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Mirant Bowline, LLC - Interim Decision, June 20, 2001

Interim Decision, June 20, 2001

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550

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 -

Mirant Bowline, LLC,
(formerly Southern Energy Bowline, LLC)

Case No. 3-3922-0003/00015

SPDES No. NY0264342

INTERIM DECISION

June 20, 2001

INTERIM DECISION

Introduction and Background

This interim decision relates to appeals from the issues rulings ("Ruling") of Administrative Law Judge (ALJ) Kevin J. Casutto issued on March 30, 2001, regarding the application of Mirant Bowline, LLC, (the "Applicant" or "Mirant") for an Environmental Conservation Law ("ECL") Article 17, State Pollutant Discharge Elimination System ("SPDES") permit and air pollution control permits pursuant to ECL Article 19 and Parts 200 et seq. The ALJ's ruling was issued separately from the Presiding Examiner's issues ruling in the concurrent Article X proceeding being conducted under the Public Service Law ("PSL").

Mirant seeks to construct and operate a 750 megawatt (MW) combined cycle electric generating facility. The Facility would consist of three General Electric 7-FA combustion turbine generators (CTG), three heat recovery steam generators (HRSG), one steam turbine generator (STG) with associated balance-of-plant systems and facilities. The primary fuel would be natural gas. Low sulfur (0.05%) fuel oil would be used for backup.

The proposed facility would be located next to two existing power facilities, Bowline Units 1 and 2, off Samsondale Avenue in the Town of Haverstraw, Rockland County, New York, on part of a 257-acre parcel owned by the Applicant. The entire project area is zoned Planned Industrial Office. The project site is bounded on the east by Bowline Point Park and the Hudson River, on the west by a public park (Peck's Pond), on the south by combined residential and light industry properties, and on the north by Keahon Auto Wreckers. Also to the north are approximately 97 acres of vacant land which also are part of the 257-acre Bowline Generating Station property.

Standards for Adjudication

The Department's standards for deciding what issues should be joined for adjudication are long established since 1981. Clarification of those standards by the Commissioner has occurred over time to help guide the parties. The amended Department hearing rules promulgated effective 1994 provided additional guidance.

An issue is adjudicable if "it is raised by a potential party and is both substantive and significant." 6 NYCRR 624.4 (c)(iii). An issue is substantive if there is sufficient doubt about the applicant's ability to meet statutory or regulatory criteria applicable to the project, such that a reasonable person would require further inquiry. An issue is significant if it has the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit. 6 NYCRR 624.4(c)(2),(3).

A substantive issue can be demonstrated by identifying a substantive defect or omission in the application materials. 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. Prior Department decisions establish that adjudication of issues occurs only where, in the ALJ's judgment, there is a reasonable likelihood that adjudication would result in amended permit conditions or project denial. In the Matter of Jay Giardina, Interim Decision of the Commissioner, September 21, 1990. The purpose of adjudication is not simply to develop or refine information concerning the project but rather to aid in decision making. In the Matter of Sithe/ Independence Power Partners, Interim Decision of the Commissioner, November 9, 1992.

Judgments about the strength of the offer of proof must be made in the context of the application materials, the analysis by Staff, draft permits and the issues conference record. Offers of proof submitted by a prospective intervenor may be completely rebutted by reference to any of the above, alone or in combination. See, Matter of Bonded Concrete, Inc., Interim Decision of the Commissioner, June 4, 1990.

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

The DEC ALJ has a gatekeeping role to sort offers of proof and decide which issues are critical to permit issuance, denial or imposition of significant permit conditions. All others must be rejected or otherwise can be treated in the Commissioner's discretion. My review will largely center on the ALJ's application of the substantive and significant test.

Appeals

On April 10, 2001, appeals were filed by Department Staff ("Staff"), the County of Rockland (the "County"), and the Riverkeeper and Scenic Hudson (the "Petitioners"). Replies to the appeals were filed on April 19, 2001 by Staff, and by Mirant.

The ALJ's Ruling

The ALJ held that:

Riverkeeper, Scenic Hudson, the County of Rockland and the Village of Haverstraw each have raised substantive and significant issues for adjudication and are granted party status. Riverkeeper and Scenic Hudson, joint Petitioners, have raised substantive and significant issues for adjudication concerning the requirements outlined in §316(b) of the federal Clean Water Act and 6 NYCRR §704.5 for the implementation of the best technology available for minimizing adverse environmental impacts from the proposed cooling water intake structures, including the Applicant's proposed Gunderboom.

The County of Rockland and the Village of Haverstraw each have identified substantive and significant omissions and defects in the Application regarding the design, configuration and number of cooling towers comprising the proposed hybrid cooling system and all emissions of regulated air pollutants emitted from the proposed hybrid cooling system, as required by 6 NYCRR 201-6.3(d)(3)(i). The Village has raised an adjudicable issue and therefore is granted party status.

