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Mirant Bowline, LLC - Ruling, March 30, 2001

Ruling, March 30, 2001

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., 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,
900 Ashwood Parkway, Suite 900
Atlanta, Georgia 30339-4780,

Applicant

RULING ON PROPOSED
ADJUDICABLE ISSUES
AND PETITIONS FOR
PARTY STATUS

DEC No.
3-3922-0003/00015

and

SPDES No.
NY0264342

[March 30, 2001]

Summary

Four petitions for Department of Environmental Conservation (DEC) party status were filed regarding the DEC application for air pollution control permits and State Pollutant Discharge Elimination System permits for this proposed electrical generation project. A related siting hearing, pursuant to Public Service Law (PSL) Article X is pending, and the issues conference was a joint DEC and PSL Article X issues conference. The DEC ALJ also is the PSL Article X Associate Examiner.

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.

Introduction

In August 2000, Mirant Bowline, LLC (formerly Southern Energy Bowline, LLC; the Applicant or Mirant), 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 permits pursuant to Articles 17 and 19 of the Environmental Conservation Law (ECL), 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.

Proceedings

Mirant's Application for a PSL Article X certificate also included a request for a State Pollutant Discharge Elimination System (SPDES) permit and Air Pollution Control permits (the permits required pursuant to 6 NYCRR Parts 201 and 231). The proposed facility would withdraw process water from the Hudson River for cooling purposes. A portion of the cooling water would evaporate into the atmosphere. The balance of the process water would be returned to the river. The Staff of the N.Y.S. Department of Environmental Conservation (DEC Staff) reviewed Mirant's SPDES and Air permit Applications, and subsequently developed draft SPDES and Air permits, dated January 16, 2001 (including a single draft permit dated January 16, 2001, captioned 'Air State Facility Permit' pursuant to 6 NYCRR Parts 201 and 231; hereinafter, the draft Air permit[s](2)).

Subsequently, on February 13, 2001, Mirant revised its water intake and cooling proposal from a mechanical draft cooling system to a hybrid cooling system with an intake structure including a Gunderboom. Mirant has explained that the primary reason for revising the cooling/intake proposal is to reduce cooling tower steam plumes, thereby further reducing adverse visual impacts of the project. Consequently the Draft SPDES permit does not address the recently proposed hybrid cooling system.

Although the draft SPDES permit does not address the revised cooling/intake proposal, Mirant contends that the hybrid cooling/Gunderboom system will comply with all terms and conditions of the draft SPDES permit. DEC Staff agrees with this assessment.

A DEC Combined Notice of Complete Application, Public Hearing and Issues Conference (the Notice) was published in the DEC's electronic Environmental Notice Bulletin on January 17, 2001 and appeared as a legal notice in the Rockland Journal News on January 18, 2001, the Rockland County Times on January 25, 2001 and the Rockland Review on January 26, 2001. In addition, copies of the Notice were sent to the parties to the related PSL Article X proceeding, as well as to the required governmental officials and to many individuals who had expressed an interest in the proposed facility.

The Notice included descriptions of the proposed electric generating facility and the nature of the point sources for the anticipated waste water discharges. In addition, the Notice provided for a 35 day comment period, and advertised the schedule for a legislative hearing and an issues conference.

The legislative hearing session was held on February 21, 2001 at 6:30 p.m., at the Haverstraw Town Hall, 1 Rosman Road, Garnerville, New York. Approximately 40 people attended the legislative hearing session where a total of 8 people presented oral statements, five of whom were trade unionists in support of the economic development that the project would represent during the construction phase. No written comments were filed by mail.

Those who spoke in opposition were concerned about the cumulative public health impact of this project and three other power generation projects proposed in Rockland County, the DEC Staff's determination that the proposed cooling water discharges would not degrade the water quality of the receiving Hudson River waters and lastly, that the potable water requirements of the project may overburden the water supply for this area of Rockland County, served by United Water New York, Inc.

The related PSL Article X hearing concerning Mirant's request for a Certificate of Environmental Compatibility and Public Need commenced with public comment sessions and a prehearing conference in September, 2000. The DEC Notice advertised a joint prehearing conference pursuant to PSL

Article X and issues conference pursuant to the ECL (the joint issues conference), commencing on March 6, 2001 at the Haverstraw Town Hall, to be continued on successive days as necessary. However, due to inclement weather, the joint issues conference was postponed until noon on March 7, 2001 and was continued on March 8, 2001.

PSL Article X Presiding Examiner, Hon. Gerald L. Lynch, and I (as Associate Examiner) co-presided during this joint issues conference. Presiding Examiner Lynch 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.

Timely filings were received from four groups seeking DEC party status. A joint petition of Riverkeeper, Inc., and Scenic Hudson, Inc., dated February 16, 2001, identified five issues for adjudication. Riverkeeper was represented by David K. Gordon, Esq., Staff Attorney, and Pace University School of Law, Pace Environmental Litigation Clinic, Inc., by Karl Coplan, Esq., Co-Director and Supervising Attorney and Jason Rich, Legal Intern. Scenic Hudson was represented by the Pace Energy Project, John G. Williams, Esq., of counsel.

A joint petition of the Rockland County Conservation Association, Inc., and the Passaic River Coalition dated February 17, 2001, identified two issues for adjudication. These groups appeared by Dr. Anne Kruger.

A petition of the County of Rockland dated February 17, 2001 identified 55 issues for adjudication. The County initially appeared by Steven J. Powers, Assistant County Attorney, and later in the proceeding by Devorsetz, Stinziano, Gilberti, Heintz & Smith, P.C., John Klucsik, Esq., and N. Jonathan Peress, Esq., of counsel.

The Village of Haverstraw filed two letters (with attachments) dated February 20, 2001, comprising comments and proposed substantive and significant issues for adjudication related to the draft Air permits. The Village appeared by the law firm of Cohen, Dax and Koenig, David Allen, of counsel.

The DEC Staff was represented by Meghan A. Purvee, Esq., and Richard Williams, Esq.

The Applicant was represented by the law firm of Couch White, Algird White, Esq., and Barbara Brenner, Esq., of counsel.

The stenographic record of the March 7 and 8, 2001 joint issues conference (and the February 21, 2001 DEC legislative hearing) were received by March 14, 2001. The issues conference participants were provided an opportunity to file briefs on one issue by March 14, 2001, on which date the joint issues conference record closed.

The Applicant used the USEPA sponsored Cornell Mixing Zone Expert System modeling package (CORMIX Version 4.03b; hereinafter, CORMIX) to evaluate the performance characteristics of alternative discharge configurations for Bowline Unit 3 cooling tower blowdown. Options considered included use of the existing Bowline Units 1 and 2 outfall pipes and discharge diffusers or construction of a new discharge diffuser for Bowline Unit 3. After the joint issues conference sessions, by letter dated March 15, 2001, Mirant filed a letter and technical documentation stating that its consultant has performed an additional CORMIX analysis that simulates the worst-case conditions under the draft SPDES permit. This filing is addressed in Ruling #9, infra.

Rulings on Procedural Issues

The County raised several procedural issues regarding the joint issues conference that are addressed below, joined by the Village on one issue.

The Federal Delegation Issue

First, the County asserts that because it is a party of right in the related PSL Article X proceeding, consequently the County is a party of right to the DEC proceeding. Further, the County 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, do not apply. The County contends that the PSL Article X standards apply exclusively to the New York review of permits necessary for the project.

The County's first contention was addressed previously and rejected by the Commissioner.

"The obvious desirability for a joint government hearing in future Article X's aside [footnote omitted], the ALJ's granting of party status in the Department's hearing to those who participated in the Article X proceeding, fails to strictly follow the Department's pre-adjudicatory hearing rules. His ruling misapplies the Department's regulatory standard by assuming the related Article X facts carried into this SPDES proceeding would automatically confer party status."

See, Athens Generating Co., LP, Commissioner's Interim Decision (Athens Interim Decision; June 2, 2000) at 6.

The history of the federally delegated SPDES program is recounted in the Athens Issues Ruling. Athens Generating Co., LP, ALJ's Issues Ruling (Athens Ruling; April 26, 2000) at 6. That analysis applies equally to the federally delegated Air program. Briefly, in November 1999, NYS Governor Pataki signed legislation that amended PSL Article X and sections of ECL Article 17. These amendments, among other things, clarify the DEC's authority to issue SPDES and Air permits for new major electric generating facilities. Correspondence between the DEC Commissioner and the U.S. Environmental Protection Agency (USEPA) Administrator from November 1999 through February 2000 confirmed that these amendments removed the legal impediments from state statutes that previously had prevented the DEC from issuing federally delegated permits for major electric generating facilities.

