotech Center, 18th Floor
Brooklyn, NY 11201-3851

Applicant

RULING ON PROPOSED ADJUDICABLE ISSUES
AND PETITIONS FOR PARTY STATUS

DEC No. 1-4726-01500/00001

Spagnoli Road Project

June 21, 2002

Summary

This ruling denies Suffolk County's late-filed petition for party status and the Town of Oyster Bay's late oral motion and petition for party status. Proposed adjudicable issues were submitted in the timely petitions of the Town of Huntington and a joint petition of South Huntington Alliance for Responsible Energy Development, Arrow Electronics, Inc., Gilbert Displays, Inc. and Marchon Eyewear, Inc., undated (collectively, "SHARED"). The sole issue identified for adjudication is the analysis of alternative sites, pursuant to 6 NYCRR 231-2.4(a)(2)(ii). That issue was identified by SHARED. Consequently, party status is granted to SHARED.

Introduction

In March 2002, Keyspan Energy Development Corporation ("Keyspan") applied for a Certificate of Environmental Compatibility and Public Need pursuant to Article X of the New York Public Service Law (PSL)(1) and Air Pollution Control and State Pollutant Discharge Elimination System (SPDES)permits pursuant to Articles 17 and 19 of the Environmental Conservation Law (ECL), to construct and operate a 250 megawatt (MW) combined-cycle electric generating facility. The facility site is located on Spagnoli Road in the Town of Huntington, Suffolk County, New York. The proposed project site is approximately 31.7 acres in area and is located on the south side of Spagnoli Road. The site is about one-half mile west of Route 110, in the southwest corner of the Town of Huntington, near the Nassau County-Suffolk County line.

The Facility would consist of a combustion turbine generator operating with a heat recovery steam generator, a steam turbine generator, an air-cooled condenser and associated balance-of-plant systems and facilities. The nominal electric generating capacity of the proposed facility will be approximately 250 megawatts (MW). The sole fuel would be natural gas. The Applicant proposes to install an oxidation catalyst system to reduce emissions of carbon monoxide (CO) and volatile organic compounds (VOCs). In addition, the Applicant proposes to use dry low-NOx combustors and Selective Catalytic Reduction (SCR) to control formation of nitrogen oxides (NOx) and associated emissions. The air emissions resulting from the turbines and generators will be vented through a single 195 foot high exhaust stack.

The facility's water supply requirements are projected to range from approximately 29 gallons per minute (gpm; 0.042 million gallons per day[mgd]) during fall, winter and spring operations, to approximately 54 gpm (0.078 mgd) during summer operations. Water supply for the facility would be provided from the South Huntington Water District (the Water District). Process and sanitary wastewater will be routed to the Bergen Point Sewage Treatment Plant. Stormwater from site runoff and secondary containment areas will be discharged to a refurbished infiltration basin. The entire project area is zoned for light industrial and office use.

Proceedings

Keyspan's Application for a PSL Article X certificate also included a request for a SPDES permit and Air Pollution Control permits (pursuant to 6 NYCRR Parts 201 and 231). The Staff of the N.Y.S. Department of Environmental Conservation (DEC Staff) reviewed Keyspan's SPDES and Air permit Applications, and subsequently developed draft SPDES and Air permits. The draft permits were issued under cover of letter dated April 2, 2002 (including an Air Title V permit, captioned 'Air State Facility Permit' pursuant to 6 NYCRR Parts 201 and 231, that also addresses the Applicant's Air Title IV [acid rain] permit application [hereinafter, the draft Air permit(s)] and a draft Industrial SPDES permit).

A DEC Combined Notice of Public Hearing and Issues Conference (the Notice) was published in the DEC's electronic Environmental Notice Bulletin and appeared as a legal notice in Newsday on April 3, 2002. In addition, copies of the Notice were sent to the parties to the related PSL Article X proceeding, and to the required governmental officials and to many individuals who had expressed an interest in the proposed facility.

The Notice advertised a joint legislative hearing (public statement hearing) and issues conference pursuant to PSL Article X and the ECL. The Notice included descriptions of the proposed electric generating facility and the nature of the anticipated waste water discharges. In addition, the Notice provided for a 34-day comment period, and advertised the schedule for a legislative hearing and an issues conference, to be held on a joint record with the related PSL Article X proceeding.

A legislative hearing was held on May 7, 2002 with sessions at 1:00 p.m. and 7:00 p.m. at the Auditorium at Old Bethpage Village, 1303 Round Swamp Road, Old Bethpage, New York 11804. Approximately 100 people attended the afternoon legislative hearing session where 18 people presented oral statements, and approximately 200 people attended the evening legislative hearing session where 31 people presented oral statements. Of the 49 public comments, approximately 21 people supported the project and approximately 28 people opposed it. In addition, several written comments were filed by mail or received during the legislative hearing sessions.

Those who commented in favor of the project cited growing demand for electricity as an essential element of economic growth for Long Island, and more specifically for the surrounding 'Route 110 Corridor'. Several trade union members also spoke in support of the economic development that the project would represent during the construction phase.

