NEW YORK STATE BOARD ON ELECTRIC GENERATION SITING AND THE ENVIRONMENT

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1 NEW YORK STATE BOARD ON ELECTRIC GENERATION SITING AND THE ENVIRONMENT At a session of the New York State Board on Electric Generation Siting and the Environment held in the City of Albany on June 21, 2007 CASE 04-F Petition of AES NY, L.L.C. for Clarification or Amendment of the Certificate of Environmental Compatibility and Public Need Issued December 9, 1978, in Case 80002, as Amended, filed in Case BOARD MEMBERS PRESENT: Patricia L. Acampora, Chairwoman New York State Public Service Commission Keith Corneau, Alternate for Daniel Gundersen, Commissioner New York State Empire State Development Alexander B. Grannis, Commissioner New York State Department of Environmental Conservation G. Anders Carlson, Ph.D., Alternate for Richard F. Daines, MD, Commissioner New York State Department of Health BY THE BOARD: A. Summary ORDER GRANTING AMENDMENT OF CERTIFICATE OF ENVIRONMENTAL COMPATIBILITY AND PUBLIC NEED (Issued and Effective June 29, 2007) I. INTRODUCTION To initiate the current phase of this proceeding, we ordered an evidentiary hearing on a proposal by AES NY, L.L.C. (AES) concerning disposal of coal combustion byproducts (CCBs) from AES s Somerset Generating Station, a 675 megawatt coal-fired electric plant in the Town of Somerset, Niagara County. In anticipation of the hearing, AES, staff of the Department of Environmental Conservation (DEC), and the Town of Somerset (Town)

2 CASE 04-F-1178 negotiated and jointly submitted a consensus proposal to supersede AES s original proposal. On the basis of the hearing record and subsequent argument, the Examiners have recommended that we adopt the Joint Proposal s terms, with modifications. On exceptions, AES opposes the Examiners recommended modifications, while DEC staff and the Town seek to clarify their respective positions. In today s order, we deny AES s exceptions, note the other parties clarifications, and accordingly adopt the Examiners recommendations. We thereby grant an amendment of the Somerset Station s Certificate of Environmental Compatibility and Public Need (Certificate). The amendment s primary purposes are to authorize AES to use Solid Waste Disposal Area (SWDA) II at the plant site for disposal of CCBs whose ammonia content does not exceed two parts per million (ppm), and prescribe design and operating requirements for SWDA II. B. Procedural Background Pursuant to a Certificate issued in 1978, the Somerset Station commenced operation in In 1999, this Board exercised its continuing jurisdiction over the facility pursuant to Public Service Law (PSL) Article VIII (as enacted in 1972), by amending the 1978 Certificate to authorize the installation of a Selective Catalytic Reduction (SCR) system for air pollution control. At the same time, this Board adopted, as conditions of the amended Certificate, the provisions of a Memorandum of Understanding (MOU) among the parties concerning CCB disposal. 1 By adopting the MOU s terms, we established a requirement that ammoniated CCBs created during operation of the SCR system would be deposited only in SWDA III (one of three subdivisions of the plant s landfill area) in a manner consistent with the DEC landfill regulations in Part 360 of Title 6, New York Codes, Rules, and Regulations (Part 360). Those regulations prescribe, among other things, a double composite liner system, 1 Case 98-F-2005, N.Y.S. Electric & Gas Corp. and AES NY, LLC, Order Amending Certificate (issued April 26, 1999) (hereafter, 1999 Amendment Order ). -2-

3 CASE 04-F-1178 and it was assumed that such a system would be used in SWDA III. However, in a compliance filing pursuant to the order granting the 1999 amended Certificate, AES sought permission from the Public Service Commission (PSC) to deposit SCR-generated CCBs in SWDA II, which was expected to contain only the single liner system specified in the original Certificate and the 1999 amended Certificate. 2 AES argued that the CCBs it would deposit in SWDA II should not be deemed ammoniated within the meaning of the MOU--and therefore need not be confined to SWDA III--unless their ammonia concentration exceeded two ppm. The PSC declined to adopt AES s interpretation of the MOU. It ruled that AES s proposed use of SWDA II would violate the 1999 amended Certificate, unless explicitly authorized by a further Certificate amendment or by some other means. 3 In response, AES filed the petition now pending, which asks us to clarify or further amend the 1999 amended Certificate to establish that an ammonia concentration of two ppm or less is or ought to be the criterion for determining whether CCBs may be deposited in SWDA II. 4 On reviewing the petition, we found that the requested authorization for use of SWDA II could not be inferred through a mere clarification of the 1999 amended Certificate, and that the question presented therefore is whether the Certificate should be further amended. We directed that the Examiners conduct an evidentiary hearing on facts related to the findings we must make under PSL 146(2) as preconditions for approval of a certificate amendment. 5 2 SWDA II was being constructed in phases. The SWDA II phases at issue in this proceeding are those subsequent to Phases A and B, which already have been constructed. 3 Case 98-F-2005, supra, Order Accepting Compliance Filing in Part (issued April 28, 2004), pp Case 04-F-1178, Petition for Clarification or Amendment of the Certificate of Environmental Compatibility and Public Need Issued December 9, 1978, in Case 80002, as Amended, filed September 30, Case 04-F-1178, Order Directing Holding of Discretionary Evidentiary Hearing (issued January 27, 2005), p