This correspondence confirmed that the DEC SPDES permit review in Athens would adhere to the Uniform Procedures set forth in ECL Article 70 (the Uniform Procedures Act), which is fully consistent with the mandates of both PSL Article X, and the DEC's SPDES authorization from EPA. The DEC Commissioner confirmed that DEC would primarily rely on the Uniform Procedures Act,(3) and would use the procedures outlined in PSL Article X only when those procedures are consistent with the procedural requirements of the DEC's federally delegated program(4). See, generally, Athens Ruling, supra, p. 6 - 7. In sum, federal environmental permitting delegation has not been given to the Siting Board.

Ruling #1: The County's view is erroneous and must be rejected. DEC is the permitting agency for federally delegated permits, including SPDES and Air permits, with respect to permit applications for new major electric generating facilities. The DEC Uniform Procedures Act and permit hearing procedures, ECL Article 70 and 6 NYCRR Parts 621 and 624, including the DEC standards for party status and issues identification, are the applicable procedures for review of the Bowline 3 Air and SPDES permits. The substantive and significant standard outlined in 6 NYCRR §624.4(c), will be applied to the issues proposed by Petitioners in the DEC permit hearing. As in any DEC permit hearing, if a proposed issue is not substantive and significant, then an adjudicatory hearing is not necessary.

ECL Article 8, SEQRA, and PSL Article X

Next the County contends that the State Environmental Quality Review Act (SEQRA) exemption of ECL §8-0111[5] relates only to Environmental Impact Statement (EIS) and Findings provisions, but that the DEC must require the "functional equivalent" of SEQRA. Under the exemption for power plant siting, the County contends that DEC must assure that the project "minimizes adverse impacts". (The County's contention here appears to be in contradiction to their first procedural objection, where the County contends that the PSL Article X standards apply exclusively to the New York review of permits necessary for the project.) Further, the County contends that the DEC determination of completeness of the Air and SPDES permit applications was issued in advance of the environmental review required to be conducted under the PSL Article X process. The County concludes that DEC Staff's completeness determination was premature.

As DEC Staff noted during the joint issues conference, this issue has been raised by the County in another pending power plant siting matter, and has been the subject of a ruling in that matter. See, Ramapo Energy Limited Partnership, DEC Project # 3-3926-00377/00001, Ruling of ALJ/Associate Examiner DuBois (February 22, 2001).

Ruling #2: I adopt as my ruling in this case, the same reasoning set forth in Judge DuBois' February 22, 2001 ruling in Ramapo, supra. The PSL Article X Application filing is analogous to a draft Environmental Impact Statement. The N.Y.S. Siting Board Chairman's determination of compliance, which set in motion the PSL Article X public review of the PSL Article X Application is analogous to the public review of a draft Environmental Impact Statement under SEQRA. To follow this analogy further, the Board's issuance of a PSL Article X Certificate (in the event one should be issued for this project) would be analogous to a final Environmental Impact Statement under SEQRA. Therefore, the DEC determination of completeness was not premature.

The Federal Prevention of Significant Deterioration Permit

The County, joined by the Village, next contends that the federal Prevention of Significant Deterioration (PSD) draft permit notice was defective and must be re-noticed. Further, the County contends that a public hearing on the draft PSD permit is required under the provisions of New York law. The parties were afforded an opportunity to brief this issue, and the County, the Village(5), the Applicant and DEC filed briefs. In its brief, the County asserts that 6 NYCRR Part 621 (Uniform Procedures) and the State Administrative Procedures Act (SAPA) apply to the DEC's processing of a federal PSD permit.

DEC Staff contend that PSD permit applications processed by DEC under the federal program are not subject to the procedural provisions of ECL Article 70 (New York Uniform Procedures Act) or SAPA. Instead, DEC Staff contend that the PSD permitting process is controlled by federal procedural regulations, including 40 CFR §§52 and 124. Under the Clean Air Act, the state is required to implement an EPA-approved State Implementation Plan (SIP). New York does not have an approved PSD program as part of its SIP. Until such time as New York submits an approvable state PSD program for inclusion in the SIP, pursuant to 40 CFR 52.21(b) EPA has delegated the PSD program to DEC. Under this delegation, according to DEC Staff, DEC acts as agent for the USEPA on the PSD permitting process.

The Applicant asserts that the 1999 amendments to PSL §172 clarified that DEC must follow PSL Article X procedures only to the extent that the PSL Article X procedures are consistent with federally delegated or approved environmental permitting authority. The Applicant cites 40 CFR §124.12(a), which provides discretionary authority to conduct a public hearings on PSD permits, but does not require such hearings.

Lastly, the County contends that the recission of CFR §124.71 (effective July 1, 2000), which prohibited public hearings on PSD permit applications, removes any impediment to such public hearings. But, DEC Staff has provided a reasoned explanation of the recission of CFR §§124.71 through 124.91. These regulations provided for public hearings on federal water and waste permits, and provided a prohibition of public hearings for PSD permit applications. DEC Staff contends that with the recission of these regulatory sections, public hearings are not required for any of these federal programs, and the PSD exception from the hearing requirement was no longer necessary.

Ruling #3: The County's contention that a public hearing on the draft PSD permit is required under the provisions of New York law and consequently the federal PSD draft permit notice was defective, was rejected in the Ramapo ruling, supra. I adopt the same reasoning as set forth in the Ramapo ruling as my ruling on the County's defective notice issue in this matter; the County's contention is misplaced and must be rejected. Further, the County's reliance on Matter of Essex County, DEC Project No. 5-1532-00035/00001-0, Interim Decision (March 20, 1996) for the proposition that the SEQRA exemption applies only to the EIS and Findings Statement also is misplaced and must be rejected. Specifically, an evaluation of alternative locations for Bowline Unit 3 is required pursuant to the PSL Article X 'functional equivalent' of SEQRA. Lastly, PSD permit applications, such as the Mirant Bowline Unit 3 PSD permit application, are processed by DEC under the federal program and are not subject to the procedural provisions of ECL Article 70 or SAPA.

ECL Article 70, Uniform Procedures

The County, in its next procedural challenge, asserts that if the DEC procedures do govern the Air and SPDES permit hearing, then pursuant to uniform procedures, ECL Article 70 and 6 NYCRR 621.7, DEC must hold an adjudicatory hearing if public comments raise substantive and significant issues. The County contends that this provision requires adjudication of all issues the County has identified as substantive and significant.

However, the County ignores the provisions of 6 NYCRR Part 624, the DEC Permit Hearing Regulations, which defines these terms and sets forth provisions regarding applicability of the terms as the standard for identifying adjudicable issues in a DEC permit hearing. Rules of statutory and regulatory construction require reading the provisions of 6 NYCRR 621.7 and 6 NYCRR Part 624 together. Therefore, the longstanding agency interpretation of 6 NYCRR 621.7 is that this regulatory provision authorizes the DEC Staff - or the ALJ - to find a substantive and significant issue based upon the public comments, if that issue previously has not been identified by DEC Staff (or proposed by a Petitioner as an adjudicable issue), based upon the public comments on the project. To interpret 6 NYCRR 621.7 as the County proposes, would conflict with the permit hearing procedures of 6 NYCRR Part 624.

Ruling #4: The language relied upon by the County does not stand for the proposition that a commentor is entitled to adjudicate an issue based solely upon the commentor's contention that an issue is substantive and significant. Such an interpretation would render the "gatekeeping" function of the substantive and significant standard, as set forth in 6 NYCRR Part 624, meaningless. The County's argument is without merit and must be rejected.

Volatile Organic Compounds (VOC's) and Offsets Issues

The County and the Village each propose an issue regarding emissions offsets or emission reduction credits(6) (ERC's) required for oxides of nitrogen (NOx) and VOC's, contending that the 6 NYCRR Part 231 emissions offsets hearing must be conducted within the PSL Article X hearing process.

The Applicant has not yet obtained all necessary ERC's for the project. However, the Applicant stated during the joint issues conference that all VOC credits have been obtained and approximately 30% of the NOx credits have been obtained.

