Mirant Bowline, LLC - Decision, March 19, 2002

Decision, March 19, 2002

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
625 Broadway
Albany, New York 12233-1010

In the Matter

- of -

Application for a State Pollutant Discharge Elimination System (SPDES) permit
pursuant to Environmental Conservation Law (ECL) Article 17 and Title 6 of
the Official Compilation of Codes, Rules and Regulations of
the State of New York (6 NYCRR) Parts 704 and 750 et seq.,
and Air Pollution Control permits consisting of a Preconstruction permit and a Certificate
to Operate, pursuant to ECL Article 19 and 6 NYCRR Parts 200 et seq.,

- by -

MIRANT BOWLINE, LLC,
[formerly Southern Energy Bowline, LLC],

DEC No. 3-3922-0003/00015

SPDES No. NY0264342

DECISION

March 19, 2002

DECISION OF THE COMMISSIONER

This Decision relates to the exceptions and replies filed on the DEC Recommended Decision ("RD") of Administrative Law Judge (ALJ) Kevin J. Casutto issued on November 30, 2001, regarding the application of Mirant Bowline, LLC, (the "Applicant" or "Mirant") for an Environmental Conservation Law ("ECL") Article 17, State Pollutant Discharge Elimination System ("SPDES") permit and air pollution control permits pursuant to ECL Article 19 and Parts 200 et seq. ALJ Casutto's RD pertaining to these permits was issued separately from the joint Recommended Decision ("Article X RD")of Presiding Examiner Gerald Lynch and Associate Examiner Casutto pertaining to matters addressed in the concurrent Public Service Law ("PSL") Article X proceeding. The Article X RD was also issued on November 30, 2001. Both the Department's proceeding regarding cooling technologies and the New York State Board on Electric Generation Siting and the Environment (the "Siting Board") proceeding regarding information pertinent to PSL Article X were held on a joint record.

Exceptions to the RD were filed on December 18, 2001, and replies were filed on December 28, 2001, and the Department's hearing record closed as of the latter date. Exceptions to the Article X RD pertaining to the matters before the Siting Board were filed on the same schedule.

Mirant was represented by the law firm of Couch White,LLP, Algrid White, Esq. and Barbara Brenner, Esq., of counsel. The Department Staff ("Staff") was represented by attorneys Meghan A. Purvee, Esq., and Richard Williams, Esq., and Riverkeeper, Inc., ("Riverkeeper") was represented by David K. Gordon, Esq., Staff Attorney. Scenic Hudson ("Scenic Hudson") was represented by the Pace Energy Project, Victor Tafur-Dominguez, Esq., of counsel.

Project Description

In August 2000, Mirant Bowline, LLC (formerly Southern Energy Bowline, LLC) applied for a Certificate of Environmental Compatibility and Public Need pursuant to PSL Article X⁽¹⁾ and Air Pollution Control and SPDES permits pursuant to Articles 19 and 17 of the ECL, to construct and operate a 750 megawatt ("MW") combined cycle electric generating facility. The facility would consist of three General Electric 7-FA combustion turbine generators ("CTG"), three heat recovery steam generators ("HRSG"), and one steam turbine generator ("STG"), with associated balance-of-plant systems and facilities. The primary fuel would be natural gas. Low sulfur (0.05%) fuel oil would be used for backup.

The Bowline Generating Station is located approximately thirty miles north of New York City in the Haverstraw Bay section of the Hudson River in the Town of Haverstraw, Rockland County, New York, on part of a 257-acre parcel owned by Mirant (the "site"). Two existing power plants, Bowline Units 1 and 2, are located on the site. Proposed Unit 3 would be located adjacent to Units 1 and 2 on a portion of the 257-acre site. The entire project area is zoned Planned Industrial Office. The project site is bounded on the east by Bowline Point Park and the Hudson River, on the west by a public park (Peck's Pond), on the south by combined residential and light industry properties, and on the north by Keahon Auto Wreckers. Also to the north are approximately 97 acres of vacant land which are part of the 257-acre Bowline Generating Station property. The cooling water intake structures ("CWISs") are proposed to be located in Bowline Pond, which is connected to the Hudson River along the west bank of the Hudson River. The N.Y.S. Department of State ("DOS"), with the assistance of the Department, has designated Haverstraw Bay a Significant Fish and Wildlife Habitat under the Coastal Zone Management Program ("CZMP"). Executive Law Article 42, 19 NYCRR Part 600, et seq. The CZMP classification of the Hudson River at Haverstraw (Town and Village) is Class SB, which designation provides that the best usage of such waters is recreation and fishing.⁽²⁾ The segment extends from the New York-Bronx county line, within the boundaries of New York State, to the Bear Mountain Bridge. See 6 NYCRR § 864.6 (Table I), Item No. 2, Hudson River (Official Notice herein taken).

Mirant's application for an Article X Certificate also included a request for a SPDES permit and Air Pollution Control permits (the environmental permits required pursuant to 6 NYCRR Parts 704, 750, 201 and 231). Mirant's initial application proposed that the facility would withdraw process water from Bowline Pond for cooling purposes, employing mechanical draft cooling technology requiring 7.5 million gallons per day (mgd). A portion of the cooling water would evaporate into the atmosphere, and the balance would be returned to the river. The proposed combined cycle generating technology allows a low intake velocity and limits intake capacity to the proposed maximum of 7.5 mgd.

The Staff reviewed Mirant's SPDES and Air permit applications, and subsequently developed draft SPDES and Air permits, dated January 16, 2001 (including a single draft permit dated January 16, 2001, captioned 'Air State Facility Permit' pursuant to 6 NYCRR Parts 201 and 231; hereinafter, the draft Air permit[s]).⁽³⁾ The draft SPDES permit authorizes the reuse of cooling water discharge from existing Bowline Units 1 and 2 as cooling water for Bowline Unit 3, annually from October through mid-February.

