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NYC Department of Sanitation (Southwest Brooklyn Incinerator) - Interim Decision, March 2, 1994

Interim Decision, March 2, 1994

50 Wolf Road
Albany, New York 12233-1550

In the Matter

- of -

Applications to construct and to operate a
solid waste management facility and
incinerator pursuant to Environmental
Conservation Law of the State of New York
(ECL) Articles 19 and 27, and Title 6 of the
Official Compilation of Codes, Rules and
Regulations of the State of New York
(6 NYCRR) Parts 219 and 360 by the


DEC No. 2-6106-2/9-0


March 2, 1994


This Interim Decision is in relation to appeals of the November 18, 1993 Rulings on Legal Issues and Related Factual Issues (the "Rulings") that were issued by Administrative Law Judge ("ALJ") Daniel P. O'Connell in the captioned matter. Appeals to the Rulings were taken by the City of New York (the "City" or "Applicant"), the Staff of the Department of Environmental Conservation (the "Staff") and the following third party intervenors (collectively, the "Intervenors"): the New York Public Interest Research Group ("NYPIRG"), Elizabeth Holtzman, Assemblyman Frank Barbaro consolidated with Charles Ragusa, Sandy Aboulafia and Joan Ribaudo, Senator Martin M. Solomon and Assemblyman Daniel L. Feldman.

This Interim Decision will only address the legal standards by which this application will be judged. A subsequent ruling by ALJ O'Connell will address whether offers of proof that relate to the relevant standards meet the substantive and significant test for determining adjudicable issues [former 6 NYCRR 624.6(c)].

The proposed project consists of the installation and upgrading of air pollution control equipment and the reactivation of operations at the Southwest Brooklyn Incinerator (the "Project" or "Facility"). The Facility is a municipal solid waste incinerator. There are no plans to install an energy recovery system until 1999.

Many of the same issues were raised on appeal by more than one party and therefore the Interim Decision will address the issues by topic.

Legal Issues

"New" or "Existing" Facility pursuant to State Air Regulations

There is an issue as to whether the Facility is subject to the standards for new or existing facilities with respect to 6 NYCRR Parts 219 (Incinerators) and 231 (New Source Review in Non-Attainment Areas). Since New York City (the "City" or "Applicant") has agreed to comply with the standards for new facilities in Part 219, only the applicability of Part 231 is reviewed below.

The Facility had a certificate to operate an air contamination source through March 1991. When the certificate expired, it was not renewed. In addition, the City and the Department of Environmental Conservation (the "Department") executed a consent order on July 3, 1991 (the "Consent Order") which addressed solid waste management issues. The Consent Order provided authority to operate the Facility until December 31, 1993, contingent on compliance with the Consent Order (see paragraph III. of the Consent Order). Ultimately, the City closed down the Facility in September 1991.

It has previously been decided that the test for determining if a facility should be considered an existing source is whether it is entitled to be permitted using the standards applicable to existing sources (In the Matter of Owl Energy Resources, Inc., Interim Decision of the Commissioner, February 26, 1993). In this case, such a determination requires an examination of several regulations and their interrelationships. The question is complicated by the fact that, as in many other situations, not only is the Facility being reactivated but construction will also occur.

For the purpose of this analysis, it is important to distinguish between facilities that physically exist but which, because of discontinuous operations, will be considered new sources for regulatory purposes and existing sources which, because of a modification in their operation, will be subjected to new facility standards. The analysis of the first situation is performed using the criteria in 6 NYCRR 201.9. The analysis of the latter situation depends principally on the applicability provisions of the substantive rule at issue or, as further discussed below, 6 NYCRR 201.8.

Applicability and Satisfaction of 6 NYCRR 201.9

Since the Facility is being reactivated, it is beyond dispute that it must satisfy the requirements of 6 NYCRR 201.9 (Reactivation of an existing source which has been shut down voluntarily) if it is to be considered an existing source for regulatory purposes. It must shown that it was shut down voluntarily and that, at the time of the shutdown, it was in compliance with emission standards. Contrary to NYPIRG's assertions, there is no requirement that a facility demonstrate that its reactivation is not accompanied by additional substantial construction. As discussed further below, this requirement is related to satisfaction of 6 NYCRR 201.8.

