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NYC Department of Sanitation (Southwest Brooklyn Incinerator) - Ruling, December 2, 1993

Ruling, December 2, 1993

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

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

NYC DEPARTMENT OF SANITATION
APPLICANT
Southwest Brooklyn Incinerator

RULINGS ON LEGAL ISSUES
AND RELATED FACTUAL ISSUES

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

SUMMARY

These rulings address the threshold legal issues identified at the March 3, 1993 Issues Conference regarding the captioned permit applications. After the Commissioner issues an Interim Decision about these issues of law, I will advise the Issues Conference participants about the need to reconvene the Issues Conference.

These rulings conclude the following. The Department does not have the authority to review the Negative Declaration issued by the NYC Department of Sanitation. There are issues about whether Part 231 and the Federal NSPS and PSD provisions apply to the Project. The intent of ECL 27-0707(2)(b) has been met. The permit applications are complete with respect to the information required by 360-3.2(a)(13). The Applicant has adequately applied the BACT standard.

PROJECT DESCRIPTION AND ENVIRONMENTAL REVIEW

The New York City Department of Sanitation (DOS or the Applicant) filed applications pursuant to ECL Article 19 and Article 27, Title 7, and 6 NYCRR Parts 219, and 360-3 with the Region 2 Office of the Department of Environmental Conservation (the Department) for permits to install and upgrade pollution control equipment, and to operate the Southwest Brooklyn Incinerator (the Project or Facility). The Facility is located off of the Shore Parkway in the Bensonhurst section of Brooklyn (Kings County).

The Project includes retrofitting three combustion trains with air pollution control systems, and dismantling the existing fourth combustion train. The three rehabilitated trains would operate independently. The total maximum throughput capacity for the Facility would be 750 tons per day. Ash residue would be disposed at landfills located in Kenmore, NY; Charles City County, VA and Johnstown, PA.

Pursuant to ECL Article 8 [State Environmental Quality Review Act (SEQRA)], the DOS, as lead agency, conducted a coordinated review. The DOS issued a Negative Declaration on May 29, 1992 and an Amendment to the Negative Declaration on July 10, 1992. The Amendment provided addition reasons to support the Negative Declaration. No Environmental Impact Statement was prepared.

LEGISLATIVE HEARING

A Notice of Public Hearing dated February 5, 1993 (the Notice) appeared in The New York Times on February 9, 1993, and in the Department's Environmental Notice Bulletin on February 10, 1993. Consistent with the Notice, Administrative Law Judge Daniel P. O'Connell presided over legislative hearing sessions regarding the permit applications on March 2 and 3, 1993 at the David A. Boody Junior High School, (Public School No. 228) in Brooklyn beginning at 7:00 P.M. each evening.

Over 600 people attended the March 2, 1993 legislative session and approximately 150 people attended the March 3, 1993 legislative session. There were a total of 61 speakers for the two sessions. Speakers included administrators from the DOS, the Department Staff, Brooklyn Borough officials, Congressional spokespersons, State legislators or their spokespersons, City government officials including members of the City Council, representatives from local community and business groups, and local residents. Except for the DOS and the Department Staff, all speakers opposed the Project.

Numerous written comments opposing the Project were also filed. The oral and written public statements demanded the preparation of an Environmental Impact Statement for the Project, and expressed concerns about air quality and the potential health risks associated with incineration.

ISSUES CONFERENCE

An Issues Conference convened on March 3, 1993 to hear requests for party status and to define potential issues for adjudication. The Issues Conference was held at the Applicant's offices, 125 Worth Street, New York, NY. Appearances at the Issues Conference included the following.

From the NYC Department of Law, Elizabeth St. Clair, Esq., Assistant Corporation Counsel, Robert Orlin, Esq., Assistant Corporation Counsel, and Robert Rosenthal, Esq., Assistant Corporation Counsel, appeared on behalf of the Applicant.

Benjamin Conlon, Esq., Senior Attorney, Paul Gallay, Esq., Regional Attorney and Laurieann Silberfeld, Esq., Assistant Regional Attorney, appeared for the Department's Region 2 Staff (the Staff).

Larry Shapiro, Esq. appeared on behalf of the New York Public Interest Research Group (NYPIRG), New York, NY.

Robert J. Miller, Esq. and Paul T. Vink, Esq. from Blutrich and Miller, New York, NY appeared on behalf of the Federation of Italian American Organizations of Brooklyn, Ltd. (FIAO).

William Colton, Esq., Brooklyn, NY appeared for Elizabeth Holtzman.

Denis Dorreggiani and Mr. Colton appeared on behalf of the Honorable Frank Barbaro, Member of the New York State Assembly, and Charles Ragusa.

Judith Baron appeared for the Honorable Daniel Feldman, Member of the New York State Assembly.

The Honorable Martin M. Solomon, Member of the New York State Senate, Sandy Aboulafia and Joan Ribaudo each appeared pro se.

During the Issues Conference, Ms. Aboulafia, Ms. Ribaudo and Mr. Ragusa agreed to consolidate their individual requests for party status with the request filed by Assemblyman Frank Barbaro. By letter dated March 4, 1993, Assemblyman Barbaro confirmed the consolidation and identified himself as the attorney for the group.