Those who commented in opposition to the project expressed several concerns including the cumulative public health impact of this project in addition to other local sources of air pollution, the high incidence of respiratory disease and particularly pediatric respiratory disease on Long Island and more specifically, in the project area. Opponents also noted the project's close proximity to Republic airport and potentially hazardous flight paths due to the proposed project stack height. Additionally, opponents asserted that Keyspan could more effectively rebuild existing oil plants to use natural gas fuel, thereby reducing air emissions while increasing generating capacity. Lastly, project opponents contended that conservation measures and development of renewable energy resources should be emphasized rather than building additional fossil fuel electric generation capacity.

The joint issues conference was held on May 10, 2002 at One Penn Plaza, New York, New York. At the Applicant's request, a briefing schedule was set with final filing due on May 28, 2002, later extended to May 30, 2002.

PSL Article X Presiding Examiner, Hon. Robert R. Garlin, and I (as Associate Examiner) co-presided during this joint issues conference. Presiding Examiner Garlin led the discussion of the PSL Article X pre-hearing conference discussion of proposed adjudicable issues, and I led the discussion of proposed DEC issues.

Two timely filings were received, a petition of the Town of Huntington dated April 30, 2002 and a joint petition of South Huntington Alliance for Responsible Energy Development, Arrow Electronics, Inc., Gilbert Displays, Inc. and Marchon Eyewear, Inc., undated (collectively, SHARED).

Additionally, two untimely requests for party status were received, the County of Suffolk's petition, received May 8, 2002, and an oral motion for party status by the Town of Oyster Bay, made during the May 10, 2002 issues conference.

The Town of Huntington ("Huntington") was represented by Town Attorney John L. Leo, Esq., and Twomey, Latham, Shea & Kelley, Esqs., Maureen Liccione, Esq. and Suzanne Shea, Esq., of Counsel.

SHARED was represented by Sive, Paget & Riesel, P.C., Mark Chertok, Esq., and Kate Sinding, Esq., of Counsel, and Cahn, Wishod & Knauer, L.L.P., Richard Cahn, Esq., of Counsel.

Suffolk County was represented by the County Department of Law, Phyllis Seidman, Esq., of Counsel.

The Town of Oyster Bay ("Oyster Bay") was represented by Town Attorney Gregory J. Giammalvo, appearing by Assistant Town Attorney Marilyn Olshansky.

The DEC Staff was represented by Jennifer Hairie, Esq., Project Counsel.

The Applicant was represented by the law firm of Arnold & Porter, Andrew Ratzkin, Esq., and Michael Gerrard, Esq., of counsel.

The stenographic record of the May 10, 2002 joint issues conference (and the May 7, 2002 joint public comment [DEC legislative] hearing) was received by May 14, 2002. The issues conference participants were provided an opportunity to file briefs pursuant to a schedule extending through May 30, 2002, on which date the DEC issues conference record closed. This issues ruling also addresses the late-filed petition of the Town of Oyster Bay, filed on June 4, 2002.

Environmental Interest

An Intervenor seeking full party status must demonstrate an environmental interest in the proceeding (6 NYCRR §624.5(b)(1)(ii)) and must demonstrate that a substantive and significant issue exists regarding the permit application (6 NYCRR §624.4(c)). The Applicant challenged the interest of the three business entities filing the joint SHARED petition. However, SHARED countered that the three businesses employ approximately 3,000 employees close to the facility and that these businesses (and their employees) will be subject to any adverse impacts of the project, including air pollution and noise impacts. In my view, the SHARED petitioners have demonstrated an adequate environmental interest in the project, one element of a successful petition for party status. There were no other challenges to any other Intervenor's environmental interest.

Proposed Issues for Adjudication

I. Standards for Ruling on Proposed Adjudicable Issues

Section 624.4(c) of 6 NYCRR outlines the standards for adjudicable issues. When, as here, the DEC Staff has determined that a proposal as conditioned by a draft permit(s) 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.(2) Briefly, 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. 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.(3) See, generally, Athens Interim Decision, supra at 3, "Standards for Adjudication".

II. Confirmation of Bench Rulings

During the issues conference, I made several bench rulings confirmed in this issues ruling. These rulings may be appealed under the schedule set forth at the conclusion of this issues ruling. The bench rulings are summarized below:

Ruling #1: Petitions for party status were due to be filed by May 1, 2002, but the Suffolk County petition was filed on May 8, 2002. The petition does not comply with the requirements of 6 NYCRR 624.5(c)(2)(i) through (iii). Specifically, the petition does not contain any showing of good cause for the late filing, contains no explanation whether any significant delay or unreasonable prejudice will accrue if the petition is granted, nor any explanation whether granting the petition will materially assist in the determination of issues raised in the proceeding. Lastly, Suffolk County's sole proposed issue relates to applicability of local laws, an issue appropriate for adjudication in the Article X component of the joint proceeding, but not a substantive DEC issue. For all these reasons, this late-filed petition must be denied.