4 CASE 04-F-1178 The Examiners Recommended Decision recounts in full detail the background briefly summarized above. 6 The processes described above culminated in a negotiated Joint Proposal executed by AES, DEC staff, and the Town and filed July 6, 2006, representing their agreement as to how we should resolve the contested issues. The proposal was the subject of an evidentiary hearing, after which the Examiners recommended that we adopt the proposed terms subject to certain modifications or qualifications. As noted, adoption of the Examiners recommendations would allow the CCBs in question to be deposited in SWDA II subject to various terms and conditions, including the use of a modified liner system in any areas ( phases ) hereafter developed within SWDA II. After issuance of the Recommended Decision, briefs on exception were filed by AES, DEC staff, and the Town. 7 AES s brief includes a preemptive objection to any other party s brief that, in the guise of an exceptions brief, might advocate applicability of 6 NYCRR Part 360 in some respects or might otherwise seek to bolster or support the Recommended Decision. 8 The Town, choosing to construe AES s objection as a motion to strike, has filed a purported answer. The Town accuses AES of attempting to initiate an unauthorized round of briefs opposing exceptions, for the purpose of denying us legitimate insights into the parties positions. 9 AES seeks leave to object to the Town s submittal. According to AES, the Town s filing is out of order because the disputed footnote in AES s brief is simply an anticipatory argument and not a motion; 6 Case 04-F-1178, Recommended Decision (issued December 12, 2006), pp Briefs dated January 12, 2007, filed in accordance with a notice accompanying the Recommended Decision and a subsequent extension of briefing dates by the Secretary. 8 AES s brief, p. 1, note 2. 9 Letter to the Secretary from Edwin J. Shoemaker, Esq., dated January 22,

5 CASE 04-F-1178 thus, in AES s view, it is the Town that has attempted an unauthorized brief opposing exceptions. 10 Under our interpretation of the substantive issues, the only purpose for which we must consider the Town s brief is to rectify what the Town deems the Examiners misdescription of its position (Point III, below). Similarly, while DEC staff s brief is useful to complete the record regarding DEC staff s intent in executing the Joint Proposal, we are not relying upon it for decisional purposes. Instead, today s order establishes our interpretation of the Joint Proposal s terms, based on our own legal analysis which supersedes any other rationales that may have induced parties to support the Joint Proposal. Thus, the Town s and DEC staff s briefs are relevant only for purposes that do not run afoul of AES s objection to briefs supporting the Recommended Decision or the applicability of Part 360. II. AES S EXCEPTIONS A. Scope of Hearing and Decisional Criteria (Exception No. 1) AES argues that the Examiners exceeded the scope of our order directing a discretionary hearing 11 by analyzing the materiality of AES s proposed certificate amendments in light of all relevant PSL 146(2) criteria, instead of limiting their inquiry to those criteria specifically enumerated in the order. AES contends that the hearing we ordered was for the limited purpose of determining whether AES s proposed amendments were a revision under the PSL Article X regulations 12 and, thus, whether an evidentiary hearing was required under PSL 143(2). In such a context, AES argues, the PSL 146(2) criteria are not applicable. AES therefore asserts that the Examiners erred by analyzing the Joint Proposal in light of all relevant PSL 146(2) criteria. In particular, AES excepts to the Examiners analysis concerning the governing State law and regulations under 10 Letter to the Secretary from Robert J. Alessi, Esq., dated January 24, Case 04-F-1178, Order Directing Holding of Discretionary Evidentiary Hearing, supra NYCRR Part