DEC Staff contends that this is not an adjudicable issue; that once the Applicant identifies the sources of the ERC's, a public notice will be published pursuant to 6 NYCRR Part 231-2.10. Further, DEC Staff states that the draft PSD and Part 201 Air permits will not be final until after the ERC public notice requirements have been met. Furthermore, DEC Staff asserts that the ERC public notice must occur within the time frame of the related PSL Article X proceeding and that the PSL Article X proceeding must be stayed, if necessary, to accommodate the Part 231-2.10 public notice process. The Applicant disagrees with this last contention.

Ruling #5: The Applicant is required to obtain the necessary ERC's as a precondition to issuance of final permits. Pursuant to 6 NYCRR 231-2.10(c)(1), prior to issuance of a DEC air permit for any emission source which is part of a proposed major facility subject to the requirements of Part 231, a supplemental DEC public notice is required - i.e., a notice supplemental to the initial DEC Part 624 public hearing notice for the project.

I reject the DEC Staff's contention that 6 NYCRR 231-2.10 provides for a separate DEC hearing process on ERC's. The regulatory language specifies a 'supplemental public notice', not a new DEC hearing process separate from the Part 624 permit hearing process. Further, 6 NYCRR 231-2.10(c)(2) specifies that any petitions for party status filed pursuant to the supplemental public notice will not be considered late filed petitions under Part 624. Therefore, 6 NYCRR 231-2.10 requires that the permit hearing for the major facility air permit may be a bifurcated proceeding (assuming the ERC's have not been obtained and submitted with the initial permit application) to include any comment and proposed issues relating to the Applicant's submittal of proposed ERC's and DEC Staff's review thereof. Consequently, the ERC component of the DEC public hearing process must occur within the time frame of the related PSL Article X proceeding.

As applied to the present case, the joint record of the PSL Article X and DEC joint issues conference must be held open to include any proposed issues relating to DEC Staff's review of the ERC's within the DEC Part 624 permit hearing, essentially a bifurcated joint issues conference, and potentially, any necessary further proceedings.

Lastly, although the Village contends that the ERC's should be obtained as close to the Village as possible so that the ERC's will provide greater benefit to the local community, the Village cited no statutory or regulatory standard that requires such a process.

Rulings on Requests for Party Status and Proposed Adjudicable Issues

Pursuant to 6 NYCRR 624.5, the parties to any adjudicatory hearing are the Applicant, the DEC Staff and those who have been granted full party status. As explained above, filings from four groups were received, all seeking full party status.

The criteria for determining whether the ALJ should grant petitions for full party status are provided in 6 NYCRR 624.5(d)(1). The Applicant and DEC Staff did not object to the environmental interest of any Petitioner(7). However, the Applicant objected to the filing of the Village, contending that the filing was late and was not sufficient.

Ruling #6: The Village is an active party in the related PSL Article X proceeding and appeared at the joint issues conference with their proposed air expert prepared to make an offer of proof on proposed adjudicable air issues in aid of their request for DEC party status. The Village's filing was received by this Office on February 20, 2001 and was not a late filing. One purpose of the DEC (and PSL Article X) permit hearing process is to encourage public participation and review issues proposed by such persons. No delay was occasioned by the Village's request for party status, and the Applicant was prepared to address the Village's proposed issues during the joint issues conference. Under these circumstances, the Applicant's motion to summarily preclude further review of Village's request for party status is denied. The Village's request for party status and proposed issues for adjudication are discussed further below.

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.(8) 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.(9) See, generally, Athens Interim Decision, supra at 3, "Standards for Adjudication".

During the joint issues conference, Mirant and the DEC Staff argued that Matter of Jay Giardina, Interim Decision (September 21, 1990) and Matter of Akzo Nobel Salt, Inc., et al., Interim Decision (January 31, 1996) further refine the standards for determining DEC issues for adjudication. The Applicant and DEC Staff assert that offers of expert testimony contrary to the Application are not adequate to raise issues for adjudication, if the bases for the contrary expert opinions are not identified or have not considered all proposed mitigation. Further, Mirant and the DEC Staff contend that while the purpose of the DEC adjudicatory hearing is to resolve disputed facts with evidence, debates among experts about the quantity and quality of information appropriate to make judgments should be avoided when sufficient information already is available to design a proposal and to develop permit conditions that both protect the environment and provide opportunities for any necessary corrective action. The applicability of these administrative decisions to particular proposed issues is discussed below.

II. Discussion of Proposed Adjudicable Issues

Proposed SPDES Issues

The DEC Commissioner has previously addressed the 'best technology available' (BTA) standard in the Athens Interim Decision, (Athens Interim Decision, supra, pp. 7 - 16).

33 U.S.C. §1326(b) of the Federal Clean Water Act ("CWA") establishes a mandatory technology requirement for cooling water intake structures, that the location, design, construction, and capacity of cooling water intake structures must reflect the best technology available for minimizing adverse environmental impact. 33 U.S.C. §1326(b), CWA §316(b).

In New York, 6 NYCRR §704.5 implements §316(b) as a water quality standard, requiring that the location, design, construction and capacity of cooling water intake structures must reflect the best technology available for minimizing adverse environmental impacts. The determination of BTA is site specific.

With respect to the BTA standard, the Commissioner has concluded that cooling water intake structures must meet "best technology available for minimizing adverse environmental impact" with respect to their location, design, construction, and capacity. But, "best available" does not mean perfect. Athens Interim Decision at 8.

Since DEC Staff has no objection to the project and has prepared a draft SPDES permit, the burden of persuasion is on the Petitioners to demonstrate that a substantive and significant issue exists. In their petition for DEC party status, Riverkeeper and Scenic Hudson proposed five SPDES issues for adjudication. The County also raised several SPDES issues. The discussion below begins with the Riverkeeper and Scenic Hudson proposed issues.

The first three issues proposed by Riverkeeper and Scenic Hudson are interrelated. Although discussed separately, they are addressed together in the ruling below. As its first issue, Riverkeeper and Scenic Hudson contend that the Applicant's SPDES Application must be denied because it does not require BTA. Specifically, they contend that the adverse impacts of cooling water structures are directly proportional to the volume of water used. Therefore, the Petitioners contend that applying the BTA standard to Bowline 3 requires dry cooling technology (dry cooling). Riverkeeper and Scenic Hudson conclude that absent dry cooling, the Application and draft SPDES permit fail to require BTA, in violation of 33 USC §1326(b) and 6 NYCRR §704.5.

The Applicant contends that the Petitioners erroneously assert that wet cooling never can be BTA, because nothing in the CWA prohibits wet cooling. This is not an issue, as the BTA determination is site specific, and further, the Commissioner has rejected the view that wet cooling never can be BTA. Athens Interim Decision, at 11.

Riverkeeper and Scenic Hudson contend that adverse environmental impacts of water cooling intake structures are directly proportional to the volume of water used. This argument addresses only the 'capacity' element of the BTA standard. Furthermore, the DEC Staff contends that with the Gunderboom, the proposed Bowline 3 intake structure at this location will have no greater adverse environmental impact than a dry cooling intake. Therefore, the DEC Staff contends that the Application and draft SPDES permit meet the BTA standard. But, the Draft SPDES Permit Fact Sheet states that dry cooling would use only 3% of the water used for a wet cooling system (initially proposed by the Applicant; comparison to a hybrid cooling system would result in a similar slightly larger percentage).

Riverkeeper and Scenic Hudson have presented an offer of proof identifying two proposed expert witnesses. Dr. William W. Dougherty, P.E., Senior Scientist of the Energy Group, Tellus Institute would provide testimony that dry cooling uses significantly less Hudson River water than the proposed technology, thereby reducing the levels of impingement and entrainment of Hudson River fish. Riverkeeper and Scenic Hudson state that Dr. Dougherty will dispute DEC Staff's assessment of dry cooling technology and will show that the adverse environmental impacts of dry cooling would be much less than DEC Staff has represented and much less than the adverse environmental impacts of the proposed hybrid cooling/Gunderboom intake structure. This proposed testimony will challenge Mirant's population modeling, which has been an issue of controversy in the separately pending SPDES relicensing Hudson River Settlement Agreement (HRSA) negotiations pertaining to other power generation facilities on the Hudson River, including the population modeling for Bowline Units 1 and 2.