There is no fact issue with respect to the voluntary nature of the shutdown and therefore it is appropriate to resolve this question as a matter of law in this Interim Decision. Specifically, it is beyond dispute that there was no outstanding enforcement proceeding or even a threat of an enforcement proceeding at the time of the shutdown. A consent order that had been issued just a couple of months prior to the September 1991 shutdown authorized operations through December 1993. Under these circumstances, the shutdown can only be viewed as a voluntary management decision.

The question of whether there is a substantive fact issue concerning the compliance with emission standards at the time of the shutdown requiring adjudication is remanded to ALJ O'Connell. The City's failure to renew its air permit is not a bar to a determination that the Facility met the applicable emission standards at the time of the shutdown. The criterion at issue relates to emission standards, not permit status (cf. 6 NYCRR 201.8). Moreover, the issuance of a consent order by the Department which explicitly permitted operations until December 31, 1993, provides a legal basis for the continued operation of the Facility.

ALJ O'Connell found that the testimony of Deputy Commissioner Robert Lemieux before the New York City Council Committee on Contracts created a fact issue concerning whether the Facility was in compliance at the time of its shutdown. He is directed to make a determination on this issue after having reviewed the full text of Commissioner Lemieux's testimony and any other relevant information which the parties have to offer on this question.

Applicability of 6 NYCRR 201.8

There is an additional question concerning whether the Facility must also satisfy the requirements of 6 NYCRR 201.8 (Voluntary replacement or upgrading of air cleaning equipment used with an existing source). This provision operates as an exemption of general applicability to any air resource rule which requires compliance with new facility standards. It is intended to encourage operators to upgrade or replace pollution control equipment. Such an exemption is needed because upgrades or replacements are modifications under the Department's rules [6 NYCRR 200.1(hh)] and some of the air resource rules require compliance with new and more stringent emission standards upon the implementation of any facility modification, whether or not environmentally benign (see e.g., 6 NYCRR 219-2.1).

With respect to 6 NYCRR Part 231 ("Part 231"), however, only certain modifications would subject a facility to the more stringent standards contained in that rule. Specifically, only modifications that result in a greater than de minimis increase in actual annual emissions, as defined in 6 NYCRR 231.9, are subject to these standards [6 NYCRR 231.2(a)(3)]. Therefore, by its explicit terms, Part 231 is not applicable to this action if the actual annual emissions that result from the Project are below this threshold. Section 201.8 only exempts sources from complying with new facility regulations where they would otherwise be subject to them; it does not subject sources to new facility standards where they are otherwise exempt.

The Intervenors have suggested that this interpretation is inconsistent with prior decisions involving proposals to reactivate facilities where similar questions have arisen. They cite the decisions In the Matter of Hydra-Co. Generations, Inc. (Decision of the Commissioner, September 6, 1988) and In the Matter of Owl Energy Resources, Inc., supra. My review of these decisions shows that there is no conflict.

In the Hydra-Co. decision the issue related to the standard for new facilities under 6 NYCRR 225-1.2, 227.3 and 227.5. The decision noted that while the provisions of section 201.9 would not prevent the facility's consideration as an existing source, it was necessary to demonstrate compliance with the terms of section 201.8 as well since construction was involved in addition to source reactivation. The rules cited above, which establish new facility standards for sulfur dioxide ("SO2"), particulates and oxides of nitrogen ("NOx"), by their own terms are applicable to any source which applies for a construction permit after particular dates set forth in those rules. Since the applicability provisions of those rules would not exempt construction activities that amounted to voluntary replacement or upgrading of air cleaning equipment, the applicability of section 201.8 was put at issue. Ultimately, it was concluded that the proposal did not qualify for the treatment afforded by section 201.8 because the construction went well beyond the voluntary replacement or upgrading of air cleaning equipment.