6 CASE 04-F-1178 PSL 146(2)(d). The exception is denied. For the reasons that follow, we conclude the exception is procedurally improper and that AES misinterprets our order directing a hearing and the applicable law governing certificate amendments. As an initial matter, AES failed to preserve its present exception before the Examiners. Throughout these proceedings, the question was repeatedly raised whether the current regulations governing landfill construction were the applicable State law and regulation to be applied pursuant to PSL 146(2)(d). In response, AES argued that the applicable State law and regulations were limited to the prior 1978 Certificate and the 1999 Amendment Order. AES did not argue that the hearing was confined to a determination whether the proposed amendments were a modification, as opposed to a revision, and that PSL 146(2)(d) therefore was not to be examined. Thus, AES s exception is improper because it is raised for the first time in its brief addressed to us, and was not raised before the Examiners although AES had the opportunity to do so. Accordingly, the exception is denied on that ground. Moreover, AES misreads our order directing an evidentiary hearing. As we have previously noted, a PSL Article VIII certificate may be amended in conformance with PSL 143(2). 13 Pursuant to PSL 143(2), before determining whether an application for a certificate amendment may be granted, we must make a threshold determination whether an evidentiary hearing will be conducted in accordance with PSL 145. PSL 143(2) provides that on an application for an amendment to a certificate, a hearing will be held if the application proposes a change in the facility likely to result in any material increase in any environmental impact of the facility or a substantial change in location of all or a portion of such facility. PSL 143(2) also provides that the determination whether to conduct hearings on certificate amendment applications 13 Case 03-F-1351, AES NY, LLC Somerset Generating Station, Order Amending Certificate of Environmental Compatibility and Public Need (issued December 23, 2003), p

7 CASE 04-F-1178 will be made pursuant to standards established in regulation. Those regulations are the 16 NYCRR part 1000 regulations implementing Article X, which replaced the regulations implementing Article VIII and are currently applicable to facilities sited under Article VIII. 14 The assessment whether a hearing is required under PSL 143(2) is performed under 16 NYCRR , which specifies that if a proposed amendment is a revision, a hearing will be conducted. 15 If the proposed amendment is a modification, such modification may be considered without a hearing, but after notice and opportunity for comment. 16 To determine whether a proposed amendment is a revision, we must apply the criteria for determining significance set forth in the State Environmental Quality Review Act (SEQRA) regulations at 6 NYCRR 617.7(c). 17 The threshold determination whether a proposed certificate amendment is a revision is to be made by the Siting Board, after consultation with the staffs of DPS, DEC, and the Department of Health, as appropriate. 18 Moreover, similar to a State agency s determination of significance under SEQRA, the determination under 16 NYCRR is made without an evidentiary hearing. Nothing in PSL 143(2) or the implementing regulation provides for a hearing to determine whether an evidentiary hearing should be held under PSL 143(2). Nor has it been our practice to require a hearing to make the determination of significance under 16 NYCRR Our order directing the holding of a discretionary hearing in this case did not deviate from the regulations or our prior practice. When making the threshold determination whether a hearing should be held pursuant to PSL 143(2), we were unable to conclude that the proposed amendment would not result in material or significant environmental impacts. Thus, we were 14 Id.; Case 98-F-2005, 1999 Amendment Order, supra, p NYCRR (c). 16 Id (d). 17 Id (a)(1). 18 Id (a)(2). -7-

8 CASE 04-F-1178 unable to conclude the proposed amendments were a modification not requiring a hearing. Accordingly, we directed that an evidentiary hearing be held pursuant to PSL 143(2) to develop the record upon which to make the findings required by PSL 146(2) on the merits of AES s certificate amendment application. Indeed, the specific questions we directed the Examiners to consider are related to the findings required under PSL 146(2) on the merits of AES s application. Those included factors as to whether the proposed amendments are compatible with the public health, and are in the public interest, given environmental impact and cost considerations. 19 If we had intended that a hearing be held to determine whether the proposed amendments were a revision requiring a hearing, we would have cited 16 NYCRR (a) or 6 NYCRR 617.7(c) as the governing standards, not PSL 146(2); and our enumeration of specific considerations would have been limited to the PSL 143(2) criteria for determining significance, not the PSL 146(2) criteria. Thus, contrary to AES s assertions, the Examiners were correct in not limiting their analysis to whether the proposed amendments amounted to a revision or modification under 16 NYCRR In any event, the question whether to conduct an evidentiary hearing to develop a record on the merits of AES s proposal was rendered academic when the parties came forward with the Joint Proposal. The Joint Proposal, together with the evidence submitted in support thereof and the Examiners related findings, constitute the record on AES s certificate amendment proposal. Although an evidentiary hearing on AES s original certificate amendment application has therefore been obviated, a final Board decision on the proposed amendment is nonetheless required pursuant to PSL 146(1). In rendering a decision on the certificate amendment application, the statute directs us to make findings pursuant to PSL 146(2). Among the required findings is whether the facility is designed to operate in compliance with 19 PSL 146(2)(c)(ii), (g). -8-