Ruling #2: The late oral motion for party status by Oyster Bay was made on the record, during the May 10, 2002 issues conference. This motion also failed to make any showing required by 6 NYCRR 624.5(c)(2)(i) through (iii). For these reasons I ruled that Oyster Bay's late motion for party status also must be denied.

Following the issues conference, on June 4, 2002 Oyster Bay, represented by the Town Attorney and the law firm of Schapiro & Reich, filed a written petition for party status. The late petition fails to demonstrate good cause for the delay in filing, indicating merely that Oyster Bay did not appreciate the necessity of filing a DEC petition (in addition to a PSL Article X petition) until May 1, 2002, the due date for filing DEC petitions. The DEC public hearing notice, duly published more than 40 days before the issue conference, identified the requirements for filing a petition for DEC party status. Moreover, granting the petition at this late date will result in substantial delay in the proceedings. It would require reconvening an issues conference session (or setting an additional briefing schedule) to create a record on Oyster Bay's proposed adjudicable issues. For these reasons, I find no basis to disturb the bench ruling denying DEC party status to the Town of Oyster Bay.

Ruling #3: The SHARED petition raised several proposed adjudicable issues concerning air pollution impacts of fine particulate matter (or "PM-2.5"). Huntington also raised proposed PM-2.5 issues. However, the DEC Commissioner has announced in other recent cases that with respect to DEC's administration of the federally delegated air pollution control program, implementation of the USEPA National Ambient Air Quality Standards (NAAQS) PM-2.5 standard is not yet possible, due to lack of sufficient data and implementing guidance. Therefore, this issue is neither substantive nor significant.

Instead, in New York environmental permitting cases, the current PM-10 standard remains a surrogate for PM-2.5, until the USEPA and DEC have fully implemented the PM-2.5 standard. See, generally, Consolidated Edison Company (East River Project), Commissioner's Decision at 3, Case No. 2-6206-00012/000021, (August 16, 2001). Nevertheless, the PM-2.5 issue will be adjudicated in the Article X component of the joint proceeding, under the Article X analogue of SEQRA. The Article X adjudication will provide a comprehensive review of this issue.

Ruling #4: Further, SHARED contends that the review for SPDES and Air permits by the DEC is a component of the PSL Article X process and therefore, the DEC's standards for party status and issues identification under 6 NYCRR Part 624 (substantive and significant), do not apply. SHARED contends that the PSL Article X standards (material and relevant) apply exclusively to the New York review of permits necessary for the project. This view has been rejected in prior cases. See, Athens Generating Co., LP, ALJ's Issues Ruling, DEC Case No. 4-1922-00055/00001 (April 26, 2000) at 6; Mirant Bowline, LLC, ALJ's Issues Ruling, DEC Case No. 3-3922-0003/00015 (March 30, 2001) at 6. That analysis applies equally to the federally delegated SPDES and Air programs.

III. Proposed Air Pollution Control Issues

1. SHARED contends that 6 NYCRR 211.2 must be read broadly to require an Applicant to conduct a detailed cumulative impact analysis, and provide other information and analyses.

SHARED relies upon a broad interpretation of 6 NYCRR 211.2 in support of several proposed adjudicable air issues. 6 NYCRR 211.2, "Air pollution prohibited," provides that:

No person shall cause or allow emissions of air contaminants to the outdoor atmosphere of such quantity, characteristic or duration which are injurious to human, plant or animal life or to property, or which unreasonably interfere with the comfortable enjoyment of life or property. Notwithstanding the existence of specific air quality standards or emission limits, this prohibition applies, but is not limited to, any particulate , fume, gas, mist, odor, smoke, vapor, pollen, toxic or deleterious emission, either alone or in combination with others.

In addition, SHARED contends that air modeling is incomplete, in that it was only limited to modeling of federal Title V facilities within a one-mile radius of the site.

The Applicant countered that the authority for a cumulative impact analysis flows primarily from the Prevention of Significant Deterioration (PSD) federal regulations. However, that analysis is required only if PSD thresholds are exceeded, which is not the case for this project. The Applicant concludes that since a cumulative impact analysis is not required pursuant to PSD requirements and SHARED has not identified any other statute or regulation to require a cumulative impact analysis, no cumulative impact analysis is required. In addition, the Applicant contends it complied with the requirements of the stipulation it entered with the regulating governmental agencies, requiring cumulative source impact analysis for any criteria pollutant with impacts above significant impact levels (SILs). But, no SIL is expected to be exceeded for this project. The Applicant asserts that it has conducted the cumulative impact analysis required under the Environmental Justice stipulation. That analysis appears in the application materials at Application Section 5-42.

Although SHARED's broad reading of 6 NYCRR 211.2 is not inconsistent with the language of that provision, such a broad interpretation is not required. Instead, DEC Staff asserts that this regulation is a general nuisance provision, and that the Department has long interpreted 6 NYCRR 211.2 as a nuisance provision.(4) The construction given regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld. Howard v Wyman, 28 NY2d 434, 435 (1971).