The Owl Energy decision involved a situation where the undisputed facts demonstrated that the provisions of section 201.9 were not satisfied. Therefore, whether section 201.8 could have been satisfied was never decided as it was a moot question. Although there is language in the Owl Energy decision which might be read as requiring a showing of compliance with both sections 201.8 and 201.9, the context was intended to presume a need to rely on both rules. As stated above, where the substantive rule itself would not require compliance with the new facility standard in a given situation, reliance on other rules is unnecessary.

Since any new major facility in a non-attainment area is subject to Part 231, major facilities that are reactivated must demonstrate that they qualify under the provisions of section 201.9 in order to be treated as existing facilities. However, if the construction which occurs at the time of reactivation results in less than a de minimis increase in actual annual emissions, Part 231 is, by its explicit terms, inapplicable.

Whether it can be concluded at this point in the proceeding that the change in actual annual emissions for the pollutants in non-attainment attributable to the construction will result in less than a de minimis increase will be addressed below.

"New" or "Existing" Facility pursuant to Federal Air Regulations

The Clean Air Act contains requirements for the prevention of significant deterioration of air quality ("PSD") for areas that are in attainment with ambient air quality standards (see 42 USC 7470 et. seq.). These requirements apply to the construction of major sources of air pollution and modifications of existing sources. The program is based on permitting such sources and requires, among other things, that they use the best available control technology ("BACT"). The U.S. Environmental Protection Agency ("EPA") has delegated authority to the Department to process PSD applications on its behalf [6 NYCRR 200.10(d)].

The EPA has also set new source performance standards ("NSPS") for new stationary sources (see 40 CFR Part 60). These standards are applicable to new emission sources and modifications and reconstructions of existing sources (40 CFR 60.14 and 60.15). The NSPS for municipal waste combusters were promulgated by EPA in January 1991 (see 40 CFR Part 60 Subpart Ca). The EPA has also delegated authority to implement and enforce the NSPS [6 NYCRR 200.10(a)].

The Intervenors in this proceeding argue that the Facility is subject to these federal programs either because it should be considered to be a new source or because it meets the criteria for applying these programs to existing sources.

The Intervenors suggest that the state's criteria for judging when reactivated facilities are considered to be new sources is appropriate for use in determining the applicability of federal standards and programs as well. They rely on language in state regulation which indicates that EPA has delegated authority to the Department to issue permits in accordance with 6 NYCRR Part 201 [see 6 NYCRR 200.10(a) and (d)]. However, this language is only intended to denote that the procedures for permit processing are contained in this rule. I find that the only basis for determining applicability for the federal PSD and NSPS programs is under federal law.

The federal rules governing the applicability of PSD and NSPS do not contain explicit provisions that are comparable to 6 NYCRR 201.9. Without such provisions, the determination of applicability would be limited to the criteria in the federal rules applicable to existing facilities [i.e., 40 CFR 52.21(b)(2)(i)] with respect to modifications under PSD, and 40 CFR 60.14 and 60.15 with respect to modifications and reconstructions under NSPS.

On several occasions, however, EPA has issued written guidance on this issue. Although these guidance documents were not submitted by the parties, it is appropriate to take official notice of them. A listing of such documents is included as Appendix A to this Interim Decision. If the guidance provided by these documents is considered, it is clear that the Facility would be treated as an existing one for purposes of determining the applicability of PSD and NSPS.

The guidance indicates that reactivated facilities should be considered as new facilities where the shutdown was intended by the facility owner to be permanent. Even if this criterion is used, it is clear that the City always intended to reactivate the Facility. Therefore, I find no basis under which the Facility could be treated as a new one for purposes of PSD review or NSPS applicability.

The determination of applicability, therefore, must be made on the basis of federal criteria cited above for existing facilities.

Applicability of Part 231, PSD Requirements and NSPS Standards to an Existing Facility

The foregoing discussion concludes that the Facility should be judged as an existing source for purposes of determining the applicability of federal regulations. While this Interim Decision does not exclude the possibility that the Facility will be considered a new source under state regulations, the applicability of Part 231 must also be considered even if the Facility is considered as an existing source. The following resolves appeals of legal issues related to the applicability of Part 231 and NSPS considering the Facility as an existing source. There are no legal issues concerning the standards for applying PSD requirements to existing sources.