9 CASE 04-F-1178 applicable State law and regulations issued thereunder including, among other matters, State environmental law. 20 AES concedes that if a proposed certificate amendment is a revision under the Article X regulations, current State environmental statutes and regulations apply to the certificate amendment proceeding. 21 AES contends, however, that where a proposed certificate amendment is a modification, PSL 146(2)(d) is not applied when determining whether to approve such an amendment. AES s argument confuses the standards and analysis governing our determination whether to hold a hearing pursuant to PSL 143(2), with the standards and analysis applicable to a final decision under PSL 146. The distinction between a revision and a modification is a regulatory distinction adopted pursuant to PSL 143(2) (and PSL 165(5) under Article X) to aid in the determination whether to hold an evidentiary hearing pursuant to PSL 143(2) (and PSL 165(5)). The determination whether to grant a certificate amendment pursuant to PSL 146 is a decision separate and distinct from the decision whether to conduct a hearing pursuant to PSL 143(2). In contrast to the regulations implementing PSL 143(2), PSL 146 itself makes no distinction between revisions and modifications, or otherwise limits the criteria to be considered under PSL 146(2) when no hearing is held pursuant to PSL 143(2). The PSL 146(2) criteria apply to final decisions on all certificate amendment applications without regard to whether a hearing was held pursuant to PSL 143(2). Thus, we are statutorily required to consider all relevant criteria enumerated under PSL 146(2), regardless of whether a proposed certificate amendment constitutes a revision or a modification under 16 NYCRR Nothing in 16 NYCRR provides criteria on a certificate amendment application different from those provided in PSL 146(2). As noted above, 16 NYCRR provides criteria for determining whether to conduct a hearing on a 20 PSL 146(2)(d). 21 AES s brief, p

10 CASE 04-F-1178 certificate amendment application, and procedures to follow depending on whether the application seeks a revision or modification, as defined by the regulations. But 16 NYCRR is otherwise silent concerning the criteria we must apply when determining whether to grant the certificate amendment application. Those criteria are supplied solely by PSL 146(2). The 1999 Amendment Order provides an illustration of our considering all relevant criteria under PSL 146(2), including whether a proposed amendment is consistent with all current State environmental law and regulations, when rendering a final decision on a certificate amendment in the absence of an evidentiary hearing. In that order, we concluded that the proposed amendment was a modification that did not require a hearing. 22 Nevertheless, we expressly concluded, among other things, that the new activities would be conducted in conformance with existing State and federal regulations, including then existing Part 360 regulations, thereby making the requisite finding pursuant to PSL 146(2)(d). 23 With respect to the disposal of CCBs from the SCR system, we required that such waste be disposed of in SWDA III, a landfill designed and constructed in full compliance with the then existing provisions of Part 360. With respect to the remainder of the waste stream, we granted all necessary variances from then existing law to allow for the continued landfilling of such waste in SWDA I and SWDA II. 24 Thus, contrary to AES s assertions, we did expressly condition the 1999 Amendment Order upon the requirement that the facility adhere to then current State environmental law and regulation, including the Part 360 regulations and their variance provisions. Similarly, when considering applications for certificate amendments under Article X, the Article X Siting Amendment Order, supra, p Id., pp. 10, Accord Case 98-F-2005, supra, Order Denying Rehearing (issued September 2, 2004), p. 11 (PSC order concluding that the 1999 Amendment Order granted all variances from Part 360 necessary as of 1999 to continue provisions of Certificate with respect to SWDAs I and II). -10-

11 CASE 04-F-1178 Board has applied all relevant criteria under PSL 168(2) -the Article X provision parallel to PSL 146(2)--when determining whether to grant a proposed amendment, even after first determining no hearing is required under 16 NYCRR Thus, AES s assertion that not all relevant criteria under PSL 146(2) are applicable to final Siting Board decisions made without a PSL 143(2) hearing comports neither with the statute nor with our practice under both Article VIII and Article X. The issue whether AES s landfill as modified under the Joint Proposal is designed to operate in compliance with applicable current State environmental law and regulations remains a relevant consideration in this certificate amendment proceeding. The landfill s compliance with applicable State environmental law and regulation was relevant both to the 1978 decision granting the original Certificate; 26 and to the proceedings leading up to the 1999 Amendment Order, which required that waste from the SCR system be disposed of in SWDA III. The PSL 146(2)(d) criteria are no less a relevant concern now that AES proposes to dispose of CCBs from the SCR system in SWDA II, which would be constructed subject to variances from the strict requirements of the current Part 360. Indeed, we anticipated this circumstance in the 1999 Amendment Order. In that order, we expressly indicated that if AES in the future sought to modify the design or use of SWDA III, or to expand the landfilling of CCB waste from the SCR system beyond the existing boundaries of SDWA III, as is proposed here, the modifications will be effectuated in compliance with 25 See Case 99-F-1625, KeySpan Energy Ravenswood Generating Station, Order Granting Amendment of Certificate of Environmental Compatibility and Public Need (issued July 23, 2002), pp. 6-7; Case 99-F-1627, New York Power Authority - Astoria Generating Facility, Order Granting Amendment of Certificate of Environmental Compatibility and Public Need (issued Jan. 28, 2004), pp. 2-3; id. (issued July 7, 2003), pp See Case 80002, N.Y.S. Electric & Gas Corp. Kintigh Station, Opinion and Order Granting Certificate of Environmental Compatibility and Public Need (issued December 29, 1978), pp. 37, See also Case 80002, Recommended Decision (issued May 11, 1978), pp

