Beveridge & Diamond
 

New York State Reestablishes Comprehensive Power Plant Siting Law

Beveridge & Diamond, P.C., August 31, 2011

On August 4, 2011, Governor Andrew Cuomo signed The Power NY Act of 2011 (Act) into law after the Senate and Assembly passed it in the waning days of the legislative session.  The Act reestablishes Article X of the Public Service Law, governing the siting of major power plant projects in the state. 

The prior Article X, which expired on January 1, 2003, had become an established “one stop” process for reviewing power plant proposals with capacities of 80 megawatts (MWs) or more.  The “one stop” label was somewhat of a misnomer in that applicants were (and, at least for now under the new law, are) still required to obtain separate federally-delegated approvals under authority of the Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act.  Otherwise, Article X did (and does) eliminate the need to go before other state agencies and local boards (e.g., for zoning approvals). 

The Basics: Similarities and Differences Between Old and New Law

In terms of overall structure, the new law will look familiar to those who dealt with the prior Article X.  There are some notable changes, however. 

               Applicability Threshold

The new Article X applies to proposed electric generating facilities with a capacity of 25 MWs or greater -- significantly lower than the old 80 MW threshold.  For smaller projects exceeding the new lower threshold, Article X could represent a significant regulatory hurdle to entry into the marketplace.     

               Siting Board Certificate

Before construction may commence, the applicant must secure a Certificate of Environmental Compatibility and Public Need from the New York  State Board on Electric Generation Siting and the Environment (Siting Board).  The decision to grant or deny a certificate must be based on required statutory findings by the board.  The permanent Siting Board is made up the heads (or their respective designees) of the (i) Public Service Commission, (ii) Department of Environmental Conservation (DEC), (iii) Department of Health, (iv) New York State Energy  Research and  Development Authority and (v) Economic Development.  Two ad hoc members are then appointed to the board for each specific proposal. 

               DEC Regulations Required Before Article X Can Be Implemented

While the law takes effect immediately, developers are not required to seek review under Article X until DEC promulgates new regulations pertaining to environmental justice and cumulative air impacts.  DEC has one year to finalize these rules.  In the meantime, developers may pursue projects by seeking necessary approvals from other agencies and boards and being subject to review under the State Environmental Quality Review Act (SEQRA).  An applicant that has applied for a permit or other approval from any local, state or federal regulatory body prior to DEC’s issuance of these rules is exempt from Article X review as long as the application in question designates the location of the proposed facility.  These projects may, however, “opt-in” to the program.

               Waiver Authority

Similar to the old law, the Siting Board is authorized to waive, in whole or in part, any local ordinance, law, etc., if the board finds that it is unreasonably burdensome in view of existing technology or the needs of or costs to ratepayers.  Unlike the prior Article X, this waiver authority now extends to standards and requirements relating to the interconnection to and use of certain infrastructure (e.g., water, sewer, and electric lines) in public rights-of-way. 

            The Process

Prior to a formal application, the applicant must submit a preliminary scoping statement (PSS) outlining then known facts about the proposed project, including:

  • description of the proposed facility and its environmental setting
  •  potential environmental and health impacts
  •  proposed studies to evaluate the impacts of the project
  • proposed mitigation measures
  • the sufficiency of on-site fuel storage and supply (if petroleum or another back-up fuel is proposed to be used to generate electricity)
  • reasonable and available alternative locations
  • other state/federal regulatory approvals required for the project

The process then provides for the development of stipulations that can set forth the signatories’ agreement on any aspect of the PSS or the studies and information to include in the application.  Applicants interested in pursuing the stipulations can expect the process to take at least several months.  Under the old Article X, applicants seeking to streamline the process began to include proposed stipulations with the PSS.  Parties that do not sign the stipulations are not bound by them. 

The applicant must support an intervenor fund to defray costs incurred by municipal and local parties for experts, consultants, and administrative and legal fees. The new intervenor fund obligations are significant, requiring up to $200,000 at the PSS submission stage and $400,000 at the application stage, with additional amounts potentially required if the proposal is modified. 