Subsequently, on February 13, 2001, Mirant revised its water intake and cooling proposal from a mechanical draft cooling system to a hybrid cooling system. As with the initial proposal, the intake structure would include a 2.0 millimeter ("mm") wedge wire screen and a Gunderboom^TM Marine/Aquatic Life Exclusion System ("Gunderboom MLES" or "Gunderboom") engineered geotextile porous curtain to provide a physical barrier between the CWISs and the aquatic biota of Bowline Pond for exclusion of aquatic biota. The Gunderboom curtain is comprised of three layers, two permeable polyester fabric layers with a mesh net layer in the middle. The curtain is suspended at the surface of the water body by vinyl-covered floatation billets.

Gunderboom, Inc., is the owner of the Gunderboom MLES proprietary fabric curtain technology. In recent years, Gunderboom, Inc. has been developing its Gunderboom product for CWISs applications, to minimize fish mortality. The Gunderboom textile curtain would be suspended from the existing intake structure pumphouse to the shoreline. Mirant has explained that the primary reason for revising the cooling/intake proposal is to reduce cooling tower steam plumes, thereby further reducing adverse visual impacts of the project. Consequently, the current draft SPDES permit, issued prior to Mirant's modification of cooling tower technology, does not address the proposed hybrid cooling system. Under both cooling water strategies, the proposed maximum water intake is 7.5 mgd gallons per day. Although the draft SPDES permit does not address the revised cooling technology and intake proposal, Mirant contends that its hybrid cooling with Gunderboom proposal will comply with all terms and conditions of the draft SPDES permit. DEC Staff agrees with this assessment.

Cooling Technology Issue

The central issue to be decided is whether the Applicant's proposed CWISs which would consist of hybrid cooling with a 2.0 mm wedge wire screen and attendant Gunderboom technology is the Best Technology Available ("BTA") as required by Clean Water Act ("CWA")§ 316(b) and 6 NYCRR § 704.5. Related issues examined in the adjudicatory hearing include whether dry cooling is the appropriate BTA for this project and whether or not use of the Gunderboom as part of an approved CWISs is premature and therefore unavailable.⁽⁴⁾

ALJ Recommendation

The ALJ recommended that dry cooling is BTA for the Bowline Unit CWISs, and that although Gunderboom is a promising technology, it is not proven and therefore is not available. RD at 11. The ALJ based this determination upon CWA § 316(b)and 6 NYCRR § 704.5. RD at 34, 46.

In reaching the above conclusions, the ALJ analyzed BTA for the proposed project in accordance with CWA § 316(b) and 6 NYCRR § 704.5, as applied in a previous decision of the Commissioner, Matter of Athens Generating Company, LP., June 2, 2001. RD at 17, 65. The ALJ specifically rejected a proposed approach to analyzing BTA as set forth in a DEC Staff attorney memorandum (Exhibit 144), finding the memorandum lacked the weight of formal agency guidance. RD at 15, 65-66. The ALJ did not consider the "Final BTA Rule" recently promulgated by USEPA, as further discussed below, in reaching his recommendations.

As part of his RD, the ALJ emphasized that a BTA analysis must begin with dry cooling, which he described as "the proven technology that minimizes adverse impacts of the CWISs, absent cost considerations...". RD at 17, 69. He also found that the record indicated that the Gunderboom technology had not sufficiently advanced since the Commissioner's determination in the Athens Interim Decision, and therefore it remains experimental and unavailable to be included as BTA for this project. RD at 23-24, 68.

Staff and Applicant Position

The Applicant and Staff contend, both at the adjudicatory hearing and on appeal, that the CWISs proposal of hybrid cooling with wedge wire and an attached Gunderboom is BTA for Bowline Unit 3. At the hearing, the Applicant and Staff argued that although dry cooling would result in lower aquatic impacts, the additional cost of dry cooling is unnecessary, since hybrid with the proposed impingement and entrainment reduction technologies would result in approximately equivalent protection of aquatic life. RD at 12. Additionally, both parties claim that Gunderboom is a proven technology and that the different circumstances and additional information available in this case, as compared to what was present in Athens, mandate a different result from Athens. Both Staff and the Applicant assert that studies of the Gunderboom's deployment are consistent with their position that the Gunderboom technology is sufficiently developed to be part of a BTA determination for the proposed project⁽⁵⁾. RD at 21-25.

The arguments advanced by the Applicant and Staff on appeal rely primarily on the Final BTA Rule to provide support for their position that the ALJ's recommendations should be rejected and the proposed Staff BTA determination upheld. Staff Exceptions Brief at 9; Applicant Exceptions Brief at 18. These parties maintain that since the proposed Bowline CWISs are subject to the Final BTA Rule and comply with performance criteria set forth in that rule, the Applicant's proposal should be approved consistent with the Final BTA Rule. Staff Exceptions Brief at 10-11; Applicant Exceptions Brief at 26-30. Further, the Applicant and Staff argue that the rejection of dry cooling as the standard to be followed for the Final BTA Rule, provides further support for their position and undermines the ALJ's determination. Staff Exceptions Brief at 22; Applicant Exceptions Brief at 25.

On appeal, Staff and the Applicant continue to maintain that the Commissioner's decision in Athens does not require a finding that the Gunderboom is experimental, and that based upon the facts in this record, the Gunderboom is a proven, available technology. See generally, Staff Exceptions Brief at 23-30, 32-51; Applicant Exceptions Brief at 34-80. Additionally, both parties contend that the Final BTA Rule supports their determination that the Gunderboom is an available technology. Staff Exceptions Brief at 30-32; Applicant Exceptions Brief at 35-36.

Joint Intervenors' Position

Riverkeeper and Scenic Hudson (together, the "Joint Intervenors")argued at the hearing, and in their appeal, that in New York, dry cooling technology is BTA for this site and that Gunderboom is not available for the proposed Bowline Unit 3 project. The Joint Intervenors claim that capacity is the primary or most important factor in a BTA determination, since historically fish mortality is directly proportional to water withdrawn from a water body. Thus, these parties assert that dry cooling is BTA because it uses substantially less water compared to other technologies. RD at 19. The Joint Intervenors draw far different conclusions with respect to the studies of the effectiveness of the Gunderboom, and based upon those conclusions, they argue that the Gunderboom is experimental, and as such, unavailable to be part of the CWISs for this site. RD at 25-27.