12 CASE 04-F-1178 whatever applicable regulations are then in effect. 27 Thus, we expressly indicated our understanding that any modification of the arrangement approved in the 1999 Amendment Order would be analyzed under current environmental law and regulations, as the Examiners correctly concluded in their Recommended Decision. According to AES, the reason our order directing a hearing did not prescribe examination of all the PSL 146(2) factors was that we deemed certain of those factors tangential to the purpose of the evidentiary hearing. As discussed above, however, all the 146(2) criteria were directly relevant to AES s petition; but not all of them were factual questions to be decided on the basis of evidence adduced in a hearing. Thus, for example, identification of the governing law was a legal question, not susceptible to evidentiary proof and therefore not appropriately includible among our directives to the Examiners at the time of our order. Moreover, given the state of the record at that time, we could not have foreseen AES s legal theory that current State environmental law and regulation were inapplicable in determining whether AES s proposed Certificate amendments were approvable under PSL 146(2). As noted, we had indicated in the 1999 Amendment Order that any proposal to dispose of CCBs outside of SWDA III would have to comply with State environmental law and regulation currently existing at the time of such new proposal. 28 Only after we initiated the hearing did AES adopt the legal argument that the sole standards governing certificate modification are the 1978 Certificate and 1999 Amendment Order, rather than current State environmental law and regulation. By attempting to impose that interpretation on the Joint Proposal, and thus calling into question the choice of relevant legal standards, AES compelled the Examiners to determine as a threshold matter what standards they would recommend so that we might properly evaluate the Certificate modification presented in the Joint Proposal. Accordingly, the Examiners did not err by Amendment Order, supra, p Id. -12-

13 CASE 04-F-1178 addressing whether we should accept AES s arguments and proposed conditions as part of the Joint Proposal. AES further contends that applying current State environmental law and regulations to proposed certificate amendments that constitute only modifications is inconsistent with the legislative intent of Article VIII. AES s argument is unpersuasive. Even assuming (contrary to our discussion above) that the regulatory distinction between modifications and revisions is relevant to a Siting Board determination under PSL 146 on a certificate amendment application, nothing in the statutory language or the legislative history of Article VIII supports AES s interpretation. Article VIII, like its successor Article X, provides the procedural law for the permitting of major power plants before a single State entity, the Siting Board. As the Examiners correctly noted, the Board is, in effect, the permitting authority for power plants subject to Article VIII s jurisdiction. Other than the SEQRA-like criteria provided under PSL 146(2), the substantive State law applied by the Board, as the permitting authority, is not Article VIII but the substantive environmental, public health, and safety statutes enacted by the Legislature, and the regulations duly promulgated by the legislatively authorized agencies such as DEC and the Department of Health. 29 AES notes that provisions of substantive federal law, namely the federal Clean Air Act, prescribe different standards depending upon the significance in the change proposed for a facility in cases where that statute applies. AES argues that, by analogy, we should interpret Article VIII as requiring consideration of the PSL 146(2) criteria only when the proposed certificate amendment is a revision and not a modification. We reject AES s reading of Article VIII. As previously noted, the statute does not recognize a distinction between revisions and modifications, or otherwise provide for different treatment of amendments according to that distinction. If the substantive provisions of State law provided for a distinction such as that 29 See Case 80002, Opinion and Order Granting Certificate of Environmental Compatibility and Public Need, supra, p

14 CASE 04-F-1178 cited by AES in the Clean Air Act, we would apply those provisions when applying currently existing State law and regulation. However, Article VIII creates no distinction between revisions and modifications, in the absence of such distinctions under substantive State law. We also do not accept AES s argument that PSL 141(1) can be read to permit a contrary conclusion. Under that provision, a facility granted a certificate by the Board must be built, maintained, and operated in conformity with such certificate and any terms, limitations, or conditions contained therein, provided that nothing herein shall exempt such facility from compliance with state law and regulation thereunder subsequently adopted or with municipal law and regulations thereunder not inconsistent with the provisions of such certificate. AES argues that the Examiners err to the extent they conclude that PSL 141(1) would be rendered a nullity if current law were not applicable to all amendment proceedings, because that section would be applicable to revisions for which hearings are statutorily required. It similarly contends that PSL 141(1) must be read in conjunction with other provisions of Article VIII, particularly the limits on required evidentiary hearings for amendments. AES further argues that the Examiners interpretation is contrary to the legislative intent to remove impediments to new electric generating plants particularly inasmuch as it assertedly would require that facilities with Article VIII certificates comply with all State law and regulations adopted subsequent to the issuance of the certificate. As an initial matter, PSL 141(1) cannot be read as a grandfathering provision, for it specifically provides that facilities are not exempt from subsequently adopted State laws and regulations. As such, PSL 141(1) does not support AES s premise that certificate amendments that are modifications are grandfathered from State law and regulation adopted subsequent to the certificate s issuance. As discussed above, the question whether a proposed amendment requires an evidentiary hearing is different from the questions of what law governs the amendment -14-

