PSC-15-12-00006-P Regulations Implementing PSL Article 10 Governing Applications to Construct Major Electric Generating Facilities

4/11/12 N.Y. St. Reg. PSC-15-12-00006-P

NEW YORK STATE REGISTER

VOLUME XXXIV, ISSUE 15

April 11, 2012

RULE MAKING ACTIVITIES

PUBLIC SERVICE COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PSC-15-12-00006-P

Regulations Implementing PSL Article 10 Governing Applications to Construct Major Electric Generating Facilities

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Repeal of Subchapter A; and addition of new Subchapter A to Title 16 NYCRR.

Statutory authority:

Public Service Law, sections 160(8), 161(1), (3), 163(1)(h), (2), (4)(b), 164(1), (2), (3), (4), (6)(b), 165(2), (4)(b), (5), 167(1)(b) and (4)

Subject:

Regulations implementing PSL Article 10 governing applications to construct major electric generating facilities.

Purpose:

To establish review procedures and the content of applications.

Substance of proposed rule (Full text is posted at the following State website:http://www.dps.ny.gov/SitingBoard/):

The New York State Board on Electric Generation Siting and the Environment is proposing to add Subchapter A (consisting of Parts 1000-1002) to 16 NYCRR Chapter X in order to implement Article 10 of the Public Service Law (PSL) with respect to the authorization of the construction and operation of major electric generating facilities, and to repeal existing Subchapter A (consisting of Parts 1000-1003) of 16 NYCRR Chapter X, which implemented former Article X. The proposed regulations implement provisions in Article 10 that were not in former Article X but, to the extent the experience gained in proceedings under former Article X remains relevant, the regulations take advantage of such experience by specifying in some detail the applicable procedures and requirements, while still allowing some flexibility in tailoring such requirements to specific cases.

Proposed Part 1000 contains sections on applicability, definitions, adoption of Public Service Commission procedures, public involvement, pre-application procedures, procedures regarding the filing, service and notice of applications, water quality and coastal certification procedures, procedures regarding discovery of additional information, documents and evidence, the fund to assist municipal and local parties in participating in Article 10 proceedings, amendment and dismissal of applications, acceptance, amendment, revocation, suspension and transfer of certificates and designation of counsel. Regarding public involvement, experience has demonstrated that active and adequate public involvement can be critical to the success of an Article 10 review process if it engages stakeholders early enough in the process so that stakeholder concerns can be considered in the design phase of the proposal when the applicant has the most flexibility as to its plans. Early and informative engagement of stakeholders also minimizes later delays in the review process. Well-conducted public involvement programs by applicants tend to minimize misunderstandings and conflicts in Article 10 proceedings whereas poorly-conducted public involvement programs by applicants tend to exacerbate differences and conflicts. In that regard, it is proposed that applicant public involvement programs, with DPS Staff input, be made a mandatory component of the Article 10 process. The proposed regulation is intended to create a specific process for DPS Staff to provide input into the adequacy of an intended public involvement program without being overly burdensome as to time or iterations. Regarding pre-application procedures, in establishing deadlines, a balance has been struck between the time realistically needed to perform tasks and a desire to keep the process moving. It is difficult to gauge the need for and amount of time that will be needed to negotiate stipulations, but the proposal threads the most workable path through the various competing provisions of the statute. Applicants are encouraged to seek stipulations wherever possible based on DPS Staff experience that stipulations on the methodology and scope of studies creates efficiencies for all parties regardless of perspective. In keeping with the statute, private facility applicants may limit their description and evaluation of alternative locations to parcels owned by, or under option to, such private facility applicants or their affiliates, and private facility applicants may limit their description and evaluation of alternative sources to those that are feasible considering the objectives and capabilities of the sponsor. Review of case history under former Article X demonstrates that many applicants, in the early stages of their projects, tend to focus on electric system and environmental issues and fail to understand and fully consider key issues regarding, among other topics, state laws, local laws, real property rights, and the interplay between the siting statute and other required approvals. Such shortcomings ultimately lead to delays in the review process or the later identification of fatal flaws in a proposal after applicants and the stakeholders have expended considerable time and resources on the review of a proposal. The proposed regulations would require the applicant to address such issues as part of their preliminary planning and will hopefully lead to better proposals. The proposed regulations also require a consideration of environmental justice issues at the earliest stage possible. In addition the proposed regulations provide for funds to be made available to municipalities and local parties (during both the pre-application and post-application phases of proceedings) on an equitable basis in relation to the potential for such funding to make an affective contribution to the proceedings.