Bernard Fryshman, Ph.D. and Ralph J. Perfetto individually filed requests for party status. Neither person appeared at the Issues Conference on March 3, 1993.

The March 3, 1993 Issues Conference focused on identifying threshold legal issues. Factual issues were not discussed because their relevance to the proceeding would depend on how the legal issues were decided. These rulings address the following issues of law:

  1. Whether the Department has the authority to review the Negative Declaration for the proposed Facility;
  2. Whether the requirements of 6 NYCRR Part 231 and the Federal New Source Performance Standards (NSPS) and the Prevention of Significant Deterioration (PSD) program apply to the Project;
  3. Whether ECL 27-0707(2)(b) applies to the proposed Facility;
  4. Whether there is a lack of economic information about the proposed Facility as required by 360-3.2(a)(13) that renders the application incomplete;
  5. Whether the Applicant should consider recycling as part of the best available control technology analysis (BACT).

In a memorandum dated March 18, 1993, I provided the Issues Conference participants with a schedule for filing briefs and replies about these issues of law. All Issues Conference participants filed briefs except Senator Solomon, Dr. Fryshman and Mr. Perfetto. In a letter dated April 26, 1993, Assemblyman Feldman stated he generally concurred with the brief filed by Ms. Holtzman. The Department Staff, the DOS, NYPIRG, Ms. Holtzman and Assemblyman Barbaro filed replies. All briefs and replies were postmarked within the time frames established in the briefing schedule. The Office of Hearings received the last reply on May 20, 1993.

The prospective Intervenors contended there were issues about which emission standards apply to the Project and whether the Facility should be considered a resource recovery facility. These contentions do not raise substantive and significant issues for adjudication, and are summarily addressed below.

The draft permit conditions incorporate the emission standards provided in Subpart 219-2 (Municipal and Private Solid Waste Incineration Facilities). These standards are more stringent than the emission standards provided in Subpart 219-6 (Existing Incinerators - New York City, Nassau and Westchester Counties). The Applicant has accepted all the draft permit conditions. Consequently, there is no issue about which emission standards will be implemented at the Facility.

Since the DOS does not intend to install an energy recovery system at the Facility until 1999, NYPIRG and Ms. Holtzman asserted the Project should not be considered a resource recovery facility. The Applicant, however, makes no claim that the Project is a resource recovery facility. Consequently, there is no dispute to resolve.

I. REVIEW OF THE NEGATIVE DECLARATION

At the Issues Conference, the Applicant argued the Department has the authority to review the Negative Declaration in this proceeding based on the decision in Holtzman et al. v. Lloyd The Court ruled the Department is authorized pursuant to 6 NYCRR 621.9(f) to evaluate the Negative Declaration while reviewing the permit applications for the Project. The Court concluded the Petitioners had not exhausted their administrative remedies, and dismissed the challenge. Ms. Holtzman and the other petitioners have filed an appeal. (Supreme Court, New York County, Index No. 30539/92). The Applicant interpreted 6 NYCRR 621.9(f) to mean the Department cannot issue the requested permits unless the Department issues "findings" that conclude the DOS has complied with SEQR.

By letter dated August 13, 1993, the Applicant changed its original position. The Applicant argued the Supreme Court should review the merits of the Negative Declaration issued by DOS. The Applicant contended the question about whether the Department has the authority to review the Negative Declaration in this proceeding was not an issue for adjudication.

At the Issues Conference, NYPIRG, Ms. Holtzman and Assemblyman Barbaro argued the Applicant should not manipulate the Courts and this administrative proceeding to prevent the appropriate environmental review of the Project. These Issues Conference participants requested an adjournment of this proceeding until the Appellate Division reviewed the Holtzman matter.

The Federation of Italian American Organizations of Brooklyn (FIAO) did not present any argument, in its brief or reply, about whether the Department has the authority to review the Negative Declaration in this proceeding.

The Staff asserted there are two reasons why the Department lacks the authority to review the Negative Declaration in this proceeding. First, the Staff argued the "findings" referenced in 621.9(f) are defined in 617.2(r), and are required only if there is an environmental impact statement (EIS). Since there is no EIS for the Project, the Staff concluded the involved agencies do not issue a findings statement [617.9(c)]. Second, the Staff stated the Department was not the lead agency. According to the Staff, the SEQR process ended when the DOS issued the Negative Declaration (A-1 Recycling and Salvage Commissioner's Interim Decision dated March 19, 1992).

DISCUSSION AND RULING: The DEC does not have the authority to review the Negative Declaration for the proposed Facility in this proceeding. The Department of Sanitation, as the lead agency, conducted a coordinated environmental review of the proposed Facility pursuant to ECL Article 8 (SEQRA). The DOS issued a Negative Declaration for the Project on May 29, 1992, and an Amendment on July 10, 1992 which provided addition reasons to support the Negative Declaration. No Environmental Impact Statement was prepared.

Section 621.9(f) does not expand the Department's role in the environmental review of the Project. The "findings" referred to in 621.9(f) are not required because there is no EIS for the Project [617.9(c)].