15 CASE 04-F-1178 and what statutory findings are needed to support it. Nothing in the language of Article VIII suggests that, when determining whether to grant AES s application to amend its Certificate, we are to pick and choose among changes in State environmental, health and safety law and regulation that have occurred since issuance of the Certificate in 1978, or even since its amendment in Moreover, while PSL 141(1) does not exempt facilities from subsequent changes in State law and regulations, neither does it automatically make facilities subject to such changes. Thus the Examiners interpretation would not necessitate modification of all extant certificates to reflect every change in law and regulation, as AES seems to assume, nor would it impair any legitimate interests of existing certificate holders. The applicability of any statutory or regulatory change to existing facilities still must be determined in accordance with settled principles governing the prospective and retrospective operation of statutory and regulatory amendments. 30 Whether to apply new laws to existing certificates involves an inquiry into legislative intent to determine whether the new laws are to be applied prospectively, or whether such changes are remedial or procedural and, thus, to be applied retroactively. 31 PSL 141(1) merely clarifies that existing certificates are not exempt from the ordinary rules governing the prospective and retroactive operation of amendments. Procedurally, a variety of mechanisms are available to subject existing certificates to changes in the law. Facilities are certainly subject to changes in law when, as in this case, their owners seek amended certificates authorizing changes in such facilities. Amendments to existing certificates based upon changes in law may also be initiated on the Board s own motion, or upon a complaint filed by any interested party. 32 All such certificate amendments would, however, be subject to changes in 30 See McKinney s Cons. Laws of N.Y., Book 1, Statutes ch See e.g., Matter of OnBank & Trust Co., 90 N.Y.2d 725, 730 (1997); Becker v. Huss Co., Inc., 43 N.Y.2d 527, 540 (1978) NYCRR (f), (h). -15-

16 CASE 04-F-1178 State laws or regulations following certificate issuance, regardless of whether the amendment falls within the so-called revision category posited by AES. Nevertheless, no such amendments could be approved except on notice to the certificate holder with an opportunity to be heard. Contrary to AES s assertions, application of changes in State law and regulation to existing facilities through the procedural mechanisms prescribed above is in no way inconsistent with the manifest purposes underlying Article VIII. On the contrary, subjecting existing facilities to changes via the procedures outlined above both protects the interests of parties that hold existing certificates, and ensures that State laws and regulations are implemented consistent with legislative intent. 33 Accordingly, AES s exception is denied. We accept and adopt the Examiners recommendations concerning identification of the applicable State law and regulations and as to the landfill s conformance with such requirements. We adopt the proposed terms, findings, and Certificate conditions subject to the Examiners recommended modifications related to those issues. 34 B. Precedential Effect of Joint Proposal (Exception No. 2) AES excepts to the Examiners recommendation that we not adopt the provision, in 1 of the Joint Proposal, purporting to limit the Joint Proposal s precedential significance. We deny the exception and adopt the Examiners recommendation, subject to clarification as set forth below. The disputed passage in 1 provides: None of the terms or provisions of this Joint Proposal and none of the positions taken herein by any party shall be referred to, cited or relied upon in any fashion as precedent or otherwise in any other proceeding before the Siting Board, the PSC or any 33 Consequently, AES s interpretation that PSL 141(1) implicitly removes certain amendments from the scope of new law and regulations could not withstand scrutiny under a realistic appraisal of the Legislature s purposes in Article VIII. Cf. Uprose et al. v. Power Authority of the State of New York et al., 285 A.D.2d 603, 606 (2d Dept. 2001). 34 Case 04-F-1178, Recommended Decision, p