On appeal, the Joint Intervenors differ from Staff and Applicant in their interpretation of the impact of the Final BTA Rule on the cooling technology issue presented here. The Joint Intervenors argue that the Final BTA Rule, to the extent it is applicable, imposes minimum national standards. Under the Rule, states are authorized to impose more stringent conditions as necessary under the circumstances, in order to protect state water quality standards. Scenic Hudson Reply Brief at 4; Riverkeeper Reply Brief at 2-5. They argue that the RD should be adopted to impose these higher standards to protect the State's water resources. Scenic Hudson Reply Brief at 4; Riverkeeper Reply Brief at 8-9. Finally, the Joint Intervenors continue to contend, as they did at the hearing, that the Gunderboom is not reliable and cannot be deemed BTA for this project. Scenic Hudson Reply Brief at 4; Riverkeeper Reply Brief at 9-19.

Discussion

As will be addressed below, a review of the record reveals a need to provide further direction on the topic of BTA. This Decision reverses the recommendation of the ALJ with respect to that portion of the Recommended Decision that rejected the Gunderboom as a technology available to meet BTA requirements at Bowline. I do not agree with the ALJ's finding that the Gunderboom is a technology that is experimental, and thus, unavailable to be considered as part of a BTA determination. Accordingly, my analysis adjusts the weight of the record evidence and references factual findings and conclusions presented in the RD to articulate more clearly the rationale for my decision that the Applicant's hybrid cooling/Gunderboom proposal is BTA at Bowline.

The Final BTA Rule

A new rule implementing Section 316(b) of the Clean Water Act was published in the Federal Register on December 18, 2001.⁽⁶⁾ See National Pollutant Discharge Elimination System: Regulations Addressing Cooling Water Intake Structures for New Facilities, 66 Fed. Reg. 65256 (Dec. 18, 2001) (to be codified at 40 CFR Parts 9, 122, 123, 124 and 125) ("Rule" or "Final BTA Rule"). Once the Rule became effective on January 17, 2002, it set minimal Federal standards for implementing CWA § 316(b). The Federal regulations apply to "new facilities" which are those meeting certain criteria set forth in the regulations and for which construction commences after the effective date of the Rule. See USEPA Rule at 65256 - 65259, § 125.80, § 125.81 and § 125.83.

The parties dispute the application of the Rule to the proposed Bowline Unit 3 project. Staff contends that the Rule is effective as of January 17, 2002 and applies to the proposed Bowline project. Staff Exceptions Brief at 9, 11. The Applicant agrees with Staff with respect to the applicability of the Rule and asserts that Bowline Unit 3 is a "new facility" within the meaning of the Rule. Applicant Exceptions Brief at 17. Scenic Hudson argues that the Rule is not applicable since the Bowline permit application was submitted prior to the effective date of the Rule. They also argue that issues with respect to the applicability of the Rule should not be decided by the Commissioner without staff first making their determinations with respect to the applicability of the Rule in a forum where parties have an opportunity to contest those determinations. Scenic Hudson Reply Brief at 8-19.

For purposes of this Decision, I find that although the terms set forth in the Final BTA Rule are applicable to this project, I do not base my decision with respect to the appropriate BTA determination solely upon the provisions set forth in the Final BTA Rule. Instead, I note that my decision is consistent with the provisions set forth in the Final BTA Rule, including the authority verified therein which allows States to impose more stringent standards with respect to the issuance of CWA § 316(b) permits.⁽⁷⁾ See CWA §§ 301, 401, 402(b) and 510; USEPA Rule § 125.80(d) and § 125.84(e); see also, USEPA Rule at 65321. Thus, my decision relies upon both federal and independent State authority in reaching the BTA determination for the proposed project.

Federal and State CWISs Requirements

Section 316(b)of the CWA establishes the standard for determining the BTA for cooling water intake structures:

Any standard established pursuant to section 1311 [CWA § 301] . . . or section 1316 [CWA § 306] . . . and applicable to a point source shall require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. 33 U.S.C. § 1326(b), CWA § 316(b).

6 NYCRR § 704.5,in accordance with the authority set forth in ECL § 15-0301 and § 17-0301, contains the analogous New York State provision:

The location, design, construction and capacity of cooling water intake structures shall reflect the best technology available for minimizing adverse environmental impact.

The requirements under Section 316(b) are implemented in New York as permit conditions to a SPDES permit to ensure environmental compliance. The federal requirements have been the subject of many judicial interpretations, and now USEPA has further defined this section through the newly promulgated Final BTA Rule. The analogous State regulatory language has not been reviewed by the courts, nor is there any guidance interpreting these provisions.⁽⁸⁾ However, the language in this regulation was the basis, in part, for the Commissioner's determination in the Athens Interim Decision. See Athens at 7,10.

The Athens Decision

The Commissioner's Interim Decision in the Matter of Athens Generating Company, LP.,supra, is the most recent Department pronouncement on the factors to be considered in determining what cooling technology constitutes BTA for a particular project site. Since the Athens decision was the subject of much analysis and debate in the present case, I will address a few critical holdings from that decision.

In Athens, the Commissioner, in reviewing a SPDES permit application for an electric generating facility, determined that dry cooling technology was BTA for the Athens project. The Commissioner specifically rejected the ALJ's recommendation of hybrid cooling with Gunderboom technology as BTA for that site. However, the Commissioner also rejected the notion that dry cooling is the only acceptable BTA cooling technology, finding that:

Further, the Commissioner advised that:

Upon a careful review of the administrative record, I find that the application of dry cooling technology for this project meets the standards articulated under CWA § 316(b) and 6 NYCRR § 704.5. Dry cooling is preferable here for reasons directly related to § 316(b). I render this conclusion with the caveat that given the application-specific nature of a § 316(b) determination, my finding should not be construed to mean that hybrid cooling with a Gunderboom could not constitute BTA elsewhere at another location with a different set of facts. Athens at 12.

Thus, the Commissioner's decision in Athens stands for the proposition that BTA determinations in New York are to be made on a case by case, site specific basis. The promulgation of the Final BTA Rule has not undermined the ability of the Department to continue to make such determinations on a site specific basis, even though the Final BTA Rule is largely based upon technology-driven performance standards with consideration of site specific circumstances. See USEPA Rule at 65340-65341, § 125.84(b)(4). Both the new Rule itself, and the independent authority provided in our State law and regulations, allow New York State to continue to make BTA determinations on a case by case basis. USEPA Rule at 65340-65341, § 125.84(e); 6 NYCRR § 704.5; 6 NYCRR § 754.1.