Lastly, to support its broad interpretation of 211.2, SHARED cites In the Matter of Keyspan Ravenswood, Siting Board Order, Board Case No. 99-F-1625 (January 30, 2002). In Ravenswood, the City of New York argued that the Board should require a cumulative impact analysis pursuant to the City Environmental Quality Review (a local law). In rejecting this argument, the Board noted that the language of 6 NYCRR 211.2, set forth in the DEC Air Permit, created an opportunity for the City to raise the cumulative impact issue in the DEC component of that joint proceeding, which the City failed to do.

Therefore, SHARED contends that the Ravenswood Board interpreted the language of 6 NYCRR 211.2 consistent with its proffered interpretation in the present matter. SHARED concludes that, under the Ravenswood Board precedent interpreting 211.2, SHARED must be allowed to pursue their proposed cumulative impact issue in the DEC component of the instant proceeding.

RULING: While SHARED's broad interpretation of 6 NYCRR 211.2 is not inconsistent with the regulatory language, it is inconsistent with the Department's longstanding interpretation of 6 NYCRR 211.2 as a general nuisance provision. See, Howard v Wyman, 28 NY2d 434, 435 (1971). 6 NYCRR 211.2 does not, by its terms, explicitly require a cumulative impact analysis such as SHARED contends.

SHARED asserts that the Ravenswood Board interpretation of 6 NYCRR 211.2 supports SHARED's broad interpretation of 211.2. But, the Ravenswood Board Order is not binding precedent for this Department. To the extent the Ravenswood Order is inconsistent with this ruling, the interpretation of 6 NYCRR 211.2 in the Ravenswood Order must be rejected in view of the long standing DEC Commissioner's interpretation of this DEC regulatory provision.

In sum, SHARED has not identified any binding authority requiring the proffered broad reading of 6 NYCRR 211.2. Consequently, SHARED's broad interpretation of 6 NYCRR 211.2 is neither substantive nor significant, and must be rejected. No adjudicable issue has been identified.

Lastly, SHARED contends that pursuant to the general prohibition of air pollution in 6 NYCRR 211.2, that PM-2.5 is an adjudicable DEC issue. Although I did not rule on this issue during the issues conference, this proposed PM-2.5 issue also is rejected in view of the impediments to implementation of the PM-2.5 standard identified herein above.

2. SHARED contends that pursuant to 6 NYCRR 231-2.4(a)(2)(ii), the Applicant's evaluation of alternative sites is inadequate for two reasons: First, because the discussion of alternatives in the application does not demonstrate that the benefits of the proposed project significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification within New York State. Second, because the analysis of alternative sites does not include any consideration of sites not presently owned or under option by Keyspan. In furtherance of this proposed issue, SHARED has filed a Preliminary Alternative Site Identification Study evaluating the proposed site, the four alternative sites identified by the Applicant, and eight other sites. SHARED Petition, Exhibit H. In sum, the Intervenors assert omissions or defects in Keyspan's alternatives analysis.

6 NYCRR 231-2.4(a)(2)(ii) provides that:

[a]s part of a permit application for a proposed source project or proposed major facility subject to this Subpart, the applicant shall . . . (ii) submit an analysis of alternative sites, sizes, production processes, and environmental control techniques which demonstrates that the benefits of the proposed source project or proposed major facility significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification within New York State . . .

The Applicant and DEC Staff contend that 6 NYCRR 231-2.4(a)(2)(ii) repeats federal requirements of the Clean Air Act (42 USC 7503(a)(5)). Further, they contend that the USEPA has not provided guidance on implementation of this alternatives analysis. The Applicant and DEC Staff cite the few cases that have addressed this alternatives analysis. In re Campo Landfill Project, USEPA Order Denying Review in Part and Remanding in Part, 1996 WL 344522 (June 19, 1996), Matter of Operating Permit, Formaldehyde Plant, Borden Chemical, Inc. (Borden), USEPA Administrator's Ruling, Case No. 6-01-1 (December 22, 2000), and In the Matter of Consolidated Edison Company, New York State Board on Electric Generation Siting and the Environment, Recommended Decision, June 28, 2001, Case No. 99-F-1314.

In interpreting this caselaw, it is the position of DEC Staff that the Applicant bears a low burden to demonstrate compliance with the 231-2.4(a)(2)(ii) alternatives analysis. Most persuasive regarding interpretation of the requirements of 6 NYCRR 231-2.4(a)(2)(ii), is the federal Borden ruling. In that ruling, the EPA Administrator adopted a three-prong test for compliance with the alternatives analysis of the federal statute. First, the applicant must show whether the potential and real adverse environmental effects of the proposed project have been avoided to the maximum extent possible. Second, the applicant must show whether a cost benefit analysis of the environmental impact costs balanced against the social and economic benefits of the project demonstrate that the latter outweigh the former. Lastly, the applicant must show whether there are alternative projects or alternative sites or mitigating measures which would offer more protection to the environment than the proposed project without unduly curtailing non-environmental benefits to the extent applicable.

