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June 29, 2011

New York State Power Plant Siting Bill Renewed

After several failed attempts over the last eight years, Governor Cuomo signed into law the Power NY Act ("Law") on June 23, 2011. The Law renews and revises the expired Article X |of the New York Public Service Law ("PSL"), which governs the siting of new and repowered electric generating facilities of 25 megawatts or larger. The Law had support from a broad base of stakeholders, including the energy industry and environmental advocates, as it seeks to balance various interests including the development of renewable energy projects and striking environmental requirements that are beyond the current regulatory standards.

As a result of the expiration of Article X in 2003, prospective applicants' only choice was to go through the long and costly process required by the State Environmental Quality Review Act ("SEQRA") to site a new electric generating facility, resulting in a void of new development since 2003. Upon the promulgation of the New York State Department of Environmental Conservation's ("NYSDEC") regulations required by the new Law, SEQRA will no longer be applicable to the siting of generating facilities. The Law provides for a two step, pre-application and application hearing process.



Application Process and Fees

Under the Law, the pre-application process begins with the submission of a preliminary scoping statement to a seven member Siting Board. The Siting Board will consist of the: chair of the Public Service Commission ("PSC"); commissioner of NYSDEC; commissioner of health; chair of the New York State Energy Research and Development Authority ("NYSERDA"); commissioner of economic development; and, two ad hoc community members appointed by the Legislature. The preliminary scoping statement must include a description of the facility and identify all environmental impacts; necessary studies; reasonable alternatives and required approvals. A fee of $350 per megawatt of generating capacity (up to a cap of $200,000) must be paid into an Intervenor Fund. This fund will be allocated by the hearing examiner appointed by the PSC. The hearing examiner will oversee the pre-application process and mediate issues related to the preliminary scoping statement, such as what type of reviews and studies the applicant will be required to complete.

An applicant must then file an application with the Siting Board that includes more detailed information, including: an environmental and health evaluation; pollution controls; security plans; an environmental justice analysis; an air quality impact analysis; community demographics; reasonable alternatives; a wholesale markets impact analysis; and consistency with New York State's Energy Plan. Another fee in the amount of $1,000 per megawatt (up to a cap of $400,000) must be paid into the Intervenor Fund. If the proposed facility will require storage or disposal of a fuel waste by-product, an additional $500 per megawatt (up to a cap of $50,000) must be included. The Intervenor Fund is capped at $750,000 for both the pre-application and application process and may be used by intervenors for expert witnesses, consultants and administrative and legal fees, excluding litigation or judicial review.

Review and Approval Process

The Siting Board must determine whether the application is complete within 60 days of its receipt, and notify the applicant, the affected municipalities and state agencies. The Siting Board will then hold a hearing, presided over by a hearing officer designated by the PSC, that allows for participation by interested parties, including: NYSDEC, the New York State Department of Economic Development, New York State Department of Health, affected municipalities, local residents and non-profit organizations.

The Siting Board must make a determination on whether to issue a certificate to construct and operate a proposed facility within 12 months of determination of a complete application. Facilities seeking to repower may utilize an expedited six month process if the repowering meets certain environmental standards, which are more stringent than require the standards applicable to facilities going through the 12 month process.

The Siting Board may issue a certificate to construct if, among other things, the proposed facility will:

  • beneficially add or substitute existing generating capacity; and
  • minimize or avoid adverse environmental impacts; and 
  • minimize or avoid adverse disproportionate environmental impacts in the area where the facility is located; and 
  • comply with all State and local laws and regulations unless found to be unreasonably burdensome.

Air and water permits required for the construction and operation of the proposed facility will be issued by NYSDEC, but must be issued within the schedule of the Article X proceeding. No other state agency or municipality can require a permit for the proposed electric generating facility.

The new Law requires NYSDEC to complete rulemakings in the areas of: environmental justice, cumulative impact analysis, and air emissions by June 23, 2012, including an explicit requirement to develop a carbon dioxide emissions performance standard for generating facilities which has been in limbo for over two years. Given that it may take up to another year for NYSDEC to complete the mandated rulemakings, prospective applicants may be forced to delay an application or file under SEQRA.

The renewal of the Article X siting law is a welcome change in New York for the development or repowering electric generation projects.

Unfortunately, it looks like prospective applicants will have to wait another year to take advantage of the new Law. 

If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact any of the members of the Practice Area.


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