Ralph E. Huddleston, Jr., Senior Vice President, Carpenter Environmental Associates, Inc., an environmental scientist specializing in aquatic systems and environmental impacts, would testify that capacity is the most critical element of an intake structure in relation to entrainment, and that impingement and entrainment rates vary directly with the volume of water used. He is familiar with the Lovett Gunderboom project and will compare and contrast that Gunderboom with the proposed Bowline 3 Gunderboom.

The N.Y.S. Department of State (DOS) has designated Haverstraw Bay as a Significant Coastal Fish and Wildlife Habitat. Riverkeeper and Scenic Hudson assert an important issue in that the proposed water intake will be located in this sensitive, valuable ecological resource.

While the BTA determination is site specific, prior cases may provide relevant precedent. The Athens case, decided less than a year ago, is relevant to the evaluation of proposed SPDES issues in this matter. The Athens project is not located in a DOS Significant Fish and Wildlife Habitat. Yet, the Commissioner rejected a hybrid cooling/Gunderboom technology as BTA for Athens. The Applicant has not sufficiently distinguished the Bowline 3 project from the Athens project.

The DEC Staff, citing Akzo, supra, and Giardina, supra, contends that this is an academic debate not sufficient to trigger an adjudication. However, in this instance the Petitioners have provided a sufficient offer of proof asserting a factual disputes that would cause a reasonable person to inquire further. Riverkeeper and Scenic Hudson, supported by the proposed testimony of their expert witnesses, contend that impacts on the fishery and fishery system will differ with dry cooling versus the proposed hybrid/Gunderboom system. Further, they contend that dry cooling more effectively will minimize adverse impacts. This is further supported by the permit conditions cited by Riverkeeper and Scenic Hudson in support of their third point, that the Gunderboom technology is experimental and unproven, discussed below. Riverkeeper and Scenic Hudson have identified important issues that, if successful, would result in major modification of the draft permit.

The second related issue proposed by Riverkeeper and Scenic Hudson is that DEC Staff improperly applied a cost/benefit analysis in comparing the costs of the proposed system with costs of a dry cooling system, in violation of 33 USC §1326(b) and 6 NYCRR §704.5.

The Commissioner has affirmed the principle that costs are an acceptable consideration in determining whether the intake design reflects BTA. Athens Interim Decision, supra, at 13. However, in interpreting the caselaw on the costs factor, the Commissioner has stated that a simple cost/benefit analysis is not appropriate. Instead, "...a finding must be made that the costs are 'wholly disproportionate' to the environmental benefits to be gained. This more rigorous standard gives presumptive weight to the value of environmental benefits and places the burden on a permit applicant to demonstrate that the relative costs are unreasonable."

Athens Interim Decision, supra, at 15.

As summarized above, the Riverkeeper and Scenic Hudson offer the testimony of Dr. Dougherty to show that the costs of dry cooling are not wholly disproportionate to the environmental benefits to be gained by requiring such a system for the Bowline 3 project.

DEC Staff contends, as set forth in the draft SPDES permit, (Fact Sheet, page 7), that, "[b]ased upon minimizing water usage only, it could be concluded that minimal water use associated with dry cooling would provide the greatest protection to the aquatic biota. However, the use of a Gunderboom curtain enclosing the intake structure, coupled with the proposed 2mm wedge-wire screening and wet cooling technology [now, hybrid cooling technology], provides essentially equivalent aquatic protection of dry cooling at significantly less cost and reduction of other potential impacts..."

Other impacts identified include additional construction costs of between $17 and $20 million, additional operation, maintenance and fuel costs, additional land requirements for air-cooled condensers and related visual impacts, wetland and stream impacts, reduction in the amount of County park land that may become available if dry cooling is not required.

The third related issue proposed by Riverkeeper and Scenic Hudson is that the Applicant's Gunderboom technology is experimental and unproven. Therefore, they contend, the Gunderboom is not BTA, in violation of 33 USC §1326(b) and 6 NYCRR §704.5.

The Athens Interim Decision, supra, provides some precedential value as to whether hybrid cooling/Gunderboom technology is BTA. In Athens, the Commissioner stated that although the Gunderboom technology is relatively new, that alone does not render it unacceptable to meet the BTA standard. Nonetheless, the Commissioner concluded that the site specific application of Gunderboom technology for the Athens project site was premature. Athens Interim Decision, supra, at 10.

The Petitioners contend that the fate of aquatic organisms that are impinged on the Gunderboom has not been established; i.e., what is the fate of ichtyoplankton impinged on the Gunderboom, and how does this compare to entrainment of ichtyoplankton. They question the fate of impinged ichtyoplankton or other flora and fauna that are loosened from the Gunderboom during air cleaning procedures. The Petitioners contend that if the intake for Units 1 and 2 is operating, the ichtyoplankton will be entrained in the Units 1 and 2 water intake.

In addition, Riverkeeper and Scenic Hudson contend that due to weak currents in the Bay, the Gunderboom is subject to physical failure. If the intake for Units 1 and 2 is not operating, Riverkeeper and Scenic Hudson contend that due to weak currents in the Bay, ichtyoplankton and sediments cleaned from the Gunderboom will remain suspended nearby and again will clog the Gunderboom when the Unit 3 intake resumes operation. Riverkeeper and Scenic Hudson offer the testimony of Dr. Bruce Bell, Ph.D., P.E., DEE, President of Carpenter Environmental Associates, Inc., on this issue.

Lastly, Riverkeeper and Scenic Hudson point to draft SPDES permit conditions that allow the Gunderboom to operate the facility for up to fifteen days at a time in the event of a failure or to fail to operate up to 25% of the time in a 24 hour period, before a violation is deemed to have occurred under the terms of the draft permit(10). They assert that these permit conditions prove the experimental unproven state of the Gunderboom technology and show that the Gunderboom/hybrid cooling technology will not be as reliable as dry cooling. Consequently, the Riverkeeper and Scenic Hudson conclude, the Gunderboom/hybrid cooling technology is experimental and unproven, and does not represent BTA for Bowline Unit 3.

The Petitioners have raised important factual issues concerning the expected performance of the Gunderboom at this site. Specifically, the Petitioners made an offer of proof supported by proposed expert testimony, that due to low flow or currents in Haverstraw Bay, when cleaned using air pressure, sediments dislodged from the Gunderboom will not wash away but will remain near the Gunderboom and will be pulled back into the Gunderboom when the intake becomes operational following the cleaning. Neither the Applicant nor DEC Staff have distinguished this project from the Athens project with respect to the Gunderboom technology.

Riverkeeper and Scenic Hudson also raised an issue regarding fish mortality, contending that the Bowline Unit 3 should be evaluated in conjunction with other nearby plants. But, DEC Staff clarified that the fish mortality data submitted by Mirant are Hudson River data collected over a period of several years. Consequently, DEC Staff asserts, the data include impacts from existing facilities on the river.

Ruling #7: Riverkeeper and Scenic Hudson have identified substantive and significant issues as to whether the proposed hybrid cooling/Gunderboom system is BTA, and whether dry cooling is necessarily BTA for this site.

Neither the Applicant nor the DEC Staff have sufficiently distinguished this case from the circumstances evaluated by the Commissioner in the Athens Interim Decision. That is, neither the Applicant nor DEC Staff have articulated how the Gunderboom technology has advanced since the Athens Interim Decision in June 2000. It appears from their presentation at the joint issues conference that this technology has not substantially advanced since then.

Moreover, they have not sufficiently distinguished the factor that this project will cause greater adverse environmental impact because the project proposal locates the water intake in a sensitive ecological resource, the Haverstraw Bay, a DOS Significant Fish and Wildlife Habitat.

Regarding the cost factor in determining BTA, the Petitioners have raised a substantive and significant issue whether the costs of dry cooling technology are wholly disproportionate to the environmental benefits to be gained from using such technology at this site.

In view of the above rulings, I conclude that Akzo, supra, and Giardina, supra, are not applicable in the instant case to preclude an adjudication of these issues. In sum, the issues of whether the hybrid cooling/Gunderboom system is BTA, and whether dry cooling is required to meet the BTA standard, as set forth in Riverkeeper's and Scenic Hudson's first three proposed issues, are substantive and significant issues requiring adjudication.