Further, the County has identified other adjudicable issues concerning emission control technology for ammonium sulfate and the PM10 BACT limitation in the draft Air permit.

The County has identified three adjudicable issues, and therefore is granted party status.

The Rockland County Conservation Association and the Passaic River Coalition, Joint Petitioners, failed to raise any DEC substantive and significant adjudicable issue. Therefore, the joint petition of RCCA and PRC for DEC party status must be denied. Ruling at 1-2.

The ALJ found the record should be developed regarding the best technology available ("BTA") for minimizing adverse environmental impacts from the proposed cooling water intake structures or dry cooling, and the Applicant's proposed BTA, the Gunderboom technology. With respect to the omission and defects regarding cooling towers and associated emissions of regulated pollutants, additional information was supplied by the Applicant and no party disputed the information.

Lastly, the ALJ held that the issues concerning emission control technology for ammonium sulfate and particulate matter 10 microns ("PM10") Best Available Control Technology ("BACT") limitation in the draft Air permit should be developed on the record as well. With the exception of the Selective Catalytic Reduction ("SCR"), PM10 and BACT issues, this interim decision overall affirms the ALJ's rulings as more fully addressed below.

Appeal, Response and Discussion

For organizational purposes each of the appeals and the responses to the appeal are presented, followed by a brief discussion.

DEC Staff Issues on Appeal

DEC Staff appeal the ALJ's ruling 13, that identified as an issue for adjudication the inclusion of emission limitations to be achieved by use of the SCR System, proposed by the Applicant and approved by Staff. Staff also appeals ruling 17, of the ALJ's Ruling holding that the County raised an adjudicable issue with respect to PM10, BACT limitation in the Staff's Subpart 201-6 Air Permit, and whether other states have established BACT emission limits lower than the draft permit limit for similar projects. Staff states that the "...issue of BACT should only be addressed in the responsiveness summary required of the Department prior to the issuance of a revised Prevention of Significant Deterioration ("PSD") permit and the subsequent decision making process pursuant to 40 CFR Part 124." Staff appeal at 2.

Discussion

SCR, PM10 and BACT

Both ALJ Rulings 13 and 17 join the issue of gaseous and PM10 emission rates from Bowline 3. Mirant did not appeal these rulings. Staff's appeal suggests that PM10 can never be adjudicated because it is linked to the PM10 BACT analysis performed by Mirant in its PSD analysis. PSD cannot be subjected to an evidentiary proceeding. See 40 CFR 124 and the discussion below. Under Staff's theory, any issue related to the federal PSD analysis cannot be subjected to a Departmental evidentiary hearing. Staff's exclusive emphasis on the federal PSD permit review is misplaced.

While PSD matters are not adjudicable by the states pursuant to the federal rule at 40 CFR 124, gaseous emissions and PM10 emissions can be adjudicated under the autonomous authority of the state air permit in Part 201. No prohibition exists in Part 201 or any state air rule preventing the evidentiary review of facts pertaining to the state permit. Based upon an adequate offer of proof, the Department may examine why the subject facility should not be required to meet a lower PM10 emission rate if it is shown that comparable facilities are obtaining such lower rates. The same principle applies to the gaseous emission rate when comparable facilities also obtain a lower rate.

If DEC Staff's position were the case, any emission rates made part of the state air permit would never be adjusted downward when lesser emission rates were reasonably attainable. Any lower emission rate demonstrated for Bowline 3 after hearing would be incorporated into the Part 201 state air permit. That emission rate would never exceed the rate expressed in the PSD, i.e., it may be more but not less restrictive. In other words, the more restrictive state-imposed (Part 201) emission rate would always apply and would serve as the ceiling not to be exceeded.

The County's PM10 assertion stems from its expert who states that the PM10 rate appears to be an underestimate, compared to other PSD applications. County petition at 19-20. This assertion is vague and speculative. No specific information was presented in the petition or the issues conference that would cause one to inquire further. Appearances of underestimates are inadequate to raise an issue. My review of the petition, transcript, and appeals further shows that no issue is raised about SCR, or PM10 BACT.

Rockland County

The County appeals certain issues rejected by the ALJ and they will be stated in the order presented in the appeal.

Ruling 3, that the PSD permit application is properly processed by DEC under the federal program and are not subject to the procedural provisions of ECL Article 70 or the State Administrative Procedures Act ("SAPA").

Ruling 4, as appealed, to clarify that the PSD process is subject to Uniform Procedure Act ("UPA")and therefore, as claims the County, the PSD review must be subjected to the Department's substantive and significant standard and must be adjudicated.