With respect to the Part 231 applicability criteria for modifications, it is contended by the Intervenors that the appropriate comparison is between the emissions attributable to the operation of the pre-existing facility and the full potential emissions (actual annual emissions) of the proposed modification. The rules require that applicability be based on a comparison of "...annual actual emissions from the air contamination source project..." and the "de minimis emission limits shown in section 231.9..." [6 NYCRR 231.2(a)(3)]. In this case, the air contamination source project consists of a modification to an existing source [see 6 NYCRR 231.(b)(2(ii)]. The appropriate measure is the change in annual actual emissions caused by the modification.

Furthermore, it is also clear that the annual emission limit in the draft permit is a condition which limits the annual actual emissions of the Facility for purposes of 6 NYCRR 231.1(3). Therefore, for purposes of determining whether the modification of the Facility results in more than a de minimis increase in emissions, the appropriate comparison is between the full potential emissions of the pre-existing facility and the annual emission limit in the draft permit.

With respect to the NSPS applicability criteria for modifications of facilities, it is contended that it is improper to use emission factors. As stated above, the sole criteria for determining NSPS applicability is under federal law. That law requires that emission factors be used to arrive at emission rates where no permit limit sets that rate [see 40 CFR 60.14(b)(1)].

There are a number of outstanding factual questions proposed concerning the applicability determinations under Part 231, NSPS and PSD. While some of these fact questions were addressed in the Rulings, it is inappropriate to deal with appeals of ALJ O'Connell's determinations on them in this Interim Decision. Now that the legal standards have been clarified, ALJ O'Connell will need to request further offers of proof that are directed specifically to the application of these standards.

Enforceability of the 1980 Version of Part 231

In 1984, the Department promulgated the existing version of Part 231. In that promulgation, the earlier version (the "1980 version") was repealed. However, the existing version of the rule was never approved by EPA nor was it incorporated into the State's Implementation Plan ("SIP"). The SIP is the plan which the states implement in order to meet the standards established pursuant to the federal Clean Air Act.

Currently, the 1980 version is part of New York State's SIP. It is clear that under federal law, the EPA can enforce the requirements of the SIP (42 USC 7413). The issue presented here is whether New York has any authority to enforce this portion of the SIP even though it has been superseded under state rules.

Although the 1980 version no longer explicitly appears in state rules, the existing rules provide that permits cannot be issued to construct an air contamination source where the operation of the source will result in a violation of any control strategy in a federally approved SIP [6 NYCRR 201.4(a)(3)]. It is under this provision that the Department requires compliance with the 1980 version.

Whether the Facility is subject to the 1980 version and whether there are substantive issues of fact that are relevant to this determination are not decided in this Interim Decision. ALJ O'Connell will need to address these questions in a subsequent ruling.

Applicability of the NYS Clean Air Compliance Act ("NYSCACA")

The ALJ determined that the recently enacted NYSCACA (Chapter 608, Laws of 1993) was applicable to the Facility. None of the parties dispute this conclusion.

He went on to discuss the interrelationship between the offset requirements of that Act, in particular ECL 19-0321, and Part 231. I find that he did not correctly explain that relationship.

The only area of overlapping or conflicting requirements arises with respect to offsets for the emission of volatile organic compounds ("VOCs"). ECL 19-0321 contains requirements only for offsets of VOCs and NOx. On the other hand, since the City is in non-attainment for ozone and carbon monoxide ("CO"), even if Part 231 were applicable, its offset requirements would only affect VOCs and CO (see 6 NYCRR 231.5).

In the event that VOC offsets are required, there is no provision in NYSCACA that would permit the use of NOx offsets as a substitute. NYSCACA requires that any such offsets be made in a ratio of 1.3:1 [ECL 19-0321(1)(c)] which is in an amount that would also satisfy the offset requirements of Part 231.

Economic Disclosure

The two principal reasons for requiring economic information related to a solid waste incinerator are to ensure that the facility is not oversized considering its wasteshed and to provide local decisionmakers with information necessary to judge the advisability of the undertaking (In the Matter of Foster Wheeler-Broome County, Interim Decision of the Commissioner, September 19, 1990). Given the size of the wasteshed, there can be no doubt that the facility is not oversized and would not be in competition with recycling efforts.