In addition to the types of information required for the PSS and the analyses noted above on environmental justice and cumulative air impacts, the application must include, among other things:

  • a plan for security, including emergency and contingency planning
  • a comprehensive description of the community in which the facility will be located 
  • description (demographic, economic and physical) of the proposed facility and its environmental setting
  • for wind facilities, anticipated impacts on avian and bat species
  • potential impacts to the wholesale generation market, as well as on fuel costs
  • consistency with the State Energy Plan

(Note: Detailed information on the required contents of an application is set forth in Section 164 of the Public Service law.)

Timeframes, Rehearing and Judicial Appeal

The chair of the Siting Board has 60 days to determine whether an application is sufficiently compliant with Article X’s requirements to proceed with the full review process, which generally must be completed within one year of the compliance determination, but this period may be extended by six months in certain instances.  There is a shorter six-month review period (with the possibility of a three-month extension) available for proposed modifications of existing plants or for new plants adjacent to existing plants if they meet certain criteria, which focus on reduced emissions, reduced water needs through use of a new cooling structure and improved heat rate.  Once a decision is rendered, a party challenging the Board’s decision must seek rehearing before the Siting Board before seeking judicial relief. 

Some Uncertainties Remain

Article X offers a comprehensive and relatively predictable process for reviewing new power plant proposals.  However, as with its predecessor, the new Article X is likely to experience some growing pains. 

For example, applicants may be frustrated with the time it takes to receive a compliance determination on an application.  Until this compliance determination is achieved, there is little predictability in terms of the timeframe leading to a final Siting Board decision on a project.  Prior Article X experience should provide a roadmap to help alleviate some pre-application delays.

The regulations to be promulgated by DEC also create some uncertainties.  While the statutory mandate to promulgate regulations addressing environmental justice (“significant and adverse disproportionate environmental  impacts”) suggests the required analysis will be similar to that required under existing guidance, the requirement relating for cumulative air impacts within a 1/2 mile of the proposed site is less certain and may be problematic if, for example, applicants are forced to double count emissions from existing sources in the vicinity of the project by adding these emissions to background concentrations.  

The required alternative sites analyses may require clarification.  In one section, Article X requires the applicant to evaluate “reasonable and available alternative locations to the proposed facility,” but this evaluation need be no more extensive than required under SEQRA (for a private applicant – typically limited to sites it controls).  Elsewhere, in the context of addressing the project’s consistency with the State Energy Plan, the applicant must discuss the comparative advantages and disadvantages of “reasonable and available alternate locations or properties identified for power plant construction” and state “the reasons why the proposed location and source is best suited, among the alternatives identified, to promote public health and welfare.”  One might assume that the discussion of “reasonable and available alternative locations” as it pertains to the State Energy Plan will be similarly guided by SEQRA, but only time will tell if this assumption is correct.  The new law also enshrines the right of other parties to present testimony on “reasonable and available” alternative sites.  This language may stem from a practice that emerged in several proposals reviewed under the old law allowing a more open-ended consideration of alternative sites that, in a number of instances, caused confusion and delay.   

Lastly, Article X generally precludes any state or local agency or board from requiring an Article X project to obtain any permit, license, approval, etc. from that agency or board (except those required under federally delegated programs).  Under the old law, this prohibition raised the ire of some local municipalities that viewed it as an infringement on their “home rule” authority.  The Siting Board’s waiver authority likely did little to alleviate their concern.  Now the Legislature has extended both the prohibition and the waiver authority to “the interconnection to or use of water, electric, sewer, telecommunication, fuel and steam lines in public rights of way.”  The outer parameters of this prohibition/authority may be tested at some point. 

For more information, please contact Michael Murphy at mmurphy@bdlaw.com or Steve Gordon at sgordon@bdlaw.com.