Riverkeeper and Scenic Hudson assert in their fourth issue that BTA requires the reuse of intake water from Bowline Units 1 and 2 whenever available. Under this proposal, discharge water from Units 1 and 2 would be diverted to the water intake structure of Bowline Unit 3, and any additional cooling water required for Bowline Unit 3 would come from the Hudson River.

As mentioned above, Bowline Units 1 and 2 are part of the ongoing HRSA negotiations. DEC Staff asserts that the Bowline Units 1 and 2 water intake structures are not BTA for certain times of the year. Riverkeeper and Scenic Hudson do not disagree with this contention, but argue nonetheless for reuse of discharge water from Units 1 and 2 as the method of providing cooling water for Bowline Unit 3 that conserves natural resources to the greatest extent and is most environmentally protective.

The Applicant initially proposed reuse of Bowline Units 1 and 2 water whenever possible, but changed its proposal in response to DEC Staff comments. DEC Staff contends that this proposed issue raises a legal issue as to what constitutes a 'water intake structure' under the CWA. DEC Staff (and Department of Public Service Staff) contends that under the CWA definition of water intake structure, Bowline Units 1 and 2 would become the 'intake structure' for Unit 3, if the Bowline Units 1 and 2 effluent water is reused for Unit 3. The Applicant now supports DEC Staff's position on this issue.

Ruling #8: This is an issue of fact and law requiring adjudication. Reuse of discharge water from Units 1 and 2 to cool Unit 3 has the potential to greatly minimize incremental adverse environmental impacts to the Hudson River, and further would result in major modification of the draft SPDES permit. The draft SPDES permit does require reuse of discharge water from Units 1 and 2 as cooling water for Unit 3, during certain times of year (see, draft SPDES permit, page 12 of 15, ¶8), in contradiction to DEC Staff's contention during the issues conference, that reuse is prohibited due to the definition of 'water intake structure' under CWA. The parties should have an opportunity to develop any necessary factual record on this issue during the adjudicatory hearing.

Finally, the Riverkeeper and Scenic Hudson contend that discharge of pollutants from the Bowline 3 cooling water return discharge will cause lethal conditions to the receiving water biota, which waters are a DOS Significant Habitat, as noted supra. The Riverkeeper and Scenic Hudson have identified Biologist Peter Henderson, Ph.D., as their proposed expert on this issue. The County of Rockland also raises this issue in its petition, contending that the Application and draft SPDES permit contain omissions in that they fail to provide required information as to what constituents will be discharged and fail to analyze whether various heavy metals and phosphates will be discharged.

The three Petitioners contend that pollutants including biocides, phosphates, scale inhibitors and corrosion inhibitors will not be regulated in the cooling system effluent. These pollutants, the Petitioners contend, will cause algal blooms and related adverse environmental impacts in the sensitive Significant Habitat.

The County identified bromine and bromine compounds as an example of this type of omission. But, no water quality standard exists for bromine. DEC Staff explained that the draft SPDES permit includes a parameter for total residual chlorine, since a water quality standard does exist for chlorine. DEC Staff's further explanation, uncontroverted by the Petitioners, was that chlorine and bromine act similarly, so that the chlorine parameter also regulates bromine.

The County asserts a similar omission with respect to metals in the Unit 3 effluent. The draft SPDES permit does not contain metals limits. But, the Applicant stated that metals including iron, zinc, copper, mercury, lead and arsenic are addressed in the revised SPDES Application (dated 6/13/2000).

As noted above, the Applicant used the USEPA sponsored Cornell Mixing Zone Expert System modeling package Version 4.03b (CORMIX) to evaluate the performance characteristics of alternative discharge configurations for Bowline Unit 3 cooling tower blowdown. DEC Staff confirmed that the Applicant's water use does not add metals in the process. Instead, the cooling system returns to the river what water was withdrawn (less evaporation). While it is true that evaporation results in a greater concentration of metals in the cooling system effluent, no metals are added in this process. DEC Staff concludes, based upon the CORMIX data, that metal concentrations in Unit 3 effluent will return to background levels in mixing with the receiving Hudson River waters.

Next, the three Petitioners contend that because the Unit 3 effluent will be heated hyper salinated water, the effluent plume will sink to the bottom of the river and no dispersion or only limited dispersion will occur. The Petitioners conclude that this sinking heated hyper salinated water plume will result in a concentration of toxic chemicals along the river bottom causing significant adverse impacts to benthic organisms.

DEC Staff assert that although the Applicant has revised the proposed cooling system from Mechanical Draft Cooling to a Hybrid cooling system, the volume of water used will be almost the same. (As noted above, the primary purpose for the change to the Hybrid system was reduction of cooling tower plume, thereby minimizing anticipated adverse visual impacts of the project.) In addition, DEC Staff used the CORMIX computer model to predict dispersion of Unit 3 effluent in the receiving Hudson River waters. Staff ran the model using a 'worst case' slack tide, sinking water plume, 20:1 dilution scenario. The receiving Hudson River waters, DEC Staff noted, are brackish in character. This is comparable, in Staff's opinion, to the AKZO case, supra, where a 20:1 dilution was well tolerated in the receiving fresh waters of the Genesee River.

In conclusion, DEC Staff asserts that estimated fish mortality rates for the hybrid cooling/Gunderboom as compared to estimated rates for a dry cooling system at this site were virtually indistinguishable. Lastly, DEC Staff notes that industrial development in a Significant Fish and Wildlife Habitat is not prohibited by DOS Coastal Policies.

In sum, DEC Staff contends that CORMIX modeling shows that Hudson River water standards will be maintained.

Ruling #9: Riverkeeper, Scenic Hudson and the County of Rockland have failed to raise an adjudicable issue regarding discharge of pollutants from the Bowline 3 cooling water return. DEC Staff have explained that anticipated discharges will comply with water standards, and that pollutants not regulated by a quantitative standard will be regulated through qualitative standards or through DEC Staff review during the SPDES permit term, consistent with DEC guidance document TOGS 1.2.1. The Petitioners have not raised any substantive issue regarding the CORMIX model, as applied in this case(11).

Proposed Air Pollution Control Issues

Issues regarding the draft Air Pollution Control permit were proposed by the County and the Village. The issues are discussed by topic, first meteorology and particulates issues, NOx LAER then carbon monoxide issues and remaining air issues.

Meteorology and Particulates

The Village contends that ambient air quality data that the Applicant relied upon is not representative of conditions at the Bowline Unit 3 site, and should be disregarded or replaced. The Village is concerned with impacts of Unit 3, especially particulate matter impacts, within the Village boundary. Specifically, the Village questions the use of meteorological data collected at Suffern, New York, especially as it relates to particulates. However, the Village does not contend that any National Ambient Air Quality Standards (NAAQS) will be violated.

The background data used by the Applicant was approved by the USEPA, as confirmed by letter dated March 21, 2000 (from EPA/Riva to Letizia). Nonetheless, the Village asserts that DEC should not be bound by the USEPA's approval, and instead should require the Applicant to develop new localized ambient air quality data, under the general provisions of 6 NYCRR Part 211, that authorize the DEC to prevent air pollution.

Ruling #10: The Village's proposed issue must be rejected. The Suffern meteorological data has been approved by USEPA and has been accepted by the DEC Staff. While it may true as a general matter that localized data arguably would be best, the USEPA has determined that the Suffern data is sufficient for assessing ambient air quality, including particulate matter, at the Bowline Unit 3 site and its environs.

The Village also contends that composite and meteorological data used by the Applicant should be disregarded and replaced, because it does not accurately represent existing local conditions or provide a conservative assessment of local impacts. One year of sequential hourly meteorological data collected at the Bowline Generating Station was used. Other data evaluated by the Applicant, from West Point, New York and Albany, New York was not used. Further, the USEPA and DEC Staff have approved the Bowline Generating Station data as acceptable on-site data, representative of the dispersive conditions(12).

Upper air data from Atlantic City, New Jersey also was used by the Applicant. DEC Staff explained that this data provides a conservative dispersion model because Atlantic City is located closer to the ocean than the Bowline Generating Station, and therefore has a lower mixing height, resulting in a higher modeled impact.

It is uncontroverted that the air modeling was conducted pursuant to a protocol approved by USEPA. In evaluating the modeling data, DEC Staff has concluded that the proposed meteorological data accurately represents the conditions that would occur at the site. The conservative modeling shows, in DEC Staff's opinion, that Bowline Unit 3 will have maximum impacts below the USEPA Significant Impact Level (SIL).