The City's projection of costs and tipping fees for the Facility, like most projections, is not definitive. It is, however, comprehensive enough to provide an adequate basis for local decisionmaking.

To the extent that recent developments, such as the decision to dispose of incinerator ash out of state, are not reflected in the City's estimates, those estimates should be updated. No issue is presented for adjudication, however.

Consideration of Fuel Cleaning in Establishing the Best Available Control Technology ("BACT") and Lowest Achievable Emission Rate ("LAER")

In the Rulings, ALJ O'Connell determined that no further consideration needed to be given to fuel cleaning in the BACT determination for NOx since the Facility was already committed to implementing the LAER standard for NOx which needed to be at least as stringent as BACT.

Any determination concerning the need for considering fuel cleaning as part of BACT would only have relevance if it is ultimately determined that the Facility is subject to the requirements of PSD. In such an event, however, the Ruling begs the question of whether additional fuel cleaning requires consideration. As demonstrated below, although the emission limits for facilities subject to LAER must be as stringent as those that are subject to BACT, the analysis of the technology that is required to satisfy these requirements differs. If it is determined that PSD requirements apply, a BACT analysis of available technologies will need to be performed by the Applicant.

Although not directly addressed in the Rulings, the appeals raise a related question of whether a similar analysis of technologies should be required for the pollutants subject to the LAER requirements. I find that it is efficient to resolve that question as well as part of this Interim Decision.

Intervenors raise two points with respect to the determination of LAER, one procedural and the other substantive. They argue that the Applicant failed to perform a "top-down" analysis of control technologies which included fuel cleaning. Second, they argue that fuel cleaning would result in improvements in emissions rate for the pollutants subject to LAER.

With respect to the first issue, the intervenors confuse the requirements of LAER with those of BACT. EPA has required the so-called "top-down" analysis to determine the technologies that represent BACT. This requires adopting the most stringent technology as BACT unless it can be shown that the technology is unreliable or financially infeasible [40 CFR 52.21(b)(12)]. It is clear that fuel cleaning must be considered as one such technology where a relationship can be demonstrated between it and emissions reductions (In the Matter of the Brooklyn Navy Yard Resource Recovery Facility, PSD Appeal No. 88-10, Remand Order, February 28, 1992).

LAER, on the other hand, is determined on the basis of emission rates. LAER is defined under federal law as a rate of emissions which reflects,

(A) the most stringent emission limitation which is contained in the implementation plan of any State for such class or category of source, unless the owner or operator of the proposed source demonstrates that such limitations are not achievable, or

(B) the most stringent emission limitation which is achieved in practice by such class or category of source, whichever is more stringent.

42 USC 7501

Although the definition under state rules is not identical, I have already found the two to be essentially equivalent (In the Matter of SES Brooklyn Company, L.P., Fourth Interim Decision of the Commissioner, November 14, 1989).

The permitting authority can require fuel cleaning if shown necessary to achieve the emission rate that is defined as LAER. However, unlike BACT, there is no requirement that an applicant consider a full range of technologies, only that the ultimate emission rate be the lowest achievable.

Given the foregoing, in order to raise an issue for adjudication, the intervenors need to show that there is some substantive basis for the proposition that fuel cleaning would result in a reduction in emissions of one of the contaminants subject to LAER. They must do so in light of the fact that the City has already committed to an extensive recycling program and to a prohibition of the burning of certain wastes at the Facility. These measures are incorporated as enforceable permit conditions for the Facility.

It is the purpose of this Interim Decision to determine the legal standards by which the offers of proof on any outstanding fact issues will be judged. Therefore, no conclusion needs to be reached at this point on whether the Intervenors' offer meets the substantive and significant standard. Rather that question will be addressed by ALJ O'Connell in his next ruling.