Since the DOS was the lead agency, it is responsible for complying with SEQR, and only the Courts are able to enforce this responsibility (Declaratory Ruling 8-01 Petition of Baker et al. dated September 14, 1984). Furthermore, the SEQR process ended when the DOS, as lead agency, issued the Negative Declaration (A-1 Recycling and Salvage Commissioner's Interim Decision dated March 19, 1992). Consequently, the only aspects of the Project that can be examined in this proceeding are whether the proposed Facility meets the regulatory criteria for the requested permits.

Requests for Adjournment

NYPIRG, Ms. Holtzman and Assemblyman Barbaro requested an adjournment of this proceeding until the Appellate Division reviewed the Holtzman et al. v. Lloyd matter regarding the Project's Negative Declaration.

RULING: The requests to adjourn this proceeding pending the Appellate Division's review of Holtzman are denied.

Factual Issues related to the Negative Declaration

The Issues Conference participants asserted a number of factual issues related to the need to review the Negative Declaration. These issues included whether the health risk assessment submitted with the application is adequate, and whether the Project would effect property values and the general economic condition of the area adjacent to the Project. Other factual issues related to the need to review the Negative Declaration included traffic impacts, impacts to coastal waters and the quality of sewage sludge, and the cumulative impacts of this incinerator with the facility proposed at the Brooklyn Navy Yard.

RULING: Since the Department does not have the authority to review the Negative Declaration for the proposed Facility the factual issues identified above are beyond the scope of this proceeding and will not be considered further.

II. THE APPLICABILITY OF 6 NYCRR PART 231, AND FEDERAL AIR REGULATIONS

Citing Owl Energy Resources, Inc. (Interim Decision dated February 26, 1993), NYPIRG, Ms. Holtzman and Assemblyman Barbaro asserted 6 NYCRR Part 231 applies to the proposed Facility because the Facility has not met the exemption criteria provided in 201.8 and 201.9. The prospective Intervenors further argued the baseline emissions data provided in the application are not reliable. Stating that New York State has the authority to implement the Federal air quality regulations, these Issues Conference participants asserted the Project is subject to Federal Prevention of Significant Deterioration (PSD) requirements and should meet the Federal New Source Performance Standards (NSPS).

FIAO presented no argument about the applicability of air regulations.

The Applicant argued Part 231 does not apply to the proposed Facility because: (1) the Project meets the exemption conditions provided in 201.8 and 201.9, and (2) the net emission increase from the Facility would not exceed the de minimus emission limits established in 231.9 (Table 1). The Applicant further contended the Federal PSD requirements do not apply to the Project because the proposed Facility is not a major modification, and there would not be a significant net increase in emissions.

The Department Staff explained there are two applicable versions of Part 231 -- a 1980 version and a 1984 version In their briefs, none of the other Issues Conference participants argued there were two applicable versions of Part 231. In the replies, however, NYPIRG and Ms. Holtzman asserted both versions of Part 231 apply to the Project. NYPIRG also argued the Commissioner should not grant an exemption pursuant to 231.9(b) [1980 version].. According to the Staff, the Environmental Protection Agency (the EPA) rejected the 1984 version of Part 231 as part of New York State's Implementation Plan (SIP). The Staff concluded the 1980 version of Part 231 remains in the SIP as a federally enforceable regulation. With respect to the 1980 version of Part 231, the Staff recommended the Commissioner should exempt the proposed Facility pursuant to 231.9(b). For the reasons stated by the Applicant, the Department Staff argued the proposed Facility is exempt from the 1984 version of Part 231 and from the Federal PSD requirements and NSPS.

RULING AND DISCUSSION WITH RESPECT TO ECL 19-0321: During its last session, the State Legislature passed the Clean Air Compliance Act (Chapter 608, Laws of 1993) which the Governor signed into law this past summer. ECL 19-0321 of the NYS Clean Air Compliance Act outlines specific criteria for constructing and operating certain municipally sponsored incinerators.

Pursuant to ECL 19-0321, facilities having the potential to emit 25 tons per year (tpy) of either NOx or volatile organic compounds (VOCs), that are sponsored by a municipality with a population greater than one million and have filed complete permit applications with the Department by November 6, 1992, must obtain emission offsets for NOx and VOCs. The Southwest Brooklyn Incinerator meets these criteria.

Pursuant to ECL 19-0321, the Applicant must obtain emission offsets for NOx at a ratio of 1:1.3. Although not permitted by Part 231, ECL 19-0321 authorizes the Applicant to substitute VOC emissions for the required NOx offsets. As explained below, NOx offsets would not be required pursuant to Part 231.

In addition, the Applicant would be required pursuant to ECL 19-0321 to obtain VOC emission offsets at a ratio of 1:1.3. NYSCACA allows NOx emissions to substitute for the required VOC offsets. With respect to VOC emissions, if the offset requirements provided in Part 231 (1:1 ratio) also apply to the Project, then the 1 of the 1.3 offsets would come from VOC emissions as required by Part 231 while the .3 of the 1.3 offsets could come from either VOC emissions or NOx emissions.