This three-prong test was adopted by the Commissioner as the New York standard for compliance with 6 NYCRR 231-2.4(a)(2)(ii). Consolidated Edison Company of New York, Inc. (Con Ed East River), Commissioner Decision, DEC Case No. 2-6206-00012/000021, adopting the Recommended Decision of the Associate Examiner.

The Applicant, in DEC Staff's opinion, has met that burden by addressing four alternative sites within its control (Shoreham, Wading River, Port Jefferson and E.F. Barrett). These sites are addressed in Application Sections 4 and 16, as supplemented by letters to Board Secretary Deixler dated April 4, 2002 and April 16, 2002.

SHARED also asserts that under 6 NYCRR 231-2.4(a)(2)(ii), the Applicant must consider alternative sites that it does not own or control. The Applicant and DEC Staff respond that the 231-2.4(a)(2)(ii) analysis properly is limited to sites the Applicant owns or controls. They assert that no statutory or regulatory requirement encompasses other sites outside an applicant's control. In conclusion, the Applicant and DEC Staff contend that this standard is consistent with review of a private applicant because private applicants lack eminent domain authority, and is consistent with the alternatives analyses of Borden and Con Ed East River.

Lastly, the Applicant states that the discussion of the no-action alternative in Application Section 16 (16-1 through 16-4) is sufficient to satisfy the requirements of 6 NYCRR 231-2.4(a)(2)(ii) and further, that a discussion of alleged positive economic impacts of the no-action alternative, sought by SHARED, is unsupported.

Ruling: The existing Article X Application materials do not clearly satisfy the alternative sites requirements of 6 NYCRR 231-2.4(a)(2)(ii), under the Borden/Con Ed East River three prong test described above. SHARED has identified a defect or omission in the application materials. Additionally, the issue of alternative sites already is identified as an adjudicable issue in the Article X (SEQRA analogue) component of the joint proceeding.

In the DEC component of the joint proceeding, this issue is a substantive and significant defect or omission in the application materials. Normally I would require the Applicant to make an additional filing to satisfy the Borden and Con Ed East River test, subject to SHARED's review and proposed additional adjudicable issues regarding the filing. But, in the circumstances of this proceeding, administrative economy militates toward adjudicating this issue with the Article X (SEQR analogue) alternative site issues. Therefore, the issue of the Applicant's compliance with the three prong Borden/Con Ed test regarding site alternatives requires adjudication. The alternative sites to be considered are limited to sites owned or under the control of the Applicant, and further limited in this case to the four alternative sites identified by the Applicant (Shoreham, Wading River, Port Jefferson and E.F. Barrett).

Finally, in my view, the application is sufficient with respect to the no-action alternative, and does not require adjudication.

Consequently, SHARED is granted DEC party status in this joint proceeding.

3. SHARED contends that the Article X Application uses an improper build year and obsolete air pollution data, because Keyspan is precluded from going forward with this project, pursuant to a Generation Purchase Right Agreement (GPRA) with LIPA. This issue is pending before the Siting Board in the Article X component of the joint proceeding. However, for purposes of the DEC air pollution control permit review, DEC Staff responded that the application meets DEC's air program permit requirements because it is consistent with DEC air program guidance to use the best available data. Further, DEC Staff asserts that the data is 'worst case observed levels' representing regional air concentrations of criteria pollutants.

Ruling: The air quality data in the application materials is the most recent data available, as required by DEC air program staff. This proposed issue is neither substantive nor significant. No adjudicable issue is presented.

4. SHARED contends that the Applicant's use of Selective Catalytic Reduction technology (SCR) to reduce NOx emissions, will result in adverse human health effects due to an increase in fine particulate emissions through formation of secondary particulates.

The Applicant and DEC Staff note that this issue has been addressed previously. See, Matter of Consolidated Edison (East River Project), Commissioner's Decision, Case No. 2-6206-00012/000021 (August 16, 2001), and Matter of Consolidated Edison (East River Project), Recommended Decision at 109, Case No. 2-6206-00012/000021 (June 28, 2001). Further, the Applicant and DEC Staff contend that SCR meets the federal Lowest Achievable Emissions Rate (LAER) standard for PM-10, and therefore is the lowest achievable emissions rate technology to treat particulate matter for this type of project. DEC Staff added that LAER is required in the non-attainment program, and SCR is DEC Staff's preferred technology for electric power generation projects to comply with the LAER standard.

Ruling: The review of fine particulates (PM-2.5) already has been addressed in this ruling. Bench Ruling #3, supra [PM-2.5 is not a DEC adjudicable issue. But, the PM-2.5 issue will be adjudicated in the Article X component of the joint proceeding, under the Article X analogue of SEQRA]. To the extent SHARED has framed this proposed issue under its interpretation of 6 NYCRR 211.2, that argument is rejected based upon the analysis of 211.2, supra. No adjudicable issue is presented.