Other Matters

Some of the Intervenors raised other legal issues on appeal that were not part of the Ruling and were not intended to be subject to appeal. These issues concern the applicability of certain provisions of the 1990 Clean Air Act Amendments and the completeness of the application and the need to adjudicated issues. Although not properly part of the appeal of the Rulings, these questions are dealt with below for the sake of administrative efficiency. Senator Solomon's request that issues relating to the Department's record of compliance policy raises no issue of law. Whether or not there is a substantive and significant issue of fact requiring adjudication will be determined by the ALJ in a subsequent ruling.

Applicability of Offset Requirements of the 1990 Clean Air Act Amendments

The Intervenors seek a determination that the offset provisions of the 1990 amendments to the Clean Air Act (Pub. L. 101-549) ("CAAA") are applicable to this Facility. As stated in the recent decision concerning the proposed resource recovery project at the Brooklyn Navy Yard, at present, it is uncertain whether EPA will apply the offset provisions of the CAAA to facilities with complete applications pending on November 15, 1992 (see In the Matter of SES Brooklyn Company, L.P., Fifth Interim Decision of the Commissioner, September 9, 1993, citing the Memorandum from J. Seitz, EPA Director of Office of Air Quality Planning and Standards, New Source Review Program Supplemental Transitional Guidance on Applicability of New Part D, NSR Permit Requirements, September 2, 1992). According to the referenced EPA guidance, the determination of whether facilities have complete permit applications as of November 15, 1992 is to be determined by the State reviewing authorities. As discussed below, the Department determined that the application for the Facility was complete before that date and there is no basis for modifying that determination.

Completeness of the Application

Intervenors argue that the application is incomplete because the Applicant failed to provide adequate information on the type, rate and quantity of air pollutants that would be emitted by the Facility. During the course of application review, the Department's determination of completeness under the Uniform Procedures Act (ECL Article 70) cannot be changed merely because the application lacks information (In the Matter of LaFever Excavating, Inc., Interim Decision of the Commissioner, October 28, 1991). The remedy in such a situation is to compel the submission of any information needed to make findings or determinations required by law as part of the application review process [ECL 70-0117(2); 6 NYCRR 621.15(b)].

Request for an Adjournment

Some of the Intervenors request that an adjournment be granted pending the outcome of the judicial review of the City's compliance with Article 8 of the ECL. ALJ O'Connell denied such a request and I find no reason to disturb his judgment.

Summary of Major Holdings

This Interim Decision finds that the applicability of Part 231 should be based first on a determination of whether the facility satisfies the requirements of section 201.9. If it does, then the question of applicability depends solely on a comparison of the actual annual emissions during the operations prior to shutdown with the actual annual emissions under the proposed permit.

It also finds that the Facility should be treated as an existing facility for purposes of determining the applicability of both NSPS and PSD. Whether they are applicable or whether there are fact issues concerning their applicability is not determined here.

The 1980 version of Part 231 is enforceable under state law. Whether it is applicable to the Facility is not determined.

There is no actual or potential conflict between the offset requirements of Part 231 and NYSCACA.

The submittals by the City in satisfaction of the economic disclosure requirements of 6 NYCRR Part 360 are satisfactory as a matter of law. The disclosure only needs to be updated to reflect changes such as the new ash disposal proposal.

The Applicant need not complete a top down analysis of available technologies to satisfy the requirements of LAER. Fuel cleaning can be required as part of a LAER determination if it is shown that such is needed in order to lower the emission rate of an affected pollutant. In this case, there is no evidence showing fuel cleaning beyond that which is already required is necessary for that purpose.

At this time, it cannot be known with certainty whether the offset requirements of the CAAA will apply to this Facility.

Further Proceedings

This matter is remanded to ALJ O'Connell to conduct an issues conference and to take further offers of proof on matters that are relevant to the standards applicable to the permitting of the Facility as determined in this Interim Decision. He will thereafter, issue a ruling concerning whether there are any substantive and significant issues of fact that require adjudication.

IN WITNESS WHEREOF, the Department of Environmental Conservation has caused this Interim Decision to be signed and issued and has filed the same with all maps, plans, reports, and other papers relating thereto in its office in the County of Albany, New York this 2nd day of March, 1994


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