In addition to establishing that BTA determinations in New York were to be conducted on a site specific basis, the Athens decision also set forth a precedent in New York for the steps to be employed in arriving at a BTA determination. The four step analysis included reviewing: "(1)whether the facility's cooling water intake structure may result in adverse environmental impact; (2)if so, whether the 'location, design, construction and capacity of the cooling water intake structure reflects best technology available for minimizing adverse environmental impact'; (3)whether practicable alternate technologies are available to minimize the adverse environmental effects; and (4)whether the costs of practicable technologies are wholly disproportionate to the environmental benefits conferred by such measures." Athens at 9. These steps were taken from a BTA analysis adopted in a federal case implementing the requirements of CWA §316(b). See In re Brunswick Steam Electric Plant, Region 4, EPA (Nov. 7, 1977).

Finally, in Athens, the Commissioner reviewed the potential effectiveness of the Gunderboom as an aquatic biota exclusion technology. Since the Gunderboom technology proposed in Athens is similar to what has been proposed by the Applicant for the Bowline project, I will address the Commissioner's Athens determinations with respect to the Gunderboom, as I review the present record on Gunderboom, as set forth below.

Efficacy of the Gunderboom Technology

The Athens decision, in considering the use of hybrid cooling with Gunderboom technology, found that the record contained "...insufficient evidence in this administrative record to conclude that the Gunderboom technology is suitable for this project at this location." Athens at 11. Accordingly, the Commissioner articulated the basis for his determination of the status of the Gunderboom in that proceeding as follows:

...an examination of the record and the draft SPDES permit indicates that there is an abundance of information regarding deployment of the Gunderboom still needed from Athens Generating for consideration by the Department. Such information includes, inter alia, assorted drawings and schematics of the Gunderboom configuration and the facilities and structures to be installed as part of the Gunderboom system, descriptions of how deployment of the Gunderboom would take place, descriptions of the maintenance and support systems, a contingency plan in the event of failure and biological monitoring programs.

Athens at 11. The foregoing language indicates that any such determination was inconclusive due to the lack of information provided, and because the record evidence on the Gunderboom consisted of a "...concept design for a Gunderboom installation" (emphasis added). Id.

Based upon the Athens decision, the ALJ determined in his Bowline RD that the Gunderboom technology was "experimental". RD at 22, 24, 27 and 33. Accordingly, the ALJ held that the Gunderboom technology is premature or unavailable to be designated as part of a BTA determination for new facilities, including the Bowline facility. RD at 33-35. Having concluded the Gunderboom technology in Athens was premature or experimental, the ALJ then applied the record information in Bowline to illustrate the immaturity of the technology, namely: 1) the Gunderboom deployed at the Lovett electrical generation facility since 1999 has not been declared BTA for that site and therefore cannot be considered BTA; 2) the Gunderboom deployment at Bowline would require a three-year startup period, further underscoring the experimental nature of the system; 3) the 1999 and 2000 impingement tests demonstrate the early development stages of the Gunderboom proposed to be used at Bowline, and 4) the physical make up of the Gunderboom exclusion fabric proposed to be used at Bowline remains untested. See generally RD at 20-35.

Notably, however, the Athens determination never held that the Gunderboom was "experimental". That term is not used in the Commissioner's Interim Decision. Instead, the Commissioner held that hybrid cooling with Gunderboom was a technology that was a 'bit premature', based upon the record before the Commissioner in that case. Athens at 11. Thus, a plain reading of the Athens decision leads to a conclusion that the Gunderboom technology, as proposed on that record, was conceptual in nature. In fact the Commissioner, in the Athens decision, emphasized that his finding "should not be construed to mean that hybrid cooling with a Gunderboom could not constitute BTA elsewhere at another location with a different set of facts." Athens at 12.

Unlike the record in Athens, the record in Bowline provides detailed information to determine whether or not the hybrid cooling/Gunderboom proposal is BTA for the proposed Bowline project. I cannot adopt the ALJ's characterization of the technology as "experimental" in absolute terms, based upon his interpretation of record evidence, so as to eliminate it from consideration as BTA at the Bowline site or under site specific applications elsewhere. Accordingly, here, as in Athens, hybrid cooling with Gunderboom is not eliminated from any BTA analysis based upon the rationale that it is experimental, and therefore, unavailable. Site specific and project factors can support the conclusion that hybrid cooling with Gunderboom is BTA at a particular site, and not other competing BTA technologies.⁽⁹⁾

My determination that the Gunderboom is a technology available to be designated as part of a BTA determination for CWISs is consistent with USEPA's position in its promulgation of the Final BTA Rule. USEPA reviewed information regarding the efficacy of the Gunderboom technology and concluded that it held promise, even though it was experimental in nature for new facilities. See Technical Development Document for the Final Regulations Addressing Cooling Water Intake Structures for New Facilities, USEPA, Office of Water, EPA-821-R-01-036, November 9, 2001 ("TDD"), 5.5.5 Aquatic Microfiltration Barriers at 5-9 to 5-10. Importantly, the final Rule allows deployment of emerging or experimental technologies as BTA, subject to continued evaluation, and does not exclude the use of such technologies. See generally TDD; USEPA Rule at 65278-65280; Id. at 65340-65341, §125.84.

The Bowline RD rejects the concept of employing technologies that would undergo further evaluation before being determined to be BTA. In the ALJ's view, any technology that is considered experimental exceeds the statutory language of CWA §316(b). I disagree. Rather, Section 316(b) and 6 NYCRR 704.5 must be read more broadly to embrace technologies that can advance environmental protection and harmonize site specific factors. The new Rule clearly is in accord with such an approach.

Within the context of the Bowline 3 hearing record, the evidence of the Gunderboom technology's efficacy are largely dependent on the studies and conclusions developed from the existing Lovett Station deployment of the Gunderboom located three miles north of Bowline 3 on the Hudson River.⁽¹⁰⁾ The existing Lovett electrical generating facility is a once-through cooling facility. The Gunderboom without hybrid cooling technology was deployed at that site as a demonstration project commencing in 1994. Deployment of the Gunderboom at Lovett does not reduce the water intake capacity to the facility, as would be the case with hybrid cooling, but only provides a micro fabric filter technology to reduce entrainment and impingement to protect aquatic organisms.

