Part 487 Regulatory Flexibility Analysis for Small Businesses and Local Governments
6 NYCRR Part 487 Analyzing Environmental Justice Issues in Siting Major Electric Generating Facilities Pursuant to Public Service Law Article 10
Regulatory Flexibility Analysis for Small Businesses and Local Governments
1. Effect of Rule:
The Department of Environmental Conservation (Department) proposes new regulations in 6 NYCRR Part 487 to implement the requirement in the Power NY Act of 2011 (Chapter 388 of the Laws of 2011) that the Department promulgates rules and regulations for the analysis of environmental justice (EJ) issues (EJ regulations) within 12 months. These EJ regulations will not have any substantial adverse effects on small businesses and local governments.
These EJ regulations will apply only to persons seeking a Certificate of Environmental Compatibility and Public Need (Certificate) authorizing the construction of a major electric generating facility pursuant to Article 10 of the Public Service Law (PSL) (Article 10). For the most part, major electric generating facilities are large corporations; however, because Article 10 defines a "major electric generating facility" as an electric generating facility with a nameplate generating capacity of twenty-five thousand kilowatts (25 megawatts) or more, smaller businesses, particularly wind energy developers, will fall under the jurisdiction of Article 10 and subsequently these proposed regulations. Twenty-five megawatts of wind capacity is enough to supply at least 6,000 homes. The Department expects that a wind energy project with this capacity would not often, if ever, meet the definition of a small business because it is unlikely that a wind energy project in New York State would be independently owned and operated given the cost of constructing a wind plant of this size. According to the American Wind Energy Association, a national trade association representing the wind energy industry, a wind plant typically costs approximately $1,000 per kilowatt of installed capacity, so a 25 megawatt wind plant would cost more than $2 million.
As of Fall 2011, the Department knows of sixteen wind energy projects currently operating in New York State with a rated capacity of about 1,339.2 megawatts. These projects are located in Clinton, Erie, Franklin, Herkimer, Lewis, Madison, Steuben, and Wyoming counties. The Department is aware of approximately 30 wind projects that are under active review or have obtained permits but have not yet begun construction. Pursuant to PSL § 162(4)(d), Article 10 does not apply to projects for which an application for the applicable permit has already been made. Some of these projects that have applied for but not yet obtained permits may elect to become subject to the provisions of Article 10 pursuant to PSL § 162(5).
These EJ regulations will not directly affect any sector of local government, unless the local government itself will be the applicant for a Certificate authorizing the construction of a major electric generating facility. The number and type of local governments that may apply for a Certificate under Article 10 cannot be estimated. The Department is unaware of any local government wind projects being considered at this time. Any municipality in which a major electric generating facility is proposed to be located that is not an applicant for a Certificate will benefit from the public participation and intervenor funding provisions of Article 10 and these EJ regulations to the extent they result in an augmented review of environmental and health impacts of the proposed facility in that municipality. The number of local governments that will be affected by these EJ regulations as beneficiary of an augmented environmental review will be dependent on how many major electric generating facilities are proposed to be sited pursuant to Article 10 and how many will be proposed to be sited in an EJ area. The Department of Public Service (DPS) has estimated that approximately 6 to 8 facilities per year may be proposed for siting under Article 10, but this estimate is speculative.
2. Compliance Requirements:
The only persons required to comply with these EJ regulations will be those in the energy industry proposing to construct a 25 megawatt or more capacity major electric generating facility or to increase the capacity of an existing electric generating facility by 25 megawatts or more. These persons are generally well funded companies given the substantial costs of complying with the provisions of Article 10, including intervenor fees and obtaining necessary air and other permits from the Department. The additional EJ analyses and evaluations that a small business will need to undertake to comply with these regulations will not be significant in relation to the analyses and evaluations necessary to comply with the provisions of Article 10 (implemented through regulations being promulgated by DPS). No sector of local government is required to undertake any affirmative acts to comply with these regulations unless the local government will be an applicant for a Certificate. The compliance requirements for a local government in this case would be the same as those for a small business.
3. Professional Services:
Any small business subject to these EJ regulations is likely to require professional services to comply with these regulations, which will not differ in type from the professional services needed to comply with Article 10. It is anticipated that the small business will use the same professional services that it employs to comply with the other requirements of Article 10. It is not anticipated that the costs to a small business for the professional services necessary to comply with these regulations will be significant in relation to the costs of complying with the other requirements of Article 10.
Local governments, except those that are applicants for a Certificate, are not required to take any affirmative acts to comply with these regulations; therefore, local governments will not have the need for professional services to comply with these regulations. A local government that is an applicant for a Certificate would have the same need for professional services as a small business to comply with these regulations. The municipality in which the facility is proposed to be located (except if the municipality is an applicant for a Certificate) is entitled to intervenor funding under Article 10 which may be used to obtain professional services to assist the municipality in participating in the Article 10 siting process, including review of an applicant's EJ analysis; however, these regulations do not require that a municipality participate.
4. Compliance Costs:
The costs to small businesses and local governments to comply with these EJ regulations if they apply are limited to the costs associated with any studies, analyses and evaluations required to support an EJ analysis as a required part of an application for a Certificate. There are no recurring costs to small businesses or local governments associated with these regulations. The costs associated with undertaking an EJ analysis are expected to be minimal in comparison to the costs associated with the other requirements of Article 10. There will be no costs to local governments that are not applicant for a Certificate.
5. Economic and Technological Feasibility:
There should be no economic or technological feasibility issues associated with compliance with these EJ regulations by small business or local governments. The analyses and evaluations required by these regulations do not differ significantly from the analyses and evaluations required to comply with the other requirements of Article 10.
6. Minimizing Adverse Impact:
These EJ regulations are not anticipated to have any adverse economic impact on small businesses or local governments that are required to comply with these regulations as they will not impose significant costs above and beyond those associated with meeting all of the other requirements of Article 10. These regulations do not include significant requirements beyond those that are expressly required by statute to be included in the EJ regulations pursuant to Article 10. Where additional requirements are included in these regulations they are limited to those that are necessary to ensure a complete and thorough evaluation of any significant and adverse disproportionate impacts as a result of the facility.
7. Small Business and Local Government Participation:
The Department participated in outreach to the regulated community while developing these regulations, including the solicitation of comments from the energy industry. The only small businesses that may be impacted by these regulations are wind energy developers. The Department met with the Alliance for Clean Energy New York, Inc. (ACE NY) to discuss how these regulations may impact wind energy projects in New York and presented its proposed regulatory approach at ACE NY's Fall Conference on October 26, 2011 and encouraged comments and suggestions from conference participants.