Proposed Part 1001 contains sections specifying general application requirements and exhibits concerning overview and public involvement, location of facilities, land use, electric system effects, wind, natural gas and nuclear power facilities, electric system production modeling, alternatives, consistency with energy planning objectives, preliminary design drawings, construction, real property, cost of facilities, public health and safety, pollution control facilities, air pollutant emissions, safety and security, noise and vibration, cultural resources, geology, seismology and soils, terrestrial ecology and wetlands, water resources and aquatic ecology, visual impacts, effects on transportation and communications, socioeconomic effects, environmental justice, site restoration and decommissioning, state and local laws and ordinances, other filings, electric, gas, water, wastewater and telecommunications interconnections, electric and magnetic fields, back-up fuel, and applications to modify or build adjacent to existing facilities. The goal of proposed Part 1001 is to require enough information in applications to allow the board to make the findings and determinations required by PSL Section 168, recognizing that additional information will be provided as the record of the certification proceeding is developed and also that final construction-type details are unnecessary and costly to provide until after generating facilities are authorized.

Proposed Part 1002 contains general procedures and requirements regarding compliance filings, reporting and inspection. Detailed information to enable construction to proceed consistent with certificates is required after certificates are granted.

Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website http://www.dps.state.ny.us/f96dir.htm. For questions, contact:

Leann Ayer, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Jaclyn A. Brilling, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

Statutory Authority:

The proposed rules and regulations are authorized by Public Service Law (PSL) Sections 160(8), 161(1) and (3), 163(1)(h), (2) and (4)(b), 164(1), (2), (3), (4) and (6)(b), 165(2), (4)(b) and (5), and 167(1)(b) and (4). These provisions give the New York State Board on Electric Generation Siting and the Environment (Board) authority to adopt procedural and substantive regulations applicable to the certification process regarding the construction and operation of major electric generating facilities pursuant to PSL Article 10.

Section 161(1) empowers the Board to adopt regulations relating to the certification procedures to be followed; it is implemented by Parts 1000 and 1002. Section 160(8) provides that the duties of the public information coordinator may be prescribed by the Board; it is implemented by Section 1000.4(b). Section 161(3) allows the Board, under the direction of the chairperson, to provide for its own representation and appearance in actions and proceedings involving questions under PSL Article 10; it is implemented by Section 1000.18. Section 163(2) authorizes the Board to determine the language in which notice of preliminary scoping statements must be given; it is implemented by Section 1000.5(d). Section 163(4)(b) requires the Board to adopt rules providing for an expedited schedule of disbursements from the intervener account; it is implemented by Section 1000.10(a). Section 164(2) authorizes the Board to prescribe the manner in which service of an application must be proved; it is implemented by Section 1000.6(c)(2). Section 164(3) empowers the Board to adopt regulations for curing the inadvertent failure of service; it is implemented by Section 1000.7(i). Section 164(6)(b) mandates that the Board adopt regulations for the management of the intervener account; it is implemented by Section 1000.10(b) and (c). Section 165(2) allows the Board to determine what warrants consideration in order to develop an adequate record; it is implemented by Section 1000.9. PSL Section 165(5) requires the Board to adopt regulations regarding determinations as to the holding of hearings on application for certificate amendments; it is implemented by Section 1000.16. Section 167(1)(b) directs the Board to issue regulations providing for prehearing discovery procedures, consolidation of the representation of parties, exclusion of evidence and the review of presiding examiners' rulings; it is implemented by Section 1000.3 (adopting the Commission's rules of procedure at 16 NYCRR Parts 3, 4 and 5) and by Section 1000.12(a)(3). Section 167(4) requires the Board to prescribe the period within which notice of the intent to submit testimony on certain alternatives must be given; it is implemented by Section 1000.7(f).