The Applicant's air dispersion modeling predicted for Particulate Matter 10 microns (PM10) with natural gas firing, was 4.98 micrograms per cubic meter (g/m3). The USEPA requires extensive cumulative source modeling if the predicted PM10 level is 5.0 g/m3. The Village contends that the Applicant's PM10 modeling result of 4.98 g/m3 predicts concentrations so close to the USEPA threshold for cumulative source modeling, that such modeling should be required for the Bowline Unit 3 project.

The County has proposed a similar issue, contending that the Applicant's dispersion modeling seriously underestimates potential ambient air impacts of Bowline Unit 3. The County contends that the Applicant's change in cooling technology to an as yet unspecified hybrid cooling system, indicated by letter dated February 13, 2001 (Couch White to Deixler), makes it impossible to determine whether the modeled 4.98 g/m3 level will now exceed 5.0 g/m3.

However, DEC Staff explained that the 4.98 g/m3 level was the result of conservative modeling, predicting particulate matter concentrations in the mountains that surround the outlying vicinity of the project area, not predicted levels within the Village. With respect to the change in cooling technology, DEC Staff asserts that the maximum drift rate set forth in the draft Air permit was based upon the Applicant's wet cooling proposal (Draft Air Permit Condition 21.2). With the change to hybrid cooling technology and the consequent reduced cooling tower plume, DEC Staff contends that if the Applicant complies with the drift rate limit, impacts and emissions will be less than or equal to, but not more than, the initial wet cooling proposal.

The Applicant contends that since the model was conducted in accordance with approved protocols and did not exceed the USEPA SIL, no substantive issue has been raised. DEC Staff contends that due to the conservative modeling parameters, no cumulative source modeling is required unless a modeled result exceeds 5.0 g/m3. Therefore, DEC Staff concludes that no cumulative source modeling is appropriate or required in this instance. DEC Staff adds that exceedance of the SIL would not necessarily indicate a violation of any health standards, since the SIL is only approximately 3% of the PM10 standard.

In addition, the Village questioned whether an oil-firing scenario wouldn't increase PM10 concentrations, resulting in an exceedance of the SIL. But, DEC Staff explained that the oil-firing scenario is very restrictive, so that PM10 emissions will be reduced as compared to the gas firing scenario(13). DEC Staff concluded that the worst-case estimate of operations for the oil-firing scenario was conducted properly. Also, the Applicant noted that the Environmental Justice Analysis(14), sets forth the results of cumulative impact assessment of Bowline Units 1, 2 and 3, for PM10 and other emissions.

Next, the County contends that an omission exists in the Application because the Applicant has not provided hybrid cooling tower design and configuration or air emissions modeling data.

The County asserts that pursuant to 6 NYCRR 201-6.3(d)(3)(i), the air permit Application must describe all emissions of regulated air pollutants emitted from any emissions unit (except when such emissions are trivial). 6 NYCRR Subpart 201-3 (6 NYCRR 201-3.3, Trivial Activities).

In response, the Applicant asserts that the approved modeling protocol does not require analysis of PM10 from the cooling tower. Further, the Applicant has represented that it will require all potential bids on the hybrid cooling tower design and construction to meet the PSL Article X Certificate and DEC draft SPDES permit and draft Air permit conditions. But, the County's concern is broader than PM10 alone. As noted above, DEC Staff contends that the Applicant must meet the drift rate limit in the draft Air permit. If the Applicant complies with that limitation, Staff contends, then emitted pollutants for the hybrid cooling system will be less than that predicted for the initial proposal of mechanical draft (wet) cooling.

Ruling #11: The results of the conservative air modeling conducted by the Applicant predicted PM10 concentrations below the SIL threshold of greater than 5.0 g/m3. Therefore, the Village's contention that cumulative source modeling is required must be rejected.

Further, I reject the DEC Staff's contention that the drift rate limit in the draft Air permit is sufficient to assure compliance with air pollution control standards.

The County and the Village have identified a substantive and significant omission and defect, in that the Applicant has omitted to describe 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 cooling system is an essential element of the project and Petitioners are entitled to an opportunity to review and comment upon the hybrid cooling system, and further, are entitled to an opportunity to propose issues for adjudication related to this component of the project.

In other circumstances, I would recommend that the joint issues conference record be reopened and held in abeyance with respect to the DEC Air permit application. Procedurally, this would allow the Applicant to provide missing information on the proposed hybrid cooling system and allow an opportunity for the County, Village and DEC Staff to comment on the Applicant's filings in this regard. Following that process, I would rule whether any adjudicable issues were raised regarding the Bowline Unit 3 hybrid cooling technology.

However, in this instance, since this issues ruling has identified adjudicable issues regarding cooling technology (i.e., the SPDES issues identified by Riverkeeper and Scenic Hudson), the County's and the Village's identification of this substantive and significant omission and defect in the Application materials can be addressed during the course of these proceedings. The Applicant is directed to propose a schedule within one week of issuance of this ruling for providing the missing information so that the Petitioners will have an opportunity to review and comment upon the hybrid cooling system and have an opportunity to propose issues for adjudication related to this component of the project.

In the alternative, should the SPDES ruling on cooling technologies be reversed on appeal, then the DEC Air permit hearing should be held in abeyance until the Applicant provides the missing information identified by the County and the Village.

Next, the Village contends that real-time ambient air monitoring of fine particulates should be required as a pre-condition to agency review of the Air permit Application. The Village seeks an analysis of fine particulate matter, referred to during the joint issues conference as Particulate Matter 2.5 (PM2.5).

DEC Staff contends that the Applicant's air modeling shows that the Bowline Units 1, 2 and proposed Unit 3, will meet the current PM10 air quality standard. DEC Staff asserts that there is no statutory or regulatory basis to require ambient air monitoring of particulate matter, including PM2.5. Further, DEC Staff states that for PM2.5, local modeling would not reflect the relative contribution of the Bowline Units, because PM2.5 emissions have a large plume that extends over long range transport. The size of the PM2.5 plume is increased due to the secondary formation of fine particulates in ambient air.

DEC Staff contends that 6 NYCRR Part 211 requires the DEC to evaluate health impacts of air pollution, but only pursuant to existing enforceable regulations. DEC Staff asserts that PM10 is the current enforceable standard for particulate matter, and will remain so until implementation of the PM2.5 standard is possible through the stepwise process.

On July 18, 1997, the USEPA issued regulations establishing a PM2.5 (fine particulates) standard. 40 CFR Part 50, Federal Register Volume 62. DEC Staff has established several PM2.5 monitoring stations in the state and has collected approximately one year of data. Meanwhile, the USEPA regulatory promulgation has been challenged in the federal courts by the American Trucking Associations, Inc. In May 1999, the District of Columbia Circuit for the United States Court of Appeals held that the construction of the provisions of the Clean Air Act on which USEPA relied in promulgating the National Ambient Air Quality Standards (NAAQS) for particulate matter and ozone constituted an unconstitutional delegation of legislative power. American Trucking Assoc. V. EPA, 175 F.3d 1027 (D.C. Cir. 1999) cert. granted, 2000 WL 175256 (May 22, 2000). In its decision, the court also invalidated the new fine particulate (PM2.5) regulations and remanded the proposed regulations to the agency for further consideration. On February 27, 2001, the U.S. Supreme Court issued a decision upholding the EPA's regulatory promulgation (focusing on the ozone standards), and remanding the case for further proceedings. Whitman v. American Trucking Associations, Inc., et al., __ U.S.__, (Docket No. 99-1257, decided February 27, 2001).

But, DEC Staff contend that notwithstanding the viability of the federal PM2.5 standard, the standard cannot be applied during this permit review. DEC Staff described the 'stepwise' approach of regulatory implementation outlined in the USEPA PM2.5 regulation and guidance, whereby the existing PM10 standard would continue to apply for an interim period. During this interim period, PM2.5 data would be collected and evaluated, and PM2.5 implementation policies and guidance would be developed by the USEPA and by state agencies.

Moreover, the DEC Staff cite the DEC Commissioner's Interim Decision in the matter of American Marine Rail, LLC, DEC Project No. 2-6007-00251/00001 (February 14, 2001). In American Marine Rail, the Commissioner held that the PM2.5 standard could not be applied because implementation of the PM2.5 standard is challenged by a lack of acceptable data, disputes about the adequacy of the database and time needed to accurately analyze the database. These circumstances will continue until the regulatory agencies have completed the stepwise implementation process.