RULING REGARDING APPLICABLE VERSIONS OF PART 231: Only the 1984 version of Part 231 could apply to the Project. The 1980 version of Part 231 is no longer enforceable under state law because the 1980 version was repealed and replaced by the 1984 version. Whether the EPA has enforcement authority over the 1980 version of Part 231 as part of New York State's Implementation Plan is beyond the scope of this proceeding.

DISCUSSION WITH RESPECT TO PART 231: As the title states, Part 231 (New Source Review in Nonattainment Areas) pertains to facilities located in areas that do not meet the national ambient air quality standards. The provisions of Part 231 pertain to new facilities and existing facilities undergoing modifications where the net change in emissions exceeds the de minimus emission limits (231.9). Since the Facility is located in a non-attainment area for carbon monoxide (CO) and ozone, Part 231 may apply to the Project.

Part 231 would require emission offsets (231.5) for CO and VOCs. Pursuant to 231.2(a)(2), ozone is measured by emissions of VOCs. As noted above, VOC offsets are already required pursuant to ECL 19-0321 and permits NOx emissions to substitute for VOC offsets. With respect to VOC emission offsets, however, the applicability of Part 231 is necessary to determine whether NOx emissions can substitute for all or part of the VOC offsets required by ECL 19-0321.

If Part 231 applies to the Project, the Applicant also must show that its other major facilities meet the applicable regulatory standards [321.3(b)], and provide an air quality impact evaluation [231.6]. Furthermore, 231.4 would require the use of lowest achievable emissions rate (LAER) technology to control CO and VOC emissions. Using LAER technology to control CO emissions, however, is not at issue because the Applicant has agreed to implement this technology.

The applicability criteria (231.2) for Part 231 seem straight forward. However, there is a question about whether the Southwest Brooklyn Incinerator should be treated as a new facility for regulatory purposes. Because operations at the Facility have been discontinuous, the fundamental question in determining the applicability of Part 231 is whether the Facility should be treated, for regulatory purposes, as a new facility.

If the Facility is treated as a new facility, Part 231 would apply to the Project [231.2(a)(1)]. If, for regulatory purposes, the Facility is treated as an existing facility undergoing a modification, the previous actual annual emissions would be compared with the proposed emissions. If the net change in emissions exceeds the de minimus emission limits, Part 231 would apply to the Project [231.2(a)(3)].

The applicability criteria for each air resources regulation together with previous Decisions of the Commissioner explain how to determine which of these regulations would apply to various emission sources. (See Hydra-Co. Generations Inc. and Babcock & Wilcox Solvay Power Inc. (Salt City), Decision dated September 6, 1988; Owl Energy Resources, Inc., Interim Decision dated February 26, 1993; Owl Energy Resources, Inc., Ruling on Motion for Reconsideration dated May 17, 1993.)

Discontinuous Operations

Based on the above referenced Decisions, 201.9 (Reactivation of an Existing Source which has been Shut Down Voluntarily) is the rule for deciding whether a facility with discontinuous operations should be treated, for regulatory purposes, as a new facility or as an existing facility. Section 201.9 outlines two criteria: (1) operations stopped voluntarily, and (2) the emissions, at the time of the shut down, met applicable standards. The 201.9 criteria do not address any aspect of the proposed construction.

Special Treatment for Existing Facilities where the Modification is Limited to Improving the Pollution Control Equipment

If it is determined that a facility with discontinuous operations meets the 201.9 criteria, it may be necessary to review the 201.8 criteria. This review is required when the terms of the substantive rule prescribe that an existing facility undergoing a modification must comply with new facility standards regardless of whether the proposed modification is beneficial from a pollution control perspective. Section 201.8 provides an exemption from more restrictive air regulations and thereby encourages existing facilities to upgrade pollution control equipment.

To comply with 201.8, the proposed modification must be limited to upgrading the pollution control equipment. A modification that includes other substantial construction would not be entitled to the exemption provided by 201.8. (Hydra-Co. Generations Inc. and Babcock & Wilcox Solvay Power Inc. (Salt City), Decision dated September 6, 1988)

The need to review the 201.8 criteria depends on whether the terms of the substantive regulations contain applicability criteria that are as broad or broader than the 201.8 exemption criteria. For example, Subpart 219-2 (Municipal and Private Solid Waste Incineration Facilities) applies to new and modified incinerators that file applications for permits to construct after December 1, 1988. However, an existing incinerator undergoing a modification may qualify for an exemption from these emission standards if the proposal meets the 201.8 criteria and limits the modification to upgrading the pollution control equipment.

Similarly, Subpart 225-1 (Fuel Composition and Use - Sulfur Limitations) limits the sulfur content of fuels. However, an existing facility undergoing a modification may also qualify for an exemption from this standard if the proposal meets the 201.8 criteria and limits the modification to upgrading the pollution control equipment.