Section 163(1)(h) empowers the Board to require preliminary scoping statements to include information in addition to that specifically required in Section 163(1)(a) through (g); it is implemented by Section 1000.5(l). Section 164(1) authorizes the Board to prescribe the form of an application and Section 164(1)(m) empowers the Board to require such application to contain information in addition to that required by Section 164(1)(a) through (l); these are implemented by Part 1001. Section 164(4) empowers the Board to prescribe the form and content of applications for certificate amendments; it is implemented by Section 1000.16(b)(1) and (2). Section 165(4)(b) permits the Board to direct owners of existing major electric generating facilities to supply details and supporting information regarding the modification of such facilities or the construction of contiguous facilities; it is implemented by Sections 1002(a) and (v) and 1001.41.

Legislative Objectives:

Chapter 388 of the Laws of 2011 enacted Article 10 of the PSL to streamline the State decision-making process with respect to issuing a certificate for constructing and operating new major electric generating facilities having a nameplate capacity of twenty-five thousand kilowatts or more, and modified or repowered facilities. Sections 168(3)(e) and 172(1) provide that state and local regulatory matters regarding the construction and operation of major electric generating facilities are to be determined in a unified manner. Sections 165(3) and 167(1)(a) require that certification proceedings be conducted expeditiously; a 12-month deadline is imposed generally in Section 165(4). Section 163 mandates a pre-application consultation process to obtain early input from the public regarding proposed facilities and requirements for intervenor funding to promote local participation. The proposed procedural and substantive regulations are carefully crafted, based on significant experience with similar siting statutes to meet these objectives.

Needs and Benefits:

The proposed regulations are necessary for the effective implementation of PSL Article 10 as enacted by Chapter 388 of the Laws of 2011. 16 NYCRR Subchapter A is proposed to be repealed and replaced to meet the new statutory requirements. The goals of the regulations are to accommodate state and local permitting requirements in a single regulatory process and to focus regulatory review on pertinent issues regarding impacts on the environment, health, safety and infrastructure, effects on the State's electric generation capacity, compliance with state and local legal requirements, and to consider available technology, the nature and economics of reasonable alternatives, consistency with the energy policies and objectives, community character, and social, economic, environmental justice and other public interest considerations. Local procedural requirements applicable to the facility are supplanted unless the Board expressly authorizes the exercise of the procedural requirement by the local government. Local substantive requirements apply unless the Board finds them to be unreasonably burdensome in view of the existing technology or the needs of or costs to ratepayers. Additional analyses are required where there may be concerns about environmental justice. The regulations would apply to generating facilities governed by certificates under former PSL Articles VIII and X regarding certificate amendments, revocations, suspensions, transfers and compliance matters consistent with the pertinent statutory provisions. A proposal to increase the capacity of such generating facilities by more than 25 MW would be considered under Article 10.

Experience demonstrates that well conducted public involvement programs by applicants (including early and informative engagement of stakeholders) tend to minimize misunderstandings and conflicts. The regulations provide for an office of public information coordinator to ensure that the public and interested parties are fully assisted and advised in participating in the Article 10 process, and require applicants to conduct public involvement programs. No less than 90-days before the application is filed, the regulations require the applicant to file a preliminary scoping statement addressing key issues in a preliminary manner and giving interested parties an opportunity to give input and negotiate pre-application stipulations on the scope and methodology of required studies. Upon the filing of the preliminary scoping statement, the regulations allow for a presiding examiner to provide for awards of intervenor funds during the pre-application process to encourage municipal and other local participation at the earliest opportunity. They also provide for later separate fund awards to encourage public participation during the formal review phase of certification proceedings.

The Article 10 hearing process is designed in the regulations to operate efficiently. Most testimony is prepared, filed and distributed well in advance of any cross examination. The applicant has the burden of proof associated with any adjudicable issue. Any issue to be litigated must be relevant and material to assisting the Board in making its required findings. The hearing examiner is authorized to preclude irrelevant, repetitive, redundant or immaterial evidence.