The record evidence demonstrates, as briefly set forth below, that the information gleaned from the Lovett studies is in fact, reasonably reliable and is arguably beyond the demonstration phase since its initial deployment. This determination is completely consistent with the Commissioner's decision in Athens, which indicated that the 1999 Lovett studies demonstrated that the deployment of the Gunderboom was a success. Athens at 10. This result is also consistent with USEPA's reliance on the Lovett studies, in adopting the Final BTA Rule, to show that the Gunderboom is an effective technology. USEPA Rule at 65279-65280.

That record evidence indicates that the effectiveness of the Gunderboom demonstrated an exclusion rate between 80 percent to 91 percent in the Lovett studies. (The 1995 Lovett study exhibited an exclusion rate of roughly 91 percent over the test period. Exhibit 146, Table 5-9; the 1998 Lovett study achieved at least an 80 percent exclusion rate without any maintenance. Exhibit 147 at 1; and the 2000 Lovett study resulted in an 82 percent exclusion rate. Exhibit 115.) The record also indicates various system improvements had been made to the Gunderboom deployment as issues arose. For example, when the Gunderboom fabric filter became clogged with sedimentation, thereby decreasing its effectiveness, a manual AirBurst Cleaning System was installed to free the clogged filter. RD at 22. In 1997, another refinement in the form of an anchoring system was installed to maintain the position of the boom around the Lovett cooling water intake structure in an effort to ensure continued operational capability. Pre-filed testimony of DEC Biologist Ed Radle at 9. In 1998, a further refinement of the two-ply fabric was installed to maintain the proper function of the filter barrier. Id. 9-10. These system advances or adjustments, when viewed overall and in conjunction with the various test results, do not compel a conclusion that the technology is unproven. Rather, the system advances made over the study period refined the effectiveness of the technology since its first deployment.

Other evidence in the record also supports a conclusion that the Gunderboom is an available technology for BTA determinations. In particular, the American Shad Impingement Study undertaken in 2001 by Staff, supports this determination. In that study, a DEC biologist conducted experiments of the mortality of American shad eggs as a result of impingement on a panel of Gunderboom fabric. The results of this study indicated that any mortalities were "reflective of the natural random mortality that occurs independent of the test conditions", and these results were uncontroverted in the record. RD at 28, 56. In fact, the ALJ found that this study supported a conclusion that "adverse impacts of the Gunderboom related to impingement mortality would be de minimis". RD at 28, 67.

Finally, the studies relied on by the ALJ and the Joint Intervenors to contest the effectiveness of the Gunderboom do not require a different result.⁽¹¹⁾ In fact, the ALJ recognized that these studies were susceptible to criticism. RD at 30. For example, the study conducted by Riverkeeper did not include the "air-burst" feature, which is considered to be an essential advancement of the Gunderboom that is proposed to be deployed in Bowline. Further, in spite of the problems suggested by these studies, they indicate that the Gunderboom would continue to function effectively so as to meet the water supply needs of Bowline Unit 3. RD at 29; Applicant Exceptions Brief at 68-71.

Therefore, based on the foregoing, I draw different conclusions than the ALJ from the record evidence regarding the effectiveness of the Gunderboom.⁽¹²⁾ Instead, I find that the evidence supports a conclusion suggesting the competency of the Gunderboom technology to be employed as part of CWISs on a site specific, case by case basis.

BTA for Bowline Unit 3

The ALJ, in determining that dry cooling was BTA for Bowline Unit 3, concluded that a BTA analysis must commence with dry cooling since, "...at present dry cooling technology is undisputedly the available technology that presumptively minimizes fish mortality by reducing the water intake requirements (capacity)". RD at 17. In reaching this conclusion, the ALJ relied upon the BTA analysis adopted by the Commissioner in the Athens decision. RD at 11. Notwithstanding the ALJ's unnecessary emphasis on dry cooling as the starting point for such an analysis, I concur that the BTA analysis utilized by the ALJ was the appropriate method for making such a determination for the Bowline facility. However, since I find that the Gunderboom is an available technology to be employed at this site to meet BTA requirements, the ALJ's dry cooling BTA recommendation for Bowline Unit 3 must be rejected and his findings adjusted accordingly.⁽¹³⁾

Initially, it is important to note that in reviewing the approach undertaken by Staff in conducting its BTA analysis for the Bowline project, it was clearly appropriate for Staff to have reviewed a variety of proposed CWIS technologies. As recognized in Athens, "...it is incumbent on the permit writer to make that [BTA] determination on a case by case basis". Athens at 9. The position advocated by the ALJ could be interpreted to require a BTA analysis to begin and end with dry cooling in every instance. This approach is not sufficiently flexible to allow staff to judge the relevant benefits of technologies proposed by applicants for a particular site, and does not allow for advances in the protection afforded by emerging technologies.

In the present case, it is undisputed that the proposed CWISs in Bowline Pond will result in adverse environmental impacts, "specifically fish mortalities". RD at 18. Thus, in applying the BTA analysis adopted in Athens to the Bowline site, it was incumbent on Staff to conduct its analysis in such a way as to find the best technology available to protect these aquatic resources. Staff, in exercising its best professional judgment, did conduct its BTA analysis for the Bowline facility generally in accordance with the analysis adopted by the Commissioner in

Athens.⁽¹⁴⁾ Staff reviewed the cooling technology proposed by the Applicant, as well as other feasible technologies, including dry cooling.⁽¹⁵⁾ Staff Exceptions Brief at 57. Staff concluded that the protection afforded to aquatic resources by dry cooling was "approximately equivalent" to the protection afforded by hybrid cooling with a 2.0 mm wedge wire screen and Gunderboom. RD at 12. Staff further found that the incremental added cost of dry cooling did not justify the minimal environmental benefits to be gained. Id. Thus, Staff concluded that the hybrid cooling/Gunderboom proposal was BTA.