In this instance, however, a 201.8 review would not determine the applicability of Part 231. Part 231 has specific applicability criteria (231.2) that provide as broad or broader exemption provisions than 201.8. While 201.8 does not allow any increase in emission rates and limits the modification to upgrading pollution control equipment, Part 231 permits a de minimus increase in emission rates [231.2(a)(3)] and does not restrict the modification exclusively to upgrading pollution control equipment. If it is determined, for regulatory purposes, that the Southwest Brooklyn Incinerator should be treated as an existing facility (i.e. it meets the 201.9 criteria), the applicability of Part 231 depends on the Project meeting the criteria at 231.2 rather than the 201.8 criteria regardless of whether the Project involves substantial construction.

RULING WITH RESPECT TO PART 231: Section 201.9 outlines two criteria: (1) operations stopped voluntarily, and (2) the emissions, at the time of the shut down, met applicable standards. The Project meets the first condition, The DOS voluntarily closed the Southwest Brooklyn Incinerator in September 1991. The Department neither ordered the DOS to close the Facility by September 1991, nor threatened the DOS with an enforcement action unless the Facility closed.

The assertion by NYPIRG and Ms. Holtzman about the Applicant's need to meet the EPA's February 11, 1991 Emission Guidelines does not prove involuntary closure of the Facility. The Guidelines amend 40 CFR 60.30 to include Subpart CA (Emission Guidelines and Compliance Times for Municipal Waste Combustors). Subpart CA requires the States to develop regulations that implement the emission levels specified in the Guidelines. Assuming these Emission Guidelines would apply to the Facility, the Applicant is under no legal obligation to stop operating the Facility or to follow the Guidelines until their effective date. Until the effective date of these future regulations, the cessation of operations not required by the terms of a Court or administrative order is voluntary.

There are several conflicting offers of proof that make it impossible to determine whether the Facility meets the second criterion identified in 201.9. While it is undisputed that the Applicant conducted stack tests for particulates and opacity in February 27, 1991 and March 1, 1991, the Facility continued to operate until September 1991. There is no information in the application to show the Facility met the applicable air standards in September 1991.

Although the Order on Consent dated July 3, 1991 (DEC No. R2-3450-91-01) identified violations of the solid wastes regulations, it is silent about any violations of the air regulations. A strong inference can be drawn that there were no air violations because the Department did not initiate an enforcement action against the Applicant with respect to the air regulations. Nevertheless, NYPIRG alleged that when DOS Deputy Commissioner for Waste Management and Facilities Development, Robert Lemieux, appeared before the NYC Council Committee on Contracts (May 14, 1993), Commissioner Lemieux testified the Facility burned waste in excess of its permitted capacity (NYPIRG Reply Brief p. 8). Since NYPIRG made this offer of proof in its Reply Brief, the Applicant has not had an opportunity to rebut the offer a proof. Consequently, there is an issue about whether the Facility complied with the applicable State emission standards at the time of the voluntary shut down.

If it is concluded after hearing that the Facility does not meet the 201.9 criteria, then the Facility would be regarded, for regulatory purposes, as a new facility. In which case, Part 231 would apply to the Facility [231.2(a)(1)].

If it is concluded after hearing that the Facility meets the 201.9 criteria, then the Facility would be treated as an existing facility undergoing a modification. As explained above, the next question in the process of deciding whether Part 231 applies to the Project is to look at the applicability criteria at 231.2, and determine whether the net change in emissions resulting from the modification would exceed the de minimus emission limits provided in 231.9 (Table 1).

Whether the net change in emissions exceeds the de minimus emission limits requires a comparison of previous emissions data with the proposed emissions [231.2(a)(3)]. The baseline or previous emissions data must be annual actual emissions [231.2(c)]. Annual actual emissions are yearly emissions from a continuously operated facility at either maximum capacity or as limited by permit condition [231.1(b)(3)].

The emission data reported in Appendix A of the Air Permit Application are the result of stack tests and continuous emissions monitoring (CEM) at the Facility during July 23 - 30, 1990 and October 21 - 28, 1990. Using this data, the Applicant estimated the annual emissions for the Facility based on the average amount of waste incinerated and the average annual hours of operation.

Assuming the Facility would be treated as an existing facility, it cannot be determined, at this point, whether the emission data reported in Appendix A are annual actual emissions as defined by regulation. There is a question about whether the emissions data reported in Appendix A are representative of the yearly emissions from continuous operations at the Facility at either maximum capacity or as limited by permit condition. Therefore, the Applicant will be given an opportunity at hearing to explain why the data reported in Appendix A should be considered the annual actual emissions, or the Applicant may provide any additional information to show what were the annual actual emissions at the Facility before operations stopped in September 1991.

DISCUSSION AND RULING WITH RESPECT TO FEDERAL AIR REGULATIONS: New York State has the authority to determine whether the Federal New Source Performance Standards (NSPS) [40 CFR 60] and the standards for the Prevention of Significant Deterioration (PSD) apply to the Project [40 CFR Part 52, Subpart HH (New York)]. The NSPS apply to new emission sources, and facilities undergoing either modifications (40 CFR 60.14) or reconstructions (40 CFR 60.15). The PSD criteria apply to new major stationary sources and existing major stationary sources undergoing major modifications [40 CFR 52.21(b)].