The regulations would require each factor specified in the statute to be addressed. They would require preliminary design drawings to allow a thorough evaluation of site conditions, facility layout and structural design so the board can make the applicable statutory findings. They would also memorialize due diligence regarding site control and establish the legal basis for conducting site development activities so the board can make the applicable statutory findings. The regulations would require the characterization and quantification of existing natural resources that may be impacted by construction and operation of a proposed facility, consistent with state law and policy. The regulations would provide for a robust consideration of alternatives, but private applicants would be allowed to limit their evaluation of alternative sites to properties they own or control, and alternative sources to those that are reasonable alternatives to the proposed facility and feasible considering their objectives and capabilities, as allowed by equivalent assessments required under the State Environmental Quality Review Act.

The regulations provide the benefit of a reasonable level of detail, while retaining flexibility for interested parties by stipulation to tailor applications to particular circumstances. The overarching aim of the draft regulations is to strike a proper balance by providing a robust body of information up front to enable parties and the public to understand proposed facilities and their impacts so they can effectively and promptly engage in the Article 10 hearing process, while not unduly burdening applicants who bear the cost of preparing applications.

Costs:

The projected costs to regulated persons of complying with the proposed regulations are as follows: for developers of renewable generation, $1.5 to $4.5 million; for developers of fossil-fueled generation, $10 to $30 million; for developers of nuclear generation, $30 to $70 million. The estimates of costs were provided by potential project developers and attorneys familiar with the certification process under similar statutes. Parties participating in a certification proceeding will incur some cost; however, such costs will depend on the degree to which a particular party participates. Moreover, local parties and municipalities may be awarded funds from the intervenor account, which costs are included in the above cost estimate for developers. Similarly, costs for the implementation and continued administration of the proposed regulations to the State, the Board and local governments depend on the circumstances of each proceeding.

Local Government Mandates:

The proposed regulations do not impose any mandates on local governments unless a municipality is an applicant, or as a municipal party participating in a proceeding obtains funding to defray its participation costs.

Paperwork:

The proposed regulations are expected to decrease paperwork requirements because they streamline the process and focus on pertinent issues. Moreover, they provide that, to the maximum extent possible, documents will be filed and served electronically, unless a party certifies to the Secretary that the party is unable to do so and must file and receive paper documents. The rule also requires assistance, when warranted, to municipal and local parties in the reproduction and service of documents, and access to transcripts.

Duplication:

The proposed regulations do not duplicate any other state or federal regulations.

Alternative Approaches:

Input on a draft of the regulations was sought from almost 100 individuals and organizations that volunteered to serve as representative stakeholders representing potential developers of facilities, state agencies and authorities, municipalities, environmental and environmental justice groups, attorneys, consultants and other individuals likely to participate in certification proceedings. In response to stakeholder input, the approach of the draft was significantly altered to eliminate duplication (e.g., energy deliverability study requirement dropped) and to reduce the detail of information to be included in applications (e.g., design drawings, storm water prevention plans, and land surveys) in recognition that construction-level details are more appropriate in the post-certification compliance phase. Some stakeholders recommended that applicants be able to obtain early decision as to which local laws would be overridden by the Board. While the proposed regulations do not provide special procedures for obtaining such early decisions, the Board's general procedures for motion practice and declaratory rulings provide a potential avenue for handling extraordinary requests for such relief if deemed warranted. Numerous alternative methodologies were considered for conducting the requisite noise analysis. A detailed summary and analysis of the stakeholder input and its reflection in the proposed regulations is included in the Memorandum and Resolution Initiating Promulgation Process for Proposed Article 10 Regulations and Adopting Notice of Proposed Rulemaking and is incorporated herein by reference. A copy of the Memorandum and Resolution may be accessed for public viewing at the Siting Board webpage: http://www.dps.ny.gov/SitingBoard/.

Federal Standards:

The proposed regulations do not establish performance standards or exceed any Federal Standards.

Compliance Schedule:

Potential applicants are expected to be able to comply with adopted regulations as soon as they become effective because the application requirements implement statutory requirements that have been public for several months, thereby providing ample notice and opportunity to prepare.