5. Next, SHARED contends that the Applicant's air modeling should include emissions of the nearby 110 Sand and Gravel Company. However, DEC Staff clarified that the operators of the meteorological tower at the 110 Sand and Gravel site have never applied to DEC for review and approval that the tower meets DEC's quality assurance criteria, as set forth in DEC policy memorandum DAR-2. Absent such quality assurance, DEC Staff views such meteorological data as non-conforming private monitoring data. Therefore, this data would not be meaningful.

Separately, the Town of Huntington contends that cumulative impacts, including the 110 Sand and Gravel flare, will result in accedences of SOx and NOx standards. Huntington cites Application Tables 5.16 and 5.17 (App. Vol. I, p. 5-64). However, the Applicant explained that the air modeling assumed that 110 Sand and Gravel's pending application for expansion would be granted, and used the emission limits proposed for expansion. Even then, the Applicant's modeling predicted no violations of the SOx or NOx standards. More important, DEC Staff asserts that the modeling shows that the Spagnoli Road project has no significant impact near the project; any project accedences are limited to the 110 Sand and Gravel property, which is not within the definition of ambient air (see, 40 CFR 50.1[e]).

Ruling: No adjudicable issue is presented regarding use of meteorological data from the 110 Sand and Gravel site because this issue is not substantive. First, that data is not available to DEC Staff for review and secondly, accuracy of data from that meteorological station is not assured. Further, the air modeling demonstrates that the Spagnoli Road project will have no significant air pollutant impact near the project, and any air emission accedences will be limited to the 110 Sand and Gravel property.

6. In its petition, SHARED contended that the Applicant's proposed use of oxidation catalyst technology to control emissions of volatile organic compounds (VOCs), should result in reduced VOCs emissions rates that are not represented in the draft air permit. DEC Staff clarified that Condition 73 of the draft air permit does account for the reduced emissions from the catalyst, and upon SHARED's further review of the application materials and draft air permit, SHARED withdrew this proposed issue.

7. SHARED contends that DEC Staff has characterized Keyspan as a 'significant violator' and a 'high priority violator' for its air violations, and therefore Keyspan should be denied DEC permits due to its poor record of compliance. Yet as the Applicant has pointed out, the referenced air pollution violations all are opacity violations, that are common in older power plants using certain technologies. Further, DEC Staff and the Applicant state that Keyspan has entered an Order on Consent with the Department to resolve these violations and improve compliance. Lastly, Keyspan has filed a Certification of Compliance with DEC Staff asserting that all facilities owned or under control of Keyspan either are in compliance or are on a schedule to achieve compliance.

Ruling: In view of Keyspan's Certification of Compliance and the fact that Keyspan has entered an Order on Consent with the Department to resolve the opacity violations cited by SHARED, this issue is not substantive. No adjudicable issue is presented regarding Keyspan's compliance history.

8. Finally, SHARED contends that the Applicant's emissions modeling assumed stable loads at 50% capacity, whereas the manufacturer's information indicates that loads are unstable at less than approximately 55% to 60%. DEC Staff explained that the draft permit limits operation of the turbines to at least a 50% load under normal operating conditions. However, startup and shutdown operation will necessarily include periods of operation lower than 50% load. (The startup emissions summary is presented in the Article X Application, Volume III, Appendix B, Table B-4) But, DEC Staff explained that startup and shutdown emissions have been considered in the modeling, and indicate insignificant impacts.

Ruling: SHARED's assumption is incorrect in asserting instability of loads less than 55%. This issue is neither subsntantive nor significant. No adjudicable issue has been raised regarding stability of startup/shutdown loads in the air modeling.

9. The Town of Huntington sought clarification regarding emission of hazardous air pollutants (HAPs) from combustion of detergent used in the on-line cleaning. The Applicant clarified that the detergent is butoxyethanol, which it will enter the condensers and then the combustion chamber, where it will be converted into carbon dioxide and water. The Applicant further explained that any detergent that escapes the combustion chamber would be treated in the carbon monoxide catalyst, and in any event such emissions will not exceed the regulatory limit. DEC Staff supports the Applicant's explanation.

Ruling: The Town did not pursue this issue further. In view of this explanation, this issue is deemed abandoned.

10. The Town of Huntington sought clarification why sulfuric acid is not evaluated in the multi-pathway risk assessment as a non-criteria pollutant, when its predicted annual concentration of sulfuric acid is 1.56% of the ambient guideline concentration (AGC). The Applicant adds that the USEPA has promulgated a list of persistent bioaccumulative and toxic chemicals (PBT), but sulfuric acid is not a listed PBT substance; further, that the Stipulations require risk analyses only for compounds that either exceed 10% of risk-based benchmarks, not AGCs.

Ruling: This proposed issue is neither substantive nor significant. No adjudicable issue is raised.

11. The Town of Huntington sought clarification regarding the sulfur content of the proposed natural gas fuel for the facility.

DEC Staff noted that Draft Air permit condition #78.2 requires the Applicant to verify the sulfur content of the natural gas fuel, as required by 40 CFR 60.334(b).