Ruling 18, that Staff correctly determined that the liquid ammonia storage tanks are a combustion source, not a process source, therefore rejecting the County's argument that the emissions are subject to the regulatory requirements of 6 NYCRR Part 212.4 regardless whether the ammonia tanks are a process or a combustion source.

Ruling 25, rejecting the County's argument that the State Facility air permit cannot constitute the equivalent of a Title V Permit. The County seeks to schedule this legal issue for briefing.

All of the County's appeals pertain to legal issues and not to factual issues.

Mirant's and Staff's Response to the County

Mirant replies that the issue of the PSD applicability is not subject to the procedural provisions of ECL Article 70 or SAPA. Mirant Response at 2, citing, Matter of Ramapo Energy Limited Partnership, Interim Decision, April 4, 2001. See, ALJ Ruling 3 and 4. With regard to the County's preference to adjudicate an issue solely upon a commentor's contention, as rejected by the ALJ, (ALJ Ruling 4), the County does not provide any statutory authority supporting its theory that the PSD permitting should be subject to ECL Article 70. Mirant Response at 3. Staff also cites to the Interim Decision and the ALJ's Ruling in Ramapo, supra, agreeing that PSD is not subject to state UPA or SAPA, and the ALJ's ruling is consistent with 40 CFR 52.21 and 124. Staff Response at 9.

Regarding ALJ Ruling 18 rejecting the County's argument that liquid ammonia storage tanks are a combustion source, Mirant responds that the storage tanks are an exempt activity and are not subject to 6 NYCRR Part 212, Table 2 and further, the County has not made an adequate offer of proof in that its offer is speculative. Mirant Response at 5 citing transcript at 562. Staff replies that the tanks are not subject to Part 212 since the ammonia storage tanks are part of the combustion installation and not process operations. Further, the County has offered no calculations to demonstrate there will be ammonia emissions or that such emissions would invoke Part 212. Staff Response at 10.

Respecting ALJ Ruling 25, Part 201-6.3 of 6 NYCRR allows a new stationary source to obtain its Title V permit within one year of commencement of operations and there is no requirement that a six month certification, as charged by the County, is needed. Staff Response at 9-10.

Discussion

PSD Applicability to ECL Article 70 and SAPA

I have already determined that PSD is not subject to the procedural provisions of ECL Article 70 and SAPA. See, Matter of Ramapo Energy Limited Partnership, Interim Decision, April 4, 2001. Accordingly, ALJ Ruling 3 is affirmed.

Liquid Ammonia Storage Tanks

The concern expressed by the parties is whether the liquid ammonia storage tanks are part of the 'process' operation or 'combustion' installation. This concern was not well addressed in the appeals or on the record. However, this issue has not been shown to be significant and therefore is not an adjudicable issue.(1)

Title V Permit

The Applicant may obtain a federal Title V permit within one year of commencement of its operation and need not obtain such permit at this time. No issue is raised.

Riverkeeper and Scenic Hudson (Petitioners)

Petitioners appeal that portion of ALJ Ruling 7, in that it fails to recognize or address the factual dispute of Petitioners that its offer of proof showed how the uniquely toxic characteristics of the effluent will violate water quality standards, and also showed that Staff's and Applicant's reliance upon the CORMIX model to predict levels of effluent is misplaced. Petitioner's Appeal at 5.

Petitioners also appeal ALJ Ruling 9, rejecting inclusion of their offer of proof raising doubt about the CORMIX models' ability to accurately predict the dispersion of pollutants. Petitioner's Appeal at 9-10 citing transcript p. 265. They assert the CORMIX model is being misused by relying on false assumptions regarding depth of the proposed discharge. Petitioner's Appeal at 10.

Petitioners further bolster their above assertions by arguing the use of the dry cooling alternative would avoid the 'toxic' effluent discharge to the Hudson River. Petitioner's Appeal at 13.

Mirant's and Staff's Response to Petitioner's

Mirant responds that Petitioners do not raise an issue with respect to the concern that the proposed effluent from Bowline 3 will violate water quality standards and harm aquatic biota. Further, Mirant responds that Petitioners make no offer of proof to show that the USEPA's approved CORMIX computer modeling was misused by the Applicant. Mirant further disagrees with Petitioner's linkage of the proposed outfall diffuser with criteria established under the federal Clean Water Act and/or the state water quality standards relative to design and operation of an appropriate intake structure. Mirant states that the standards applicable to review of a proposed discharge are related to compliance with ambient water quality criteria and the proposed discharge diffuser meets all applicable standards for Class SB waters. Mirant Response at 7.