Regulatory Flexibility Analysis

Types and Number of Small Businesses and Local Governments:

The rules apply to anyone proposing to construct and operate a major electric generating facility in the State and to any municipal or other party participating in the proceedings. A "small business" is defined as any business that is resident in this state, independently owned and operated, and employs one hundred or less individuals. Some applicants may qualify under the definition of small business if they are not formed as a subsidiary of a larger company or with other companies as the investors. It is expected that most applicants will be formed as limited liability companies with few employees, but with corporate owners and investors, such that they will not be independently owned and operated as small businesses. Small businesses located in the vicinity of a proposed facility site, or otherwise potentially affected by a proposed facility, may participate in Article 10 proceedings as intervenor parties. Affected local governments are likely to participate as intervenor parties in Article 10 proceedings. Municipalities and other local political subdivisions and government agencies that are local governments may also potentially be applicants. Although not directly governed by the rules, many of the professionals to be engaged by applicants and intervenors to assist their participation in the proceedings will likely be small businesses. Applicants that qualify under the definition of small business are likely to be newly-formed entities created for the specific purpose of sponsoring an application. The number of small businesses located in the vicinity of a proposed facility site, or otherwise potentially affected by a proposed facility, cannot be estimated and will differ greatly depending on the location of the proposed site for the facility. There are over 4,200 local governments in the State.

Compliance Requirements:

Small business and local government applicants to construct major electric generating facilities in the State are required to submit public involvement plans, preliminary scoping statements, applications, intervenor fees, and compliance filings. The compliance filings may include periodic reports. Municipal and local parties desiring funding to defray participation costs are required to submit funding requests, and if awarded funds, to submit payment vouchers and quarterly compliance reports. Small business and local government parties participating in proceedings may submit testimony, exhibits, briefs, motions, comments, and other documents common to administrative litigation.

Professional Services:

Small business and local government applicants to construct major electric generating facilities in the State will need the services of professionals in the fields of environmental science, engineering, economics and law in order to comply with the requirements of the regulations. Small business and local government parties participating in proceedings will likely wish to obtain the services of such professionals as well.

Compliance Costs:

Small business and local government applicants to construct major electric generating facilities in the State will incur initial costs to prepare public involvement plans, preliminary scoping statements, and applications. Upon submitting preliminary scoping statements, applicants will be required to pay an intervenor fee of up to $200,000. For preliminary scoping statements that are substantially revised, applicants will be required to pay an additional intervenor fee of up to $25,000. Upon submitting applications, applicants will be required to pay an intervenor fee of up to $400,000. For applications that are substantially revised, applicants will be required to pay an additional intervenor fee of up to $75,000. For facilities that will require storage or disposal of fuel waste byproduct, applicants will be required to pay an additional intervenor fee of up to $50,000. Small business and local government parties participating in certification proceedings will incur initial costs to prepare testimony, exhibits, briefs, motions, comments, and other documents common to administrative litigation. Small business and local government applicants awarded Certificates will incur post-approval costs to prepare compliance filings, which may include periodic reports. Small business and local government parties participating in post-approval compliance phases will incur costs to prepare comments and other documents common to administrative litigation. The cost of complying with the rule is expected to vary depending on the character of the proposed facility and the site on which is it is proposed to be located. For those participating in the proceedings, the cost of such participation will depend on the degree of that participation.

Economic and Technological Feasibility:

The rules are economically and technologically feasible for compliance by small businesses and local governments because the requirements are no more onerous on such entities than that those contained in regulations implementing former Article X of the Public Service Law or requirements specified in pre-application stipulations in cases filed pursuant to that article, and small businesses and local governments successfully participated in cases under that Article. Economic feasibility is further enhanced by a fund required to be provided by the applicant in the form of intervenor fees to defray the costs of participation by municipal and local parties. Affected local governments may qualify as a municipal party eligible for intervenor funds. Small businesses located in the vicinity of a proposed facility site, or otherwise potentially affected by a proposed facility, may qualify as a local party eligible for intervenor funds. The only technology required to participate is ordinary software capable of preparing, viewing and transmitting electronic documents. The rule requires assistance, when warranted, to municipal and local parties in the reproduction and service of documents, and access to transcripts.

Minimizing Adverse Impact on Small Businesses and Local Governments:

Application content requirements were carefully crafted to benefit all participating parties, including small businesses and local governments. In particular, the process and specificity required regarding compliance with local laws and ordinances is designed to keep local governments and other parties from having to expend resources litigating unnecessary issues or issues that could have been more easily resolved if there was a dialogue between the applicant and the municipality. The rule provides for intervenor funding at both the pre-application and post-application phases of the proceeding, affording local governments and small businesses the opportunity to obtain resources necessary to participate effectively in siting cases.