Ruling: This proposed issue is neither substantive nor significant. No adjudicable issue is raised.

IV. Proposed SPDES Issues

12. Both SHARED and the Town of Huntington contend that a general SPDES permit to regulate stormwater discharges during construction should be required. However, DEC Staff clarified that such discharges are regulated under the draft industrial stormwater discharge permit. The Applicant adds that a sediment and erosion control plan for the facility will be implemented during the construction phase of the project (see, SPDES Application at 5; Article X Application at 7-44), and further, a stormwater pollution prevention plan also will be implemented during the construction phase (see, Article X Application at 3-29).

Still, Huntington contends that the sediment and erosion control plan in the Application is a preliminary plan, not a final plan. Nonetheless, the Town has not identified any defect or omission in that plan(see, Article X Application at 7-52 and Figures 7-11 [a] through [c]). In addition, Huntington asserts that the Applicant should submit the stormwater pollution prevention plan before SPDES permit issuance so that the Town may comment upon it. However, the Town has not identified any statute or regulation requiring submittal of the stormwater pollution prevention plan at this stage of the project review.

Ruling: Construction phase stormwater discharges will be adequately regulated under the draft industrial SPDES permit. Huntington has not identified any substantive issue with respect to the sediment and erosion control plan. This proposed issue is not a substantive and significant issue requiring adjudication. Nor is the Applicant required to submit a stormwater pollution prevention plan during this stage of the project review.

13. The Town of Huntington contends that pursuant to ECL Articles 17 and 70, the Best Management Plan (BMP) should be in place prior to operation of the facility. The DEC Staff responded that the draft industrial SPDES permit effectively requires the BMP to be in place prior to operation, but with the Applicant's consent, agreed to revise the draft SPDES permit explicitly to require that a BMP must be in place prior to operation of the facility. On that basis, this proposed issue has been resolved to the Town's satisfaction. This issue is deemed withdrawn.

14. Next, the Town of Huntington contends that pursuant to 40 CFR 112, the draft industrial SPDES permit should require a licensed professional engineer (PE) to review components of the project where toxic or hazardous pollutants are used. DEC Staff responded that PE review is required for certain components of the project such as the Spill Prevention Control and Countermeasure plan, but not for the complete BMP. The Applicant contended that 40 CFR 112 is not applicable due to the distance of the project from a surface body of water (approximately 2.5 miles from Massapequa Creek). Nevertheless, the Applicant agreed to comply with the provisions of Suffolk County Code, Article 12, which requires PE review of the proposed ammonia storage tank for the project.

Ruling: The Applicant's agreement to comply with Suffolk County Code, Article 12, largely resolved the Town's concerns regarding this issue. The parties stated that they would discuss this further. However, in any event, this proposed issue is a minor issue in review of the project, and does not meet the standard for a substantive and significant issue requiring adjudication. (But, as noted, supra, compliance with local laws is an issue for adjudication in the Article X component of the joint proceeding).

15. Lastly, the Town of Huntington expressed concerns regarding details of petroleum bulk storage at the site, regulated pursuant to 6 NCYRR Parts 595 to 599.

Ruling: Petroleum bulk storage issues are not within the jurisdiction of the DEC component of this joint proceeding, since petroleum bulk storage is not a federally delegated environmental program. This is not an issue within DEC's Article X regulatory authority, but instead is an issue for review in the Article X component of this joint proceeding, if at all.

16. SHARED contends that the application materials do not contain an adequate discussion of the size of proposed raw and demineralized water storage tanks. DEC Staff asserts that this is extraneous information in the industrial SPDES permit application, and was not relied upon by DEC Staff in preparing the draft SPDES permit. In sum, DEC Staff contends that this issue would more appropriately be addressed, if at all, in the Article X component of the joint proceeding.

Ruling: SHARED has not identified any statutory or regulatory requirement supporting this proposed issue. Moreover, the draft industrial SPDES permit does not address water storage tank size. Accordingly, this is not a substantive and significant issue requiring adjudication in the DEC component of the proceeding.

17. Next, SHARED contends that the application fails to provide adequate information regarding characterization of impervious surfaces and the quantity of additional runoff that will be generated by such surfaces. But, Keyspan identified SPDES permit application Figure A3, depicting the site drainage plan and Figure A4 (A through C), depicting the soil erosion and sediment control plan. Also, the daily stormwater runoff for each outfall from the facility is provided in the NY-2C form for outfalls 001, 002, 003, 004 and 005, based upon the impervious surfaces depicted in Figures A3 and A4. Keyspan explained that the peak runoff rates for the collection system design assumed a 100-year storm event. Lastly, Article X Application Section 7.5.4 addresses the stormwater system and erosion control.

Ruling: The application is adequate in characterizing impervious surfaces. This proposed issue does not meet the standard for a substantive and significant issue requiring adjudication.