The Federal NSPS and PSD requirements do not provide any rule (comparable to 6 NYCRR 201.9) about how to treat a facility with discontinuous operations. The Issues Conference participants did not identify, and I did not find, any case law that addressed the applicability of the Federal NSPS and PSD requirements within the context of discontinuous operations.

The Federal New Source Performance Standards (40 CFR 60) do provide definitions for the terms "modification" and "reconstruction". Pursuant to 40 CFR 60.14, a modification is any change to a facility resulting in an increase in the rate of any regulated emission. A reconstruction is any change to a facility where the fixed capital costs of the new equipment exceeds 50% of the fixed capital costs of constructing a new facility (40 CFR 60.15).

Whether the Project is a modification pursuant to 40 CFR 60.14 depends on whether there would be an increase in emission rates. Based on previous emission rate data, the Applicant asserted there would not be an increase in emission rates. As indicated above, however, there is a question about how representative the previous emissions data reported in Appendix A is. Therefore, at hearing the Applicant will be given an opportunity to explain why the data reported in Appendix A should be considered representative of previous emission rates, or provide any additional information to show there would not be an increase in emission rates.

There is not sufficient information in the application to judge whether the fixed costs to rehabilitate the Facility are greater than 50% of the fixed costs to construct a new facility. Therefore, there will be a hearing to develop the factual record about whether the Project is a reconstruction pursuant to 40 CFR 60.14.

Assuming the Southwest Brooklyn Incinerator is treated as an existing major source, rather than a new major source despite its discontinuous operations, the applicability of 40 CFR 52.21 (PSD) to the Facility would depend on whether the Project is a major modification pursuant to 40 CFR 52.21(b)(2)(ii) that would result in a significant net increase in emissions [40 CFR 52.21(b)(23)(i)]. According to the previous emission rate data provided in the application, the Applicant asserted the Project is not a major modification because there would not be a significant net increase in emissions. This assertion is based on a comparison between the previous emissions data and the expected emissions. As pointed out above, there is a question about whether the previous emissions data reported in Appendix A is representative. Therefore, the Applicant will be given an opportunity to explain why the data reported in Appendix A should be considered representative of previous emissions, or provide additional information to show why the Project is not a major modification resulting in a significant net increase in emissions.

SUMMARY OF ISSUES RELATING TO AIR REGULATIONS: The applicability of both State and Federal regulations depends on comparing previous emission rates and concentrations at the Facility with the proposed emission rates and concentrations. To answer these applicability questions, the principal factual question focuses on the emissions data provided in the application. The Applicant has not shown that the emissions data are representative of prior operations at the Facility. Other factual questions relate to whether the Facility complied with State emission limits, and the costs of the Project.

Various State air quality regulations may apply to the Project. These provisions are not mutually exclusive, and do not conflict with each other. Since the Applicant must comply with all applicable regulatory criteria, certain issues about particular air contaminants are settled.

For CO, Part 231 may require the Applicant to obtain offsets at a 1:1 ratio. Whether the Applicant must use LAER technology to control CO emissions, however, is not at issue because the draft permit requires the Applicant to use this technology. As discussed above, the SEQR process ended when the DOS, as lead agency, issued a Negative Declaration. Consequently, if Part 231 does not apply to the Facility, then ECL Article 8 and Part 617 (SEQR) cannot be relied on to require offsets to mitigate impacts from CO emissions.

For VOCs, Part 231 may require the Applicant to obtain offsets at a 1:1 ratio and to use LAER technology. The draft permit does not identify what type of technology (either BACT or LAER) the Applicant must use to control these emissions. Since ECL 19-0321 applies, the Applicant is required to obtain VOC emission offsets at a ratio of 1:1.3. Although not permitted by Part 231, ECL 19-0321 allows a reduction in NOx emissions to substitute for VOC offsets. If both Part 231 and ECL 19-0321 apply to the Project, then offsets at a ratio of 1.3 would still be required. The 1 of the 1.3 offsets would come from VOC emissions as required by Part 231 while the .3 of the 1.3 offsets could come from either VOC or NOx emissions.

Prior to the effective date of Part 231, NOx was not recognized as a precursor to ozone. Rather, ozone is measured in terms of VOC emissions [231.2(a)(2)]. Therefore, within the context of Part 231, there is no issue about whether the Applicant would have to obtain offsets or use LAER technology to control NOx emissions. Since ECL 19-0321 applies to the Project, the Applicant is required to obtain emission offsets at a ratio of 1:1.3 for NOx, and may substitute NOx offsets with reductions in VOC emissions.

There is no issue about whether the Applicant must use LAER technology to control NOx emissions within the context of Subpart 219-2. Since the Applicant has agreed to implement the requirements in Part 219-2, LAER technology will be used to control NOx emissions in areas of ozone non-attainment [219-2.2(c)(3)]. The draft permit prescribes a urea injection selective non-catalytic reduction (SNCR) system which represents LAER for the Facility (page 9 of Attachment 2 to the Department Staff's Brief).