Staff responds that ALJ Ruling 9 be affirmed. According to Staff, the Draft SPDES permit conditions developed by Staff regulates the bromine effluent discharge by applying the standard for residual chlorine. Further, the CORMIX analysis confirms that the effluent discharge will reach a minimum of a 18:1 dilution within the applicable near field mixing zone, which results in bromine ambient levels below the applicable water quality standard for residual chlorine. Staff's Response at 3-5.(2)

Regarding the CORMIX model used by Mirant, Staff conducted an independent model run which confirms the 18:1 dilution factor will be met within 8 meters of the discharge point. Staff asserts Petitioner's offer of proof fails to raise sufficient doubt about Mirant's ability to meet Staff's imposed SPDES permit condition. Moreover, the effluent limit imposed and the dilution factor protect the significant coastal fish and wildlife habitat area because the Staff's independent CORMIX modeling confirms the discharge effluent will be below aquatic acute (A(A), or toxic, standards within the mixing zone. Staff assert that Petitioner's intention to force Mirant to use dry cooling technology because the quantity and concentration of the effluent would be less than that associated with the proposed hybrid cooling technology, is misplaced since the independent modeling by Staff demonstrates the proposed discharge will meet water quality standards. Staff Response at 7.

Discussion

CORMIX Modeling and Draft SPDES Permit Conditions

The concern is whether the proposed effluent discharge will meet ambient water quality criteria and whether the proposed discharge diffuser meets all applicable standards for Class SB waters. Staff's evaluation of Mirant's effluent modeling and their independent CORMIX modeling confirms the 18:1 dilution factor contained in the Draft SPDES permit will be met. There is no adequate contrary offer of proof to suggest the applicant cannot meet the effluent limits made part of the Draft SPDES permit. Moreover, there is no offer of proof to show misuse of the CORMIX model by Mirant. CORMIX modeling was preformed under simulations of varying tidal conditions that could possibly adversely impact natural resources and, as above, the application of the modeling was not found by Staff to be unacceptable. Accordingly, I affirm the ALJ's ruling on this point for the reasons stated therein.

The other matters raised on appeal by the parties that are not specifically addressed are rejected for the lack of an offer of proof, or are speculative or otherwise are without merit and are rejected.

Miscellaneous

There is some confusion among the issues conference participants about the distinction between expedited appeals as of right from an ALJ's issues ruling, and expedited appeals for which leave must be sought.

All ALJ rulings on issues proposed for adjudication (the ALJ's issues ruling) are subject to expedited appeal as of right on the appeal schedule established by the ALJ. Section 624.8(d)(2) of 6 NYCRR provides for four categories of expedited appeals as of right, including:

  1. a ruling to include or exclude any issue for adjudication;
  2. a ruling on the merits of any legal issue made as part of an issues ruling;
  3. a ruling affecting party status; and
  4. any ruling in which the ALJ has denied a motion for recusal. (Emphasis added).

Section 624.8(d)(2)(v) contains a provision governing motions for an expedited appeal of "any other ruling" not specified in 624.8(d)(2)(i) through (iv). These motions, which are entertained only at the Commissioner's discretion, are intended to address situations where "the failure to decide such an appeal would be unduly prejudicial to one of the parties or would result in significant inefficiency in the hearing process." 6 NYCRR 624.8(d)(2)(v). The purpose of this portion of the regulation (to require leave for only certain appeals) is underscored by the subsection immediately following, which states that "[a] motion for leave to file an expedited appeal must demonstrate that the ruling in question falls within one of the categories set forth in subparagraph 2(v) of this subsection." 6 NYCRR 624.8(d)(3). Accordingly, the motion must seek leave to appeal a ruling that, if left undecided, would prejudice a party or encumber the hearing process.

Finally, at the conclusion of the hearing, any issue may be appealed, pursuant to Section 624.8(d)(1).

Accordingly, any pending motion for leave to file an expedited appeal of the ALJ's issues ruling in this matter is hereby converted to an appeal as of right of the ALJ's ruling.

Conclusion

The only matter remaining for adjudication regarding the delegated permits is the BTA issue, which was not appealed. The Village of Haverstraw has withdrawn its request for party status in this proceeding. The County's issues are addressed above and none remain regarding the delegated permits. Accordingly, the County is denied party status, although I note that the County is a party in the Article X proceeding.

This matter is remanded to the ALJ for further proceedings consistent with the direction above.

For the New York State Department
of Environmental Conservation

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

Dated: Albany, New York
June 20, 2001

1 An issue is significant if it has the potential to result in the denial of a permit, a major modification to the proposed project or the imposition of significant permit conditions in addition to those proposed in the draft permit. 6 NYCRR 624.4(c)(2),(3).

2 Staff has amended its results from 20:1 to 18:1 and concludes that the dilution factor will be met.

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