18. SHARED contends that the SPDES application does not identify the class of groundwater at the site, and therefore it is not possible to determine whether the pH range of the anticipated SPDES stormwater discharge will meet New York standards. Further, the waters are class GA, and the discharge pH indicated in the application materials would fall outside the range specified in the regulations for class GA waters. Therefore, SHARED contends that the Applicant should be required to install a pH neutralization system to adjust the pH within the specified range. However, DEC Staff responded that acidity of discharges will be monitored through Discharge Monitoring Reports (DMRs). The Applicant contends that the acidic pH levels indicated represent the pH range of rainfall in the Northeast United States, which sometimes has a low pH (acidic).

Ruling: The pH range identified for stormwater reflects the prevailing pH of 'acid rain' precipitation in the northeast. In the event DMRs indicate discharge accedences, DEC Staff retains authority to impose remedial measures. This proposed issue is not substantive. Therefore, this proposed issue does not require adjudication.

19. SHARED has proposed several issues alleging deficiencies or other defects in the Applicant's Industrial Application Form NY-2C. First, SHARED contends that the Applicant's Industrial Application Form NY-2C is deficient, in that no backup calculations are provided. DEC Staff and the Applicant contend that backup calculations are not required, but could be sought through discovery.

Second, SHARED contends that item 19, under the heading 'Average Annual Usage' (of on-site chemicals), should be completed during this application review, to provide the public with an opportunity to evaluate this information.

Lastly, SHARED asserts that Form NY-2C contains an apparent inconsistency between the Water Balance Diagram and values provided in the project description. However, the Applicant explained that these differences are due to rounding off.

Ruling: As the Applicant and DEC Staff have noted, SHARED has not identified any statutory or regulatory provision to require such information at this stage of the project review. Moreover, DEC Staff and the Applicant conclude that such information usually is not required until operations commence. In addition, SHARED has not demonstrated why this application differs from others, so that this information should be made available at this stage of the proceeding. This issue is neither substantive nor significant. No adjudicable issue has been raised regarding deficiencies in Form NY-2C.

Appeals

A ruling of the ALJ 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 Commissioner on an expedited basis.(5) Ordinarily, expedited appeals must be filed to the Commissioner in writing within five days of the disputed ruling.(6)

Allowing extra time due to the length of these rulings, any appeals must be received by the Commissioner (Office of the Commissioner, N.Y.S. Department of Environmental Conservation, 625 Broadway, Albany, New York, 12233-1010) before 4:00 p.m. on July 3, 2002. All replies to appeals must be received before 4:00 p.m. on July 10, 2002.

Persons filing an appeal or reply also must send three copies of any appeal and reply to the Administrative Law Judge/Associate Examiner. Participants who use word processing equipment to prepare the brief and reply must also submit a copy of their appeal and reply to the ALJ/Associate Examiner in electronic form on a 3.5 computer disk formatted in either WordPerfect for Windows 6.1, 7.0 or 8.0, or alternatively, formatted in WordPerfect for Windows or Microsoft Word. Alternatively, parties may file an electronic copy via e-mail at 'kjcasutt@gw.dec.state.ny.us', to be followed by three paper copies by first class mail, postmarked by the date(s) specified above.

The participants shall ensure that transmittal of all papers is made to the ALJ/Associate Examiner and all others on the service list at the same time and in the same manner as transmittal is made to the Commissioner. No submissions by telecopier will be allowed or accepted.

Appeals should address the ALJ/Associate Examiner's rulings directly, rather than merely restate a party's contentions.

_____________/s/_____________
Kevin J. Casutto
Associate Examiner and
Administrative Law Judge

Dated: June 21, 2002
Albany, New York

To: Attached Keyspan/Spagnoli Distribution List

(dated May 14, 2002)

1 See Department of Public Service Case No. 01-F-0761, Application by Keyspan Energy Development Corporation for a Certificate of Environmental Compatibility and Public Need to Construct and Operate a Nominal 250 Megawatt Combined Cycle Combustion Turbine Electric Generating Facility in the Town of Huntington, Suffolk County, New York.

2 §624.4(c)(4).

3 §624.4(c)(3).

4 See, Republic Environmental Systems, Inc., Commissioner's Interim Decision and Order, Case # C1-1949-93-06, December 29, 1993, adopting ALJ Ruling [6 NYCRR 211.2 adopts the common law of nuisance and applies it to air emissions . . . Thus to show a nuisance or violation of 211.2, there must at least be facts presented to demonstrate the effect of the air emissions on particular persons' comfortable enjoyment of their life and property. Then those effects must be balanced against the right of the facility to make reasonable use of its property in all the circumstances.]; and, Town of Huntington (Incinerators), Commissioner's Order, Case #1-1873, May 17, 1989 [The record in this case clearly indicates that Respondent committed repeated and continuing violations of 6 NYCRR Section 211.2 . . . [so] as to unreasonably interfere with nearby residents' quiet enjoyment of their property . . . The determination of unreasonableness under 6 NYCRR 211.2 . . . , as in the common law of nuisance, requires consideration not only of effects of the emissions on the surrounding residents, but also of the efforts made by the facility to mitigate the problem.]

5 624.8(d)(2).

6 624.6(e)(1).

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