The ALJ concurs with Staff's determination that hybrid cooling with a wedge wire and Gunderboom is BTA for this project, assuming that the Gunderboom is an available BTA technology.⁽¹⁶⁾ Although the ALJ stated that historically, capacity is the most important predictor of fish mortality, and dry cooling is generally most effective in minimizing capacity, the ALJ agreed that the Gunderboom has the potential to alter that relationship, if it is found to be a proven technology. RD at 19. The ALJ also agreed that based upon the record before him, "Mirant's hybrid cooling alternative is approximately equivalent to the level of protection provided by use of dry cooling..." ⁽¹⁷⁾ The principal reason the ALJ recommended dry cooling as BTA was based upon his rejection of the Gunderboom as an available, proven BTA technology. Further, the main rationale stated by the ALJ for determining that the Gunderboom was not available was attributed to the failure of Staff to declare the Gunderboom as BTA at Lovett or to include it as a technology in any BTA determination for projects other than Bowline.⁽¹⁸⁾

However, subsequent to the issuance of the RD, the availability of the Gunderboom to be accepted as part of a BTA determination was established by Staff's decision with respect to the CWISs for the Bethlehem Energy Center facility ("BEC").⁽¹⁹⁾ In BEC, Staff found that hybrid cooling with a Gunderboom was an appropriate BTA for a modification to an existing facility on the Hudson River.⁽²⁰⁾

Based upon the overwhelming net environmental benefit provided by the retirement of the existing Albany Steam Station, a once-through cooling plant, Staff determined that hybrid cooling with a Gunderboom was an appropriate BTA based upon that application. In Bowline, the ALJ, was not able to comment on the relevance of this BTA determination at the time he made his Recommended Decision.

Other than the availability of the Gunderboom, the only other significant issue raised by the ALJ with respect to his dry cooling recommendation, are concerns that Bowline Pond is not an appropriate location for the proposed hybrid/Gunderboom CWISs. RD 35-39. However, as the ALJ noted, any proposal for a CWIS would be located in Bowline Pond, as there is no other reasonable location. Id. at 36, 37. Further, his concerns were based largely upon a USEPA 1976 Development Document, the relevance of which is doubtful in light of the new Rule. Id. at 35. The new Rule does not specifically address the location recommendations set forth in the 1976 document and provides minimal guidance on the location factor, stating that "...the optimal design requirement for location is to ...locate intakes away from areas with the potential for high productivity". USEPA Rule at 65276. Since both the ALJ and Staff agreed that Bowline Pond is not a high productivity area, concerns with respect to location of the intake based on federal guidance are no longer an issue.⁽²¹⁾ Finally, any concerns raised by the ALJ with respect to biofouling, are effectively answered by the ALJ's acknowledgment that "Mirant and DEC Staff persuasively refute the Joint Intervenors' assertion that biological growth on the Gunderboom will continue unabated..." RD at 30. See also note 11. The only remaining issue with respect to location of a Gunderboom in Bowline Pond, the potential increase in entrainment and impingement losses at Units 1 and 2 by operation of the Gunderboom, does not require resolution by the adoption of a particular technology, and will be addressed below.

Based upon the foregoing, I conclude that the location, design, construction and capacity of hybrid cooling with the 2.0 wedge wire screen and Gunderboom CWISs at Bowline reflects the best technology available for minimizing adverse environmental impacts at this site in accordance with CWA § 316(b)and 6 NYCRR § 704.5. This conclusion is consistent with the extensive discussion on the capacity and design factors set forth above, as well as the fact that neither Staff nor the ALJ found that there were any issues with respect to the "construction" BTA factor. RD at 39. Finally, both Staff and the ALJ agreed that the costs of the proposed addition of a Gunderboom versus hybrid cooling with only a wedge wire screen were not wholly disproportionate to any environmental benefits gained. Id. at 12.

However, in making my determination, I find that, the draft SPDES permit must be modified to ensure compliance with the new Rule and with State water quality standards as authorized by the new Rule.⁽²²⁾ There is nothing in the record to allay concerns of the potential operation of the Gunderboom to actually increase the impingement and entrainment of aquatic life by Bowline Units 1 and 2, due to the close proximity of the intakes to the proposed Unit 3 intake. RD at 37. Given the significant aquatic impacts presently caused by the operation of Units 1 and 2, I direct Staff to incorporate conditions in the final SPDES permit for this project, to monitor the operation of the Gunderboom for any such occurrence and to ensure that any such increase in mortalities discovered is eliminated in an expedient manner.

Based upon this record and the incorporation of the aforementioned permit conditions, I find that there are no existing factors which would justify the added costs of dry cooling at this site, for this project I note that the water resource in the vicinity of the plant is not impaired. See note 2, infra. Additionally, the aquatic habitat, although sensitive, will be protected based upon the location of the intake, and given the predicted protection of aquatic resources by the hybrid/Gunderboom CWISs. Further, an "impairment test" conducted by DEC on behalf of the New York State Department of State ("DOS")for significant habitats indicated that the Applicant's proposed CWISs in Bowline Pond will be consistent with DOS policies and will not "significantly impair the viability of the habitat".⁽²³⁾

However, my decision that hybrid cooling with a wedge wire screen and Gunderboom is BTA for this project should not be interpreted to mean that dry cooling can never be BTA. Regardless of the general rejection of dry cooling by the USEPA, each case must stand on its own merits, with the ultimate question to be decided for the project under consideration, what technology minimizes environmental impacts, as required by the BTA principles adopted here and as set forth in Athens.⁽²⁵⁾

In fact, although the Rule adopted by USEPA rejected dry cooling as a uniform BTA standard, it rejected it only as a "...nationally applicable minimum in all cases". (emphasis added) USEPA Rule at 65282-65284. It is clear that one of the major concerns expressed by the USEPA, in rejecting dry cooling as a nationwide standard, involved the reduced energy efficiency of such systems in warmer climates. TDD, 4 Dry Cooling at 4-13, USEPA Rule at 65283. In fact the Rule recognizes that dry cooling is more often and more suitably utilized in the northern United States. Id.

USEPA, in promulgating the Rule, also specifically recognized that there would be circumstances under which dry cooling may in fact be the preferable technology to be employed.

