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Revised Regulatory Flexibility Analysis for Small Businesses and Local Governments - 6 NYCRR Part 570

Liquefied Natural Gas

1. Effect of Rule

The LNG regulations will apply statewide except where new facilities are prohibited by law (currently in New York City). They provide opportunities for small businesses and local governments to construct and operate LNG facilities. The result will be to allow LNG to be stored and used across New York State (the State) at a time when economic conditions are creating significant demand for this alternative fuel. The primary anticipated uses of LNG are in the transportation sector (long-haul trucks) and as a source of heating fuel (space heating, steam production, and industrial uses). Construction and operation of new LNG facilities, without a permit provided by the revised proposed regulations, is prohibited under Environmental Conservation Law, Article 23, Title 17 (the LNG statute).

2. Compliance Requirements

The implementation of these regulations will not adversely affect small businesses or local governments since there are no substantive reporting or record keeping requirements for small businesses or local governments as a result of the proposed rule making. The reporting obligations contained in the regulations are derived from the LNG statute.

3. Professional Services

Professional services will be required by applicants to prepare applications for facility permits, design facility structures, ensure that all aspects of the facility are in compliance with applicable building, fire, and safety requirements, maintain the facility, and eventually close the facility. Through outreach efforts, the New York State Department of Environmental Conservation (DEC) will make information available on DEC's web site, including answers to questions about the new regulations. Future public workshops (meetings) are anticipated to be scheduled as needed.

4. Compliance Costs

Small businesses and local governments should not incur any additional costs, either initial capital costs or annual compliance costs to comply with the proposed rulemaking beyond what are required for obtaining a permit to construct/operate and normal business costs. It is estimated that the cost to obtain a permit under these regulations would be approximately $10,000 in addition to the cost to provide specialized training to local fire departments, if needed. Permit application fees would range between $100 and $1,000. In addition DEC is authorized to recover costs from the facility to implement the program. Facilities with more than 70,000 gallons capacity would not be allowed under the revised proposed regulations.

5. Economic and Technological Feasibility

The proposed rulemaking enacts into regulation State statutory requirements. It is expected to increase economic growth throughout the State. The proposed rulemaking causes no added economic burdens and requires no additional sophisticated environmental control technology, other than that which may be required by statute and for the facility to be in compliance with existing building and fire safety standards. Accordingly, implementation of these rules will be economically and technologically feasible for small businesses and local governments..

6. Minimizing Adverse Impact

It is DEC's belief that the proposed regulations will not cause a significant economic burden to the small business community or local governments. Promulgating regulations that will establish criteria for the siting and storage of LNG facilities will enhance the State's ability to attract the LNG industry and corporations to provide the public and business communities with an alternative (clean) fueling source. This will provide an economic growth opportunity for the State. In addition, LNG is a cleaner burning fuel, providing significant environmental benefits, and is less expensive than other fuels for uses such as space heating and steam production.

The revised proposed rulemaking does not place any additional burdens on the small business community or local governments or increase the universe of regulatory requirements applicable to the small business community or local governments beyond that which is required by the LNG statute.

Safe production, storage, utilization and transportation of LNG throughout the State will very likely produce substantial economic, environmental, and energy benefits for the entire State with the implementation of statutory requirements of the LNG statute via the promulgation of 6 NYCRR Part 570.

7. Small Business and Local Government Participation

DEC will continue to provide a statewide outreach program to regulated communities and interested parties, including small businesses and local governments. An invitation only Stakeholders Meeting was held on Wednesday, February 27, 2013 at the DEC office in Albany, New York. Persons invited to this meeting represented a broad cross section of industry representatives, public/environmental advocacy groups, utilities, and government personnel. Comments received were considered as the rulemaking documents were revised. DEC also made a presentation regarding the draft regulations at the May 22, 2013 "LNG-CNG-NGV Technical Conference," sponsored by the New York State Department of Public Service. The conference was attended by a variety of business representatives from large and small companies.

During the proposed rule making, outreach efforts included electronic mailings to environmental groups, statewide organizations, regulated community, and other interested parties, including small businesses and local governments. In October 2013, DEC held public meetings at two locations in the State and a public hearing in Albany. During the revised proposed rule making in November 2014, DEC received comments from the public during an additional 30-day public comment period and sent electronic mailings to environmental groups, statewide organizations, regulated community, and other interested parties. DEC also posted and will continue to post relevant information about the LNG regulations, as well as the permit application process, on its website. Future DEC outreach will include contacting fire emergency response personnel regarding their time associated with training for LNG facilities, and DEC will receive public comments on the revisions to the rule for a minimum of 30 days after publication of the Notice of Revised Rule Making.

Subdivision 570.2(h), Public Participation, states: "Any hearings, comments, or participation by federal, State or local government bodies or members of the public, relative to any permit proceedings, will be conducted in accordance with procedures established in Parts 621 and 624 of this Title." This subdivision ensures that any hearings in connection with LNG permit applications will be conducted close to locations where proposed LNG facilities will be sited in the State.

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