17 CASE 04-F-1178 other regulatory agency or before any court of law for any purpose, except as shall be necessary to effect and/or enforce the terms and provisions of this Joint Proposal or any prior order of the PSC or Siting Board regarding the Facility. The Examiners expressed concern that, by adopting this provision, we would erroneously claim authority to preclude DEC staff, other parties, and the Board from citing this case in future proceedings. In response to the proponents theory that this case cannot be invoked as relevant precedent because it is factually unique, the Examiners reasoned that the proposed restriction therefore is all the more superfluous, and should be rejected as tending to deter the legitimate use of precedent while serving no constructive purpose. 35 On exceptions, AES reiterates that the case is unique because the Somerset Station is New York s only facility authorized pursuant to PSL Article VIII. AES says the Recommended Decision itself is more inimical to the principle of stare decisis than the proposed restriction in 1, in the sense that the Board or the PSC assertedly has adopted similar restrictions in at least ten prior cases. To begin, the ten cases cited by AES do not unequivocally support its position. One is irrelevant because the PSC in that case had to disavow any precedential intent in order to dispel the likely assumption that its decision was intended to determine a then pending generic proceeding involving the same parties and the same accounting issue. 36 In another of the cases cited, where DPS Staff raised concerns similar to those expressed by the Examiners here, the Board agreed not to adopt the disputed provision. 37 That decision alone suffices to create 35 Id., pp Case 05-S-1376, Consolidated Edison Co. of N.Y. Rates, Order Determining Revenue Requirement and Rate Design (issued September 22, 2006), p. 9, n Case 99-F-1627, supra, Opinion and Order Granting Certificate (issued October 2, 2002). As a condition of certification, the Board substituted other language proposed by DPS Staff which omitted any reference to the joint proposal s precedential effect or lack thereof. The Board offered to consider a further certificate amendment if requested, but there is no record of any such request. Id., pp

18 CASE 04-F-1178 a strong inference that similar provisions have been adopted in other cases for no reason other than that they were uncontested. In only one case cited by AES did the PSC adopt a provision almost the same as 1 in this case, and then only tacitly. 38 In the remaining seven cases cited, however, the terms adopted- unlike 1 here--included an introductory explanation that the parties had reached agreement in the context of their pending case, or an express recital that the agreement could not be invoked as precedent by the parties themselves, or a combination of those two elements. 39 In those cases where the parties have included an introductory reference to the context of the agreement, it affects the emphasis of such provisions, so that they may be read as merely acknowledging that the joint proposal is fact-specific rather than rejecting any principles of stare decisis. Likewise, in those cases where a provision like 1 recites expressly that it binds the parties--thus avoiding the implication that the restriction binds the PSC or Board as well-- such language presents another significant difference between the cited cases and this one, as similar language in 1 would have 38 Cases 01-E-0359 and 01-M-0404, N.Y.S. Electric & Gas Corp. Rates and Merger, Order Adopting Provisions of Joint Proposal (issued February 27, 2002), referencing Joint Proposal dated January 15, 2002, pp Case 05-T-1369, Consolidated Edison Co. of N.Y., Inc. Cedar Street Project, Order Adopting Terms of a Joint Proposal (issued May 17, 2006), Joint Proposal, p. 5; Case 04-T-1687, Long Island Power Authority Newbridge Road Connector, Order Adopting Terms of a Joint Proposal (issued November 23, 2005), Joint Proposal, p. 2; Case 03-T-0644, Niagara Mohawk Power Corp. 345 kv Electric Transmission Line, Order Adopting Terms of a Joint Proposal (issued March 16, 2005), Joint Proposal, pp. 2-3; Case 03-T-1385, Rochester Gas & Electric Corp. Rochester Transmission Project, Order Granting Certificate of Environmental Compatibility and Public Need (issued December 16, 2004), Case 02-T-0036, Neptune Regional Transmission System LLC 500kV Electric Transmission Cables, Opinion and Order Adopting Joint Proposal (issued January 23, 2004), Joint Proposal, p. 3; Cases 01-W-1949, 02-W-0054, and 02-W-0056, Long Island Water Co. et al., Order Adopting Joint Proposal (issued November 27, 2002), Joint Proposal, p. 8; Case 00-G-1858, National Fuel Gas Dist. Corp.- Rates, Order Adopting Terms of Joint Proposal (issued April 18, 2002), Joint Proposal, p