...EPA does not intend to restrict the use of dry cooling or to dispute that dry cooling may be the appropriate cooling technology for some facilities. This could be the case in areas with limited water available for cooling or waterbodies with extremely sensitive biological resources (e.g., endangered species, specially protected areas).

USEPA Rule at 65282. The Preamble to the Rule also identifies several additional concerns related to the environmental impacts associated with cooling water intake structures. Those, other concerns include "...the cumulative overall degradation of the aquatic environment as a consequence of (1) multiple intake structures operating in the same watershed or in the same or nearby reaches and (2) intakes located within or adjacent to an impaired waterbody."⁽²⁶⁾ USEPA Rule at 65263.

In part to address these impacts on a local level, the USEPA specifically recognized the rights of the States to require more stringent BTA requirements than the closed-cycle recirculating cooling water systems which were adopted as the national standard for CWISs. ⁽²⁷⁾

...the final rule recognizes that a State may, under sections 401 or 510 of the CWA, ensure the inclusion of any more stringent requirements relating to the location, design, construction, and capacity of a cooling water intake structure at a new facility that are necessary to ensure attainment of water quality standards, including designated uses, criteria, and antidegradation requirements.

USEPA Rule at 65277. See also USEPA Rule at 65338, § 125.80(d); 65331;65290. The rights of states to adopt more stringent rules than USEPA has also been consistently recognized by the courts. See, e.g., Riverkeeper Reply Brief at 2-4.

To enable states to require more stringent provisions in applicable permits, the Rule sets forth the following requirement to be included as part of either of the two primary options that are available to comply with the Final BTA Rule as follows:

(e)You [Permit applicants] must comply with any more stringent requirements relating to the location, design, construction, and capacity of a cooling water intake structure or monitoring requirements at a new facility that the Director deems are reasonably necessary to comply with any provision of state law, including compliance with applicable state water quality standards (including designated uses, criteria, and antidegradation requirements).

USEPA Rule at 65340-65341, § 125.84. Additionally, the alternative requirements authorized by the Rule in Section 125.85 also set forth a requirement to comply with state law. USEPA Rule at 65341, § 125.85.

Thus, based upon the recognition of the authority of States to protect their water resources, the Final BTA Rule does not restrict New York from adopting dry cooling, or any other technology or requirement in conducting its BTA analysis for a proposed project, as long as the protection afforded aquatic resources is consistent with or more stringent than what is required by the new Rule. For purposes of review of this permit application, BTA analysis, in New York remains a site specific application consistent with the policies underlying the determination in Athens and in the adoption of the new Rule by USEPA. Such an approach is necessary to ensure that New York water resources are adequately protected in accordance with the state water quality standards set forth in 6 NYCRR § 704.5.

Miscellaneous

Staff filed a motion to strike certain information contained in the Riverkeeper's brief, claiming the information was non-record evidence. The contested language in the Riverkeeper's brief was not relied upon in this Decision hence the matter is moot.

I have reviewed the remaining matters addressed in the briefs on exception and the reply briefs to the RD and find no reason to further adjust the ALJ's findings on these other matters.

Conclusion

Pursuant to applicable regulatory and statutory criteria, my review of the record before the ALJ and the conclusions reached on each of the substantive topics addressed above, leads to a conclusion that no further review is necessary to render a final decision. All record information regarding the SPDES matter, and the incorporation by reference of the Article X record for completeness, sufficiently meets the applicable requirements for final decision making. I find the SPDES permit can be issued after Staff's revisions of it consistent with my Decision herein and in accordance with Staff's recommendations with respect to the monitoring and record keeping requirements provided by the new Rule. Accordingly, I direct Staff to modify the draft SPDES permit consistent with this Decision and to issue the SPDES permit.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
By: Erin M. Crotty, Commissioner

Dated: Albany, New York
March 19, 2002

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

² 6 NYCRR § 701.11. Class SB saline surface waters are also suitable for fish propagation and survival. Class SB is the second highest rating of saline surface waters.

³ A draft Prevention of Significant Deterioration (PSD) permit dated November 13, 2000 was the subject of public notice in local newspapers during the week of November 13, 2000.

⁴ An additional issue was raised with respect to the reuse of the cooling water discharged from Bowline Units 1 and 2 to cool Bowline Unit 3. This issue was resolved by the parties, and, as such, the ALJ did not make a recommendation with respect to this issue. I note that the proposed resolution of allowing the reuse of such water whenever it is available throughout the year, rather that only from October to mid-February, is consistent with the new regulations on BTA promulated by the federal government and discussed in the next section of this Decision.

⁵ Much of the dispute with respect to the effectiveness of the Gunderboom involves various interpretations of the studies of the efficacy of this technology both prior to Mirant's permit application and as a result of it. The relative merits of the parties' arguments will be discussed in a subsequent section of this Decision.

⁶ December 18, 2001 also was the date for exceptions to be filed on the DEC RD. In view of the filing of the new Rule, the ALJ authorized the parties to address the implications of the new Rule on the proposed project in their reply briefs on exception for the Commissioner's consideration. The parties' briefs on exception included references and interpretations of the new Rule, as did the reply briefs filed on the RD.

⁷ The CWISs proposed by the Applicant have been determined by Staff to comply with the minimum requirements set forth in the new Rule. No party has presented any credible arguments to dispute this finding. However, in arriving at my determination with respect to the appropriate BTA for this facility, I also rely upon the independent authority set forth in New York's laws and regulations to protect the aquatic resources at this site.

⁸ I agree with the finding of the ALJ in Conclusion of Law 13 that Exhibit 144, which is a 1992 DEC Office of General Counsel memorandum containing advise on how a BTA analysis should be conducted, is not a formal guidance document entitled to the weight generally accorded to such documents.

⁹ The Bethlehem Energy Center facility, to be constructed and operated by PSEG Power New York, Inc. pursuant to a Certificate of Environmental Compatibility and Public Need granted by the New York State Board on Electric Generation Siting and the Environment on February 28, 2002, will utilize a Gunderboom, in addition to hybrid cooling, to reduce adverse impacts on aquatic life pursuant to a SPDES permit issued by the Department on February 13, 2002. This project is discussed in greater detail later herein.