Small Business and Local Government Participation:

Representatives of almost 100 individuals and organizations (including small businesses and local governments) reviewed a draft of the regulations and then were contacted to get their input on draft regulatory language. They represented potential developers of nuclear, fossil and renewable generation, state agencies and municipalities, environmental and environmental justice groups, attorneys, consultants and other individuals likely to participate in certification proceedings. Their feedback on both specific and general issues was incorporated into the proposed regulations.

Rural Area Flexibility Analysis

Types and Number of Rural Areas:

The rule applies to all rural areas in the State, since applicants may seek to construct major electric generating facilities throughout the State. Rural areas are defined as counties with populations less than 200,000 and, for counties with populations greater than 200,000, towns within such counties with population densities of 150 persons or less per square mile. Of the State's 62 counties, 43 have populations of less than 200,000. Of the 19 counties with populations greater than 200,000, 9 have towns with population densities of 150 persons or less per square mile.

Compliance Requirements:

Applicants to construct major electric generating facilities in the State are required to submit public involvement plans, preliminary scoping statements, applications, intervenor fees, and compliance filings. The compliance filings may include periodic reports. Municipal and local parties desiring funding to defray participation costs are required to submit funding requests, and if awarded funds, to submit payment vouchers and quarterly compliance reports. Parties participating in proceedings may submit testimony, exhibits, briefs, motions, comments, and other documents common to administrative litigation. Such requirements are generally the same without regard to whether the facility is to be located in a rural or non-rural area.

Professional Services:

Applicants to construct major electric generating facilities in the State will need the services of professionals in the fields of environmental science, engineering, economics and law in order to comply with the requirements of the regulations. Parties participating in proceedings will likely wish to obtain the services of such professionals as well.

Compliance Costs:

Applicants to construct major electric generating facilities in the State will incur initial costs to prepare public involvement plans, preliminary scoping statements, and applications. Upon submitting preliminary scoping statements, applicants will be required to pay an intervenor fee of up to $200,000. For preliminary scoping statements that are substantially revised, applicants will be required to pay an additional intervenor fee of up to $25,000. Upon submitting applications, applicants will be required to pay an intervenor fee of up to $400,000. For applications that are substantially revised, applicants will be required to pay an additional intervenor fee of up to $75,000. For facilities that will require storage or disposal of fuel waste byproduct, applicants will be required to pay an additional intervenor fee of up to $50,000. Parties participating in certification proceedings will incur initial costs to prepare testimony, exhibits, briefs, motions, comments, and other documents common to administrative litigation. Applicants awarded Certificates will incur post-approval costs to prepare compliance filings, which may include periodic reports. Parties participating in post-approval compliance phases will incur costs to prepare comments and other documents common to administrative litigation. The cost of complying with the rule is expected to vary depending on the character of the proposed facility and the site on which is it is proposed to be located. For those participating in the proceedings, the cost of such participation will depend on the degree of that participation.

Minimizing Adverse Impact on Rural Areas:

The limited access to financial and technical assistance in rural areas will be minimized by a fund to defray the costs of participation by municipal and local parties required to be provided by the applicant in the form of intervenor fees.

Rural Participation in the Rulemaking:

Representatives of almost 100 individuals and organizations (many of which are located in rural areas) reviewed a draft of the regulations and then were contacted to get their input on draft regulatory language. They represented potential developers of nuclear, fossil and renewable generation, state agencies and municipalities, environmental and environmental justice groups, attorneys, consultants and other individuals likely to participate in certification proceedings. In particular, the specific municipal and individual stakeholders consulted included municipalities and individuals from rural areas. Their feedback on both specific and general issues was incorporated into the proposed regulations.

Job Impact Statement

The agency has determined that the rule will not have an adverse impact on jobs or employment opportunities in the State. The rule will have an indirect positive impact on employment opportunities for economic, engineering, and environmental consultants and lawyers employed to assist applicants and parties in administrative proceedings.