Part 231 cannot be relied upon to require the Applicant to obtain offsets or to implement LAER technology for any other air contaminant (e.g. SO2). The applicability of Part 231 depends on whether individual air contaminants exceed individual ambient air quality standards. Since the Facility is located in a non-attainment area for CO and ozone, emissions of CO and ozone (measured as VOCs) in excess of the de minimus limits are the only air contaminants that would require the Facility to comply with Part 231. The previous statement assumes the Facility should be treated, for regulatory purposes, as an existing facility.

After a factual record is developed about previous emissions at the Facility and the cost of the Project, a final determination about the applicability of the Federal air regulations can be made. If PSD requirements apply to the Project, the Applicant would be required to file for a permit.

III. COMPLIANCE WITH ECL 27-0707(2)(b)

After April 1, 1991, ECL 27-0707(2)(b) requires municipalities to have an approved Solid Waste Management Plan (SWMP) in place before the Department can determine whether a municipality's application for a permit to construct a solid waste management facility is complete.

Based on ECL 27-0707(2)(b), FIAO and Assemblyman Barbaro asserted the Department must deny the permits requested by the Applicant because the City did not have an approved SWMP before April 1, 1991.

The Applicant argued the Department approved the City's SWMP before issuing the Notice of Complete Application for the proposed Facility. The Applicant concluded the Notice of Complete Application for the proposed Facility substantively complied with ECL 27-0707(2)(b).

The Staff argued the purpose of ECL 27-0707(2)(b) is to ensure that a municipality seeking permits for solid waste management facilities has an approved SWMP before the Department grants the requested permits. Since the City had an approved SWMP before the Department determined the applications for the Project were complete, the Staff contended the intent of ECL 27-0707(2)(b) has been met.

RULING: The intent of ECL 27-0707(2)(b) is not to place an indefinite moratorium on municipalities that miss the April 1, 1991 deadline for filing approvable solid waste management plans (SWMP). Rather, the intent is to ensure municipalities prepare SWMP [SES Brooklyn Company et al. Fifth Interim Decision of the Commissioner, September 9, 1993].

There is no dispute that the Department approved the City's SWMP in October 1992 before issuing the Notice of Complete Application for the proposed Facility on November 6, 1992. Consequently, the intent of ECL 27-0707(2)(b) has been met. There is no issue for adjudication.

IV. DISCLOSURE OF ECONOMIC INFORMATION

NYPIRG, FIAO, Ms. Holtzman and Assemblyman Barbaro alleged the application is incomplete because the DOS did not provide the economic information required by 360-3.2(a)(13). Citing Foster Wheeler-Broome County and Broome County Resource Recovery Agency, (Interim Decision dated September 19, 1990) the perspective Intervenors argued economic disclosure is required. NYPIRG and others argued the Applicant is not exempt from this requirement, and has not obtained a variance from this requirement.

The Applicant argued it complied with 360-3.2(a)(13) because the City's SWMP essentially provides the same economic information required by this regulatory provision. According to the DOS, the economic information in the SWMP shows the proposed Facility would not create a disincentive to recycling.

According to the Staff, the amount of solid waste the DOS must manage combined with the economic information in the SWMP provide sufficient information to conclude the Project would not create a disincentive to recycling.

DISCUSSION AND RULING: Section 360-3.2(a)(13) requires the disclosure of economic information about the Project to show there would be compliance with the State solid waste management hierarchy favoring waste recycling and reduction over incineration and landfilling. In Foster Wheeler-Broome County, the Commissioner determined that compliance with the State's solid waste management hierarchy policy was a function of sizing that facility in a way that would avoid creating economic disincentives to reducing wastes and recycling.

The size of the proposed Facility and its impact on recycling are not at issue in this proceeding. The DOS collects about half of the solid waste generated in the City. Of that amount, the Project would incinerate between 3.6% and 6.8% of the solid waste collected by the DOS. Since the Project would accept such a small portion of the overall waste stream, the size of the proposed Facility would not discourage recycling.

The economic information required by 360-3.2(a)(13) has been disclosed. The approved Solid Waste Management Plan (SWMP) provides economic information about the Project and other solid waste management facilities in the City. The SWMP also includes a comprehensive recycling program. Compliance with the recycling program will be a precondition to operating this Facility as well as the Applicant's other solid waste management facilities (SES Brooklyn Company et al., the Commissioner's Fifth Interim Decision dated September 9, 1993).

V. RECYCLING AS A FORM OF BEST AVAILABLE CONTROL TECHNOLOGY (BACT)

According to NYPIRG, best available control technology (BACT) would apply to the proposed Facility through PSD and Part 219 requirements. Citing the Remand Order dated February 28, 1992 by the USEPA Administrator regarding the Brooklyn Navy Yard Resource Recovery Facility (PSD Appeal No. 88-10), NYPIRG, Ms. Holtzman and Assemblyman Barbaro asserted the Applicant's BACT analysis for NOx emissions is inadequate because the Applicant did not consider recycling as a control technology.

In its brief and reply, FIAO presented no argument about whether the Applicant must consider recycling in its BACT analysis.