¹⁰ Based upon the record before me, and the effective arguments of Staff, I am not persuaded that any dispute with respect to the fabric to be utilized on the Gunderboom is of any significance in determining the availability of the Gunderboom. Staff Exceptions Brief at 40-43. See also note 11; RD at 30-33. However, I do agree with the ALJ that the language in the draft permit is imprecise and I direct Staff to better define the maximum perforation size of the fabric for the Bowline project. RD at 33.

¹¹ Riverkeeper conducted a 29 day study in the summer of 2001 to examine biofouling on the Gunderboom. See Gunderboom Fouling Studies in Bowline Pond, Exhibit 151. "Biofouling" (colonization of aquatic organisms on material in a estuarine environment) can limit the ability of the Gunderboom to filter water effectively. The Applicant also conducted a study to test for different flow rates on the Gunderboom. However, as neither study was conducted on a fully deployed Gunderboom, but rather were tests of short duration conducted on samples of the Gunderboom fabric, these studies should properly be accorded less weight than the real life, full scale deployment of the Gunderboom at Lovett conducted over the course of several years.

¹² In addition to the studies on the effectiveness of the Gunderboom, the ALJ primarily relied on the failure to declare the Gunderboom BTA at Lovett as a factor tending to demonstrate that the Gunderboom technology was unavailable as BTA. RD at 33-34.

¹³ This Decision rejects the ALJ's recommendation that dry cooling is BTA at Bowline. However, the ALJ specifically recognized, that if I were to reach a different conclusion on the availability of the Gunderboom for BTA determinations, his analysis would support a decision by me that the Applicant's hybrid cooling/Gunderboom proposal was BTA at Bowline. See RD at 45 ("Assuming, arguendo, that the Gunderboom technology is an available (proven) technology for the Bowline Unit 3 project site..., the Commissioner should conclude that the DEC Staff's determination is correct, that Mirant's proposal provides approximately equivalent mitigation of aquatic adverse impacts as dry cooling technology...").

¹⁴ I recognize that Staff based its BTA decision, in part, on other potential adverse impacts of dry cooling. However, I find that in accordance with the Commissioner's determination in Athens, the impacts to be minimized by the BTA standard relate to potential water quality and aquatic resources. See Athens at 12, note 8. Additionally, I note that Staff's reliance on Exhibit 144, (see note 8) to the extent it varies with the BTA analysis specifically set forth in Athens, is hereby rejected. Based upon the record in this case, it was unnecessary to look at other BTA options with lower economic costs after determining that two options (dry cooling and hybrid/Gunderboom) provided equal protection for aquatic resources. Staff was then within its authority to adopt the technology which presented a lower cost for the Applicant.

¹⁵ Although no other party conducted a BTA analysis for the Project (RD at 9), the BTA analyses conducted by Staff and the ALJ provide a sufficient basis upon which to rest my BTA determination for this project. Further, although the ALJ recommended dry cooling as BTA for Bowline, the ALJ, in his RD, conducted a thorough BTA analysis ("assuming arguendo, that the Gunderboom technology [was] not experimental"), for the purpose of developing a full record. RD at 35.

¹⁶ See note 13, herein.

¹⁷ RD at 62, Finding of Fact 113. The ALJ also found in Finding of Fact 43 that the "difference between entrainment of a dry cooling intake (with 2.0 mm wedge wire screen) versus a hybrid cooling intake (with 2.0 mm wedge wire screen but without the Gunderboom) is less than 1%."

¹⁸ RD at 34. The ALJ stated that "...the Gunderboom MLES component of the proposed CWIS is an exclusion technology still under development at Mirant's Lovett generation site. The Lovett Gunderboom technology has not yet been determined to comprise BTA for the CWISs at that site. ... No CWIS Gunderboom project exists or has been designated BTA. These facts also indicate that Gunderboom technology for CWIS fish exclusion remains an experimental technology." See also, id. at 33 . The other proposed components of the CWISs, hybrid cooling and a 2.0 mm wedge wire screen, were not found to be unavailable by the ALJ. See, id. at 34.

¹⁹ See note 9 herein.

²⁰ See generally Department of Public Service Case 97-F-2162 - Application by PSEG Power New York, Inc. for a Certificate of Environmental Compatibility and Public Need to Construct and Operate a 750 Megawatt Natural Gas-Fired Combined Cycle, Combustion Turbine Generating Facility in the Town of Bethlehem, Albany County, Article X Recommended Decision at 12-13.

²¹ RD at 14. In Finding of Fact 38, the ALJ found that the Bowline Pond area was not an important spawning area for the species of concern for the project, stating that "Primary spawning areas of these species, producing organisms more vulnerable to entrainment mortality, are found in other sections of the Hudson River, not Haverstraw Bay or Bowline Pond." RD at 51.

²² The Final BTA Rule expressly provides that site specific and local concerns may be addressed through the new Rule or through State requirements. See, e.g., USEPA Rule at 65338, § 125.80(d); 65340-65341, § 125.84; 65341, § 125.85 and the discussion below.

²³ RD at 36-37. The DOS, with the assistance of the DEC, has designated the Haverstraw Bay segment of the river at the Bowline site a CZMP Significant Coastal Fish and Wildlife Habitat, through its New York's Coastal Zone Management Program (CZMP). See Executive Law Article 42, 19 NYCRR Part 600, et seq. The record shows that it is undisputed that there are six⁽²⁴⁾

²⁴ Although the RD identified five species of concern, Staff has clarified that six species actually exist, with the river herring comprising two consolidated species due to "difficulties in distinguishing early life stages." Staff Exceptions Brief at 16.

²⁵ See Athens at 9 ("...what might meet the BTA mandate for a new power plant on a site in the mid-Hudson Valley may not be appropriate in an entirely different setting".)

²⁶ USEPA recognized that the primary impacts of CWISs are related to the impingement and entrainment of aquatic organisms associated with the operation of cooling water intake structures. Rule at 65297.

²⁷ In fact, the provisions of 6 NYCRR § 754.1 provide a mechanism to allow the Department to impose more stringent limitations in a SPDES permit "necessary to meet water quality standards, treatment standards or schedules of compliance, established pursuant to any State law or regulation consistent with section 510 of the act (CWA)". 6 NYCRR § 754(a)(5)(iii).

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