In sum, DEC Staff asserts that until the agency completes three years of PM2.5 data collection and goes through the other steps described above, the DEC cannot begin implementation of a PM2.5 standard.

Ruling #12: None of the issues conference participants, including the Applicant and DEC Staff, dispute that fine particulates are a public health risk. However, no adjudicable issue has been identified, for two reasons. First, DEC Staff's explanation that fine particulate impacts are primarily a long range transport issue was uncontroverted. There-fore, PM2.5 impacts of Bowline Unit 3 are not a substantive issue with respect to the County of Rockland or Village of Haverstraw. Moreover, the DEC Staff explanation of the stepwise regulatory implementation process, citing the American Marine Rail, Interim Decision, supra, requires a conclusion that, notwithstanding the long range transport issue, it is premature to regulate PM2.5 at this time due to insufficient data and the lack of regulatory implementation policies and guidance.

In sum, the issues proposed by the County of Rockland and the Village of Haverstraw seeking to adjudicate PM2.5 impacts and seeking a requirement of ambient air modeling of fine particulates must be rejected.

The County contends in its next issue that the majority of fine particulates are comprised of ammonium sulfate or ammonium nitrate. Further, that the Applicant proposes to install a selective catalytic reduction unit in Bowline Unit 3, and that such catalytic units emit substantial amounts of ammonium sulfate. The County asserts that emission control technology exists that can achieve a 2.0 ppm limit, whereas the draft Air permit contains a limit of 5.0 ppm.

The County's contentions regarding ammonium sulfate and ammonium nitrate were uncontroverted in the joint issues conference record.

Ruling #13: The County has raised an adjudicable issue concerning emission control technology that can achieve an ammonium sulfate emission of 2.0 ppm from the selective catalytic reduction unit.

NOx LAER Issues

The County asserts that the Application does not comply with the NOx LAER requirements of 6 NYCRR Part 231, and 6 NYCRR 200.1(ak) because the Applicant has stated in the Application materials that LAER is an emission limitation that has been achieved in practice. But, pursuant to 6 NYCRR 200.1(ak), the definition of LAER also includes an emission limitation that can reasonably be expected to occur in practice.

The County contends that permitting determinations in other states demonstrate that SCONOx technology can achieve limits below the 2.0 parts per day permit level, as low as 1.5 parts per day. SCONOx is a catalytic control technology developed by Goal Line Environmental Technologies, L.L.C., for the reduction of NOx emissions and elimination of ammonia slip from natural gas-fired combined-cycle turbine combustors.

But, the Applicant retorts that the County has not included an offer of proof that SCONOx technology could achieve an emission limitation lower than 2.0 parts per day that can reasonably be expected to occur in practice with the large turbines proposed for Bowline Unit 3. In concurring with the Applicant, DEC Staff explained that SCONOx technology has been used only with smaller turbines producing less than 25 MW generating capacity. The DEC Staff reviewed other facilities with turbines sized similarly to the Bowline Unit 3 turbines, both outside New York and within the state. DEC Staff found no other facilities that have a permit limit below 2ppm NOx or that have used SCONOx technology with the large turbines.

Also, DEC Staff confirmed that the Applicant was directed to consider the most stringent emission limitations achieved in practice or which could reasonably be expected to occur in practice. DEC Staff believes the Applicant has complied with that directive.

Ruling #14: The SCONOx technology is not an alternative technology that could provide an emission limitation reasonably expected to occur in practice for turbines larger than 25MW. Therefore, the applicability of SCONOx technology to the Bowline Unit 3 project requires no further review or adjudication.

Carbon Monoxide (CO) Issues

The Village contends that the Applicant's addition of a carbon monoxide (CO)catalyst to control CO and volatile organic compounds (VOC's) will increase PM10 emissions. In addition, the Village asserts that this will increase the PM10 modeling result above 5.0 g/m3, thereby requiring cumulative source modeling. But, the Applicant clarified during the joint issues conference that the PM10 modeling assumptions include the use of a CO catalyst(15).

Ruling #15: The Village has not identified an adjudicable issue, since the PM10 modeling included the use of a CO catalyst.

Next, the Village contends that the CO catalyst was required for Best Available Control Technology (BACT) for CO control, but no analysis was provided that weighed the costs of increased particulate matter emissions from the catalyst, versus the benefits of reducing CO emissions.

Ruling #16: The Village failed to identify any statutory or regulatory standard that would require DEC Staff to analyze the costs of increased particulate matter emissions from the catalyst versus the benefits of reducing CO emissions. Therefore, the Village has not raised an adjudicable issue.

The County contends that the PM10 BACT determination in the draft Air permit does not constitute BACT, and other states have achieved BACT emissions limits from 40% to 60% lower than the draft permit limit.

The County's contentions regarding the PM10 BACT determination and BACT emissions limits in other states were uncontroverted in the joint issues conference record.

Also, the County contends there is an inconsistency between the draft Air permit and the draft PSD permit, for CO firing #2 oil; that the permits are contradictory and technically unsupportable. But, the Applicant and DEC Staff stated that they were aware of this inconsistency, which is attributable to ministerial error in coordinating the production of the two draft permits. The Applicant's letter commenting on the draft Air permit addressed this issue. (Couch-White to DEC/R. Ewing, 12/14/2000). DEC Staff stated that the draft Air permit contains the correct emission rates and the draft PSD permit will be revised for consistency with those emission rates.

Ruling #17: The County has raised an adjudicable issue concerning the PM10 BACT limitation in the draft Air permit, and whether other states have achieved BACT emissions limits lower than the draft permit limit for similar projects. The inconsistency identified by the County does not require adjudication.

Other Air Issues

The County contends that the draft Air permit does not comply with the requirements of 6 NYCRR 212.4 (and Part 212, Table 2), regarding fugitive ammonia emissions from liquid ammonia storage tanks. The County would show, through its proposed air expert, that the emission rate potential will be within the regulatory purview of 6 NYCRR Part 212, Table 2.

However, DEC Staff clarified that the requirements of 6 NYCRR Part 212 apply to process sources only; not combustion sources. In any event, DEC Staff states that the Application materials contain an analysis of impacts of ammonia from the cooling tower stacks. That analysis shows that ammonia emissions will be approximately two percent of the applicable ambient limit.

The County contends that regardless of whether the storage tank is considered a 'process source' or a 'combustion source', the emissions are subject to the requirements of 6 NYCRR 212.4.

Ruling #18: 6 NYCRR Part 212 is entitled 'Process Emission Sources' and is not applicable to combustion sources. DEC Staff correctly determined that the liquid ammonia storage tanks are a combustion source, not a process source. The County's argument that the emissions are subject to the requirements of 6 NYCRR 212.4 regardless of whether the tank is considered a 'process source' or a 'combustion source', is in error and must be rejected.

The County asserts an omission in the Application, in that no safety and emergency response plan for handling ammonia is in the Application materials. The Applicant concedes that the Application materials do not include such a plan, but the Application contains a statement that such a plan will be filed as part of required compliance filings. See, 16 NYCRR Part 1003, Compliance Filings.

Ruling #19: This does not rise to the level of an adjudicable issue because it would not result in denial, major modification or imposition of significant permit conditions in the draft Air permit. An ammonia handling and emergency response plan will be developed, subject to DEC Staff review and approval.

In its next proposed issue, the County contends that because the Application materials contain air modeling for 15 operating scenarios, the draft Air permit must contain emission limits that account for all 15 scenarios. The draft Air permit addresses only three of the 15 scenarios.

DEC Staff contends that DEC Staff used the three worst case scenarios to establish the emissions limits in the draft Air permit. (The three scenarios are described in draft Air permit conditions 92.1 through 92.3.) But, the County, through its proposed Air expert, would show that other states use a matrix representing all proposed operating scenarios and providing a BACT determination for each such scenario.

Ruling #20: The County has not raised an adjudicable issue regarding the DEC Staff decision not to use an alternative protocol to compare various operating scenarios, because the County did not identify any statute, rule or guidance document that requires such a protocol.