The Applicant argued it is not required to consider recycling as an air pollution control technology for the following reasons. According to the Applicant, it is not necessary to establish a connection between source separation and improving emissions based on the Commissioner's Interim Decision dated September 19, 1990 regarding Foster Wheeler-Broome County. The Applicant also asserted the Project does not require a PSD permit, and the approved SWMP already considers the recycling issues raised by NYPIRG. Finally, the Applicant contended the Project would use the lowest achievable emissions rate (LAER) technology to limit NOx emissions. According to the Applicant, the LAER technology is more restrictive than BACT.

The Staff argued BACT requirements do not apply because the Project does not require a PSD permit.

RULING AND DISCUSSION: In nonattainment areas for ozone, Part 219-2 requires the use of LAER technologies to control NOx emissions. The Applicant will control NOx emissions by using LAER technologies which are at least as stringent as BACT. Therefore, by applying LAER technologies to control NOx emissions, the Applicant will, at the very least, apply the BACT standard. There is no issue to adjudicate.

THE APPLICANT'S COMPLIANCE HISTORY

Senator Solomon argued the Department should deny the requested permits because the Applicant's compliance history demonstrates the DOS would not operate the proposed Facility in a way that would comply with the applicable ECL, regulations and permit conditions. The basis for Senator Solomon's argument is the Commissioner's Enforcement Guidance Memorandum (EGM) entitled Record of Compliance dated August 8, 1991. Senator Solomon provided documentation to support his assertion that the DOS has violated various provisions of the ECL and regulations regarding other DOS solid waste management facilities. Other Issues Conference participants such as NYPIRG made similar assertions. (See filing for Party Status p. 71.)

DISCUSSION AND RULING: At the Issues Conference, I defined this potential issue as a public policy issue that was distinct from the legal issues discussed above. This potential issue was not discussed at the Issues Conference because the volume of Senator Solomon's documentation prevented a thorough discussion of this topic. The briefing schedule placed a priority on the legal issues and did not provide the Issues Conference participants with an opportunity to address the Applicant's compliance history.

Since the Issues Conference, Senator Solomon has provided all Issues Conference participants with copies of his offers of proof regrading the Applicant's compliance history. However, the Commissioner has revised the Record of Compliance EGM. Attached is a copy of the revised EGM dated March 5, 1993.

I reserve ruling on whether this potential issue requires adjudication until after all the Issues Conference participants have reviewed the revised EGM and presented their respective positions about the Applicant's compliance history. After the Commissioner issues an Interim Decision regarding the legal issues discussed above, I will advise the participants about how the Issues Conference record on this potential issue will be developed further.

PARTY STATUS

Pursuant to 6 NYCRR 624.4(c) the Administrative Law Judge must base his ruling on Party Status on whether the Petitioners for Party Status have interests "which are likely to be affected by the proposed project." I find that every one requesting Party Status satisfies the required interest level.

Pursuant to 624.4(b)(2), persons requesting Party Status must also raise a substantive and significant issue or be prepared to materially contribute to such an issue. Since NYPIRG, Ms. Holtzman and Assemblyman Barbaro have successfully raised substantive and significant issues for adjudication regarding the applicability of State and Federal air regulations, their requests for Party Status are granted.

Since it will be necessary to reconvene the Issues Conference (See FURTHER PROCEEDINGS below), I will reserve ruling on the other requests for Party Status.

APPEALS

Section 624.6(d) provides for an appeal to the Commissioner from the Administrative Law Judge's ruling on issues. Appeals from the ALJ's rulings must be sent to: Office of the Commissioner, New York State Department of Environmental Conservation, 50 Wolf Road, Albany, New York 12233-1010.

The Commissioner must receive the appeals by December 23, 1993. A copy of any appeal filed with the Commissioner must be sent to the ALJ and to each Issues Conference participant on the Service List. Telefaxed copies of appeals will not be accepted.

Replies to appeals are authorized. The Commissioner must receive the replies by January 19, 1994. Replies must be distributed in the same manner as described above for filing appeals.

At this time, appeals with respect to requests for Party Status are not authorized. The Issues Conference participants will have an opportunity to appeal the ALJ's rulings on requests for Party Status after further proceedings are held.

FURTHER PROCEEDINGS

Other factual issues not related to the legal issues addressed above were not discussed at the Issues Conference. All Issues Conference participants will be provided with an opportunity to address other potential factual issues. I will advise the Issues Conference participants about further proceedings to consider specific factual issues and any other new relevant information after the Commissioner issues an Interim Decision regarding these issues of law.

/s/
Daniel P. O'Connell
Administrative Law Judge

Dated: Albany, New York
November 18, 1993

To: Service List dated March 10, 1993

attachment

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

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

NYC Department of Sanitation
APPLICANT
Southwest Brooklyn Incinerator

MEMORANDUM

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

This memorandum corrects the date by which the Issues Conference participants must file replies to appeals from the Rulings on Legal Issues and Related Factual Issues dated November 18, 1993 (the Rulings). The Rulings indicate that the return date for replies is January 19, 1993 (page 20). The correct date is January 19, 1994.

/s/
Daniel P. O'Connell
Administrative Law Judge

Dated: Albany, New York
December 2, 1993

To: Service List dated March 10, 1993

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