19 CASE 04-F-1178 dispelled the Examiners concern that the Joint Proposal purports to curtail our jurisdiction. 40 In sum, AES cites no case where the PSC or Board has endorsed a restriction similar to 1 when its validity was questioned; nor does AES cite any case where the PSC or Board has waived its authority to cite as precedent a decision adopting a joint proposal s terms, even when (as here) the restriction was not expressly limited to the parties and therefore could have been misread as a constraint on the PSC s or Board s jurisdiction to invoke its own precedents. Thus, we see no reason to reject the Examiners judgment that general principles of stare decisis will suffice to negate the precedential value of this case except in other, analogous cases, and that the provision in 1 therefore is superfluous (if not pernicious) and should be omitted from the terms we are adopting. AES s exception is denied for that reason. Moreover, a fact that escaped adequate attention in the argument before the Examiners 41 (and, perhaps as a consequence, in the Recommended Decision and in AES s argument on exceptions) is that 1 by its terms concerns only the relevance or precedential value of the Joint Proposal, as distinguished from this order adopting in part the Joint Proposal s terms. Whether the parties in future are free to cite the Joint Proposal, as distinguished from this order, is of little consequence because the Joint Proposal is superseded by the order; and because the Joint 40 That is the import of the Examiners reference to the contrast between a consent decree offered for a tribunal s approval, where the Examiners suggested the disputed provision might have been appropriate; and, on the other hand, the Joint Proposal, which they described as a proposed decision by the Board on its own initiative (Case 04-F-1178, Recommended Decision, p. 12). Regardless of how the case was initiated--which, as AES says, would be a perplexing criterion--the point is that we are issuing, on our own behalf, this order which incorporates and supersedes terms the parties agreed to submit as proposals; we are not, in contrast, deciding merely to enforce the parties mutual commitments (as in a consent decree). Thus, for example, we are not compelling DEC staff to refrain from citing today s order in future cases. 41 Case 04-F-1178, Transcript pages (Tr.) At Tr. 292 line 21, signed should be cited. -19-

20 CASE 04-F-1178 Proposal (unlike an undisclosed consent agreement) is publicly available evidence of the terms to which the parties agreed, regardless of whether they bind themselves not to cite it. We deny AES s exception for that reason as well. 42 III. OTHER PARTIES COMMENTS DEC staff s brief endorses the Examiners recommendations regarding the matters raised in AES s Exception No. 1 (above) and regarding the Joint Proposal s provisions for groundwater monitoring; and it states that the Examiners correctly understood how the proposed terms would affect disposal of CCBs with an ammonia content of two ppm or more. 43 As noted above in connection with AES s objection to arguments exceeding the scope of an exceptions brief, DEC s comments serve to clarify the record concerning the parties intentions, but our decisions are based solely on the Examiners reasoning and the considerations discussed above. The Town s brief seeks to clarify that the Town in this proceeding has not sought to close the Somerset Station, but has advocated only that the plant continue to operate in an environmentally compatible manner. 44 The Town is responding to a background discussion in the Recommended Decision where the Examiners describe the parties difficulty in devising mutually acceptable plant operating procedures. The Examiners summary recites this history in such a way as to permit a mistaken inference that the Town s concerns initially could not have been 42 In general, having had the opportunity to directly consider the matter on exceptions in this case, we see no constructive purpose that could be served by including restrictions like 1 in future joint proposals; and we remain concerned by its purported limitation upon the discretion ordinarily vested in agencies and their staffs. However, we are reluctant to simply prohibit such provisions prospectively for future cases, as a prohibition might deter negotiations and create a discrepancy between Board and PSC practice. 43 Citing Case 04-F-1178, Recommended Decision, p. 9, note Town s brief, p

21 CASE 04-F-1178 satisfied except by closing the plant. 45 We agree that the Recommended Decision is susceptible to that misinterpretation, and our adoption of the Examiners recommendations is subject to the Town s requested clarification. IV. SUMMARY AND CONCLUSIONS For the reasons stated above and in the Recommended Decision, we conclude that the record as a whole, including the prefiled testimony and exhibits, the hearing record, and the matters recited in the Joint Proposal, fully addresses the questions posed in our January 7, 2005 order initiating these hearings. Further, for the reasons stated above and in the Recommended Decision, we adopt the Joint Proposal s Proposed Findings and Proposed Ordering Clauses/Certificate Conditions to the extent recommended by the Examiners because such action would resolve the contested issues in this proceeding consistently with the evidence and the relevant provisions of PSL 146(2). 46 The Board on Electric Generation Siting and the Environment orders: 1. The Recommended Decision of Examiners Rafael A. Epstein and James T. McClymonds, to the extent consistent with this Order, is adopted and constitutes this Board's decision in this proceeding. 2. The terms and conditions of the Joint Proposal attached to this Order, to the extent they are consistent with the Examiners Recommended Decision as incorporated into this Order s provisions, are adopted and hereby incorporated and made a part of this Order. 45 Case 04-F-1178, Recommended Decision, pp For a complete statement of its terms, one must refer to the Joint Proposal itself, which accompanies this order as an attachment. -21-

22 CASE 04-F The Certificate of Environmental Compatibility and Public Need for the Somerset Generating Station is amended to permit the deposit of coal combustion byproducts in Solid Waste Disposal Area II, in compliance with the conditions and specifications in the Joint Proposal and the discussion in the Recommended Decision and this Order. 4. AES NY, L.L.C. shall file, within 30 days after the date of issuance of this Order, a written acceptance of the certificate as amended, pursuant to 16 NYCRR (b). 5. This proceeding is continued. By the New York State Board on Electric Generation Siting and the Environment (SIGNED) JACLYN A. BRILLING Secretary -22-

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