The County contends that a Continuous Opacity Monitoring (COM) system is required for this project pursuant to 40 CFR Part 60. But, the Applicant and DEC Staff contend that COM is not required for this facility because the proposed duct burners are below the applicability size of 250 million BTU's.

With that explanation, the County offered to discuss this issue further with the DEC Staff to attempt resolution.

Ruling #21: In view of the explanation provided by DEC Staff and the Applicant, and the County's reevaluation of this proposed issue, no adjudicable issue has been identified.

Next, the County contends that the draft Air permit fails to state federal record keeping and notice requirements (set forth in 40 CFR 60), instead incorporating these federal requirements by reference, in violation of 6 NYCRR 201-6.5(a)(1). 6 NYCRR 201-6.5(a)(1) requires that each Title V facility permit issued under Part 201 must include provisions stating

all federal emission limitations and standards, including those operational requirements and limitations that assure compliance with all applicable requirements at the time of permit issuance.

The County contends that the federal New Source Performance Standards (NSPS), 40 CFR 60, Subparts A, DB and GG, contain twelve distinct, different and sometimes conflicting federal requirements applicable to the Bowline Unit 3 project. But, the County was not able to provide one example of conflicting requirements applicable to this project. Nonetheless, the County contends that the draft Air permit does not adequately identify the federal regulations applicable to this project, and does not constitute conditions that ensure compliance with the applicable federal requirements, in violation of 6 NYCRR 201-6.5(a)(1).

First, DEC Staff states that all federal record keeping and notice requirements set forth in 40 CFR 60 are permit conditions of the draft PSD permit and some of these requirements are repeated in the draft Air permit. Also, DEC Staff disputes the County's assertion that the federal regulations, 40 CFR 60, set forth conflicting provisions applicable to this project. Lastly, DEC Staff contends that the New Source Performance Standards (NSPS) are federal requirements that DEC implements for USEPA, without discretion. DEC Staff asserts that the conditions of the draft Air permit are adequate. However, DEC Staff offered to include additional language addressing federal Subpart GG, Custom Fuel Monitoring provisions.

Ruling #22: The County has not identified an omission or defect in the draft permits requiring any further review. I note that DEC Staff offered to include some additional language in the draft Air permit. I direct DEC Staff to revise the draft Air permit to include additional language addressing federal Subpart GG, Custom Fuel Monitoring provisions, consistent with the DEC Staff offer during the joint issues conference.

Next, the County contends that the Air permit Application is incomplete because it fails to address the applicability of 40 CFR 60, Subpart Kb, related to oil storage vessel design and testing. The Applicant responded that applicability of this Subpart is a legal issue, and in any event, this Subpart is a record keeping requirement. It does not, the Applicant asserts, address emission standards. DEC Staff explained that the tank is an existing oil storage tank that is below the vapor pressure requirements of Subpart Kb and consequently is not subject to regulation under that Subpart.

Ruling #23: The County has not identified an omission or defect regarding oil storage vessel design and testing in the draft Air permit requiring any further review.

The Village asserts an omission or defect in the Application and draft permits, in that fugitive dust during the construction phase is not addressed. The Village asserts that a fugitive dust control plan is required. But, the Applicant responded that fugitive dust during construction is addressed in the draft PSD permit, although no fugitive dust plan is in the Application materials. Those conditions require that trucks used for transporting soil or gravel during construction must be covered; truck speed on site must be controlled to minimize fugitive dust; dust suppression systems must be used on all unpaved roads and undisturbed areas, as necessary; and any dust producing stockpiled material must be removed periodically.

Ruling #24: In view of the draft PSD permit conditions discussed above, the Village has not identified an omission or defect in the draft permits showing that fugitive dust control is a significant issue to be adjudicated.

Lastly, the County asserts that, pursuant to 6 NYCRR 201-5.1, the DEC regulations prohibit issuance of a State Facilities Permit (the Air permit) to a source that is defined as a 'major source' and instead require permit review for a Title V permit. See, 6 NYCRR Subpart 201-5, State Facility Permits and 6 NYCRR Subpart 201-6, Title V Facility Permits. 6 NYCRR 201-2.1(b)(21) sets forth the definition of a 'major stationary source' or 'major source'.

The DEC Staff responded that under the federal regulations, the Applicant may obtain the federal Title V permit within one year of commencement of operation, and this is what Mirant has decided to do with respect to the Bowline Unit 3 project. See, 6 NYCRR Subpart 201-6.3(a). Further, DEC Staff stated that the draft PSD permit and the draft Air permit (including a draft preconstruction permit) are equivalent to a Title V permit for construction. Moreover, the County has not identified any substantive Title V requirement that has not been addressed in the draft Air permit (draft preconstruction permit).

Ruling #25: The County has misconstrued the applicable statutory and regulatory provisions. No issue of law or adjudicable issue has been raised. No further review is necessary.

The County withdrew two proposed issues during the joint issues conference: its issue asserting that the draft Air permit improperly fails to establish SO2 emission rate requirements, in violation of 6 NYCRR 200.10 and 257-2, and its issue asserting that the Application does not include a required Title IV Acid Rain Application.

Party Status Summary Ruling

Ruling #26: In conclusion, upon review of the criteria for determining issues and party status, and the petitions for full party status, I find that Riverkeeper, Scenic Hudson, the County of Rockland and the Village of Haverstraw each have raised substantive and significant issues and filed acceptable petitions pursuant to 624.5(b)(1) and (2). As discussed above, Riverkeeper and Scenic Hudson have raised a substantive and significant issue 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.(16)

The County and the Village 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 joint petition of Rockland County Conservation Association and the Passaic River Coalition 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.

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.(17) Ordinarily, expedited appeals must be filed to the Commissioner in writing within five days of the disputed ruling.(18)

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, 50 Wolf Road, Albany, New York, 12233-1010) before 4 p.m. on the seventh day from issuance of this ruling (or the first business day thereafter. All replies to appeals must be received before 4 p.m. on the seventh day following the date on which appeals are due.

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 ASCII or Rich Text Format. 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 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's rulings directly, rather than merely restate a party's contentions.

For the New York State Department
of Environmental Conservation

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

Dated: March 30, 2001
Albany, New York

To: Attached Bowline 3 Distribution List
(dated March 16, 2001)

1 See Department of Public Service Case No. 99-F-1164, Application by Mirant Bowline, LLC, for a Certificate of Environmental Compatibility and Public Need to Construct and Operate a 750 Megawatt Generating Facility in the Town of Haverstraw, Rockland County.

2 A draft Prevention of Significant Deterioration (PSD) permit dated November 13, 2000 was the subject of public notice in local newspapers during the week of November 13, 2000. The relationship of the draft PSD permit application to this hearing is discussed in the following section of this ruling, 'Rulings on Procedural Issues'.

3 ECL Article 70, and 6 NYCRR Part 621.

4 PSL §167, §172.

5 The Village's brief primarily addressed the interplay between the responsibilities of the Board and the DEC Commissioner, rather than whether hearings are required on the PSD permit issues. This brief was not responsive to the issue identified for briefing, and in fairness to the other parties, was not considered in making these rulings.

6 6 NYCRR 231-2.1(b)(13) , definition of 'emission reduction credit'.

7 See, §624.5(b)(1)(ii), Petitioner's environmental interest.

8 §624.4(c)(4).

9 §624.4(c)(3).

10 Draft SPDES Permit, Part I, page 9 of 15.

11 As noted supra, by letter dated March 15, 2001, Mirant filed a letter and technical documentation, stating that its consultant has performed an additional CORMIX analysis that simulates the worst-case conditions under the draft SPDES permit. This submission does not affect Ruling #9, and requires no further review.

12 Letter, dated January 27, 2000 (from Riva, USEPA, to Sedefian, DEC); in Application Volume V, Appendix 5B, Appendix C.

13 Oil-firing operation is limited to eight hours of operation between 8 a.m. and 8 p.m., only at 50% load, and with only two of the three turbines operating on oil, while the third operates on natural gas. See, Draft Air Permit dated January 16, 2001. The reduced load limit results in a lower cooling tower plume. Therefore, predicted impacts occur at different locations than under the gas-fired scenario.

14 A supplement to the PSL Article X Application, filed July 17, 2000.

15 See Art X Application, Appendix 5B, footnote to the second Table (pages are unnumbered).

16 6 NYCRR 624.5(b)(2)(i).

17 624.8(d)(2).

18 624.6(e)(1).

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