Connecticut Siting Council Docket 192B Final Decision

[Page 1] DOCKET 192B- CPV Towantic, LLC Motion to Reopen and Modify } Connecticut the June 23, 1999 Certificate of Environmental Compatibility and Public Need based on changed conditions pursuant to Connecticut } Siting General Statutes §4-181a(b) for the construction, maintenance and operation of a 785 MW dual-fuel combined cycle electric generating } Council facility located north of the Prokop Road and Towantic Hill Road intersection in the Town of Oxford, Connecticut. May 14, 2015 Findings of Fact I. INTRODUCTION A. Proceedings 1. On June 23, 1999, the Connecticut Siting Council (Council) granted a Certificate of Environmental Compatibility and Public Need (Certificate) to Towantic Energy, LLC for the construction, maintenance, and operation of a 512 megawatt (MW) electric generating facility located approximately 4,000 feet north of the Prokop Road and Towantic Hill Road intersection in the Town of Oxford, Connecticut. A Development and Management Plan (D&M Plan) for construction of the facility was approved by the Council on March 1, 2001. (Council Administrative Notice Item No. 40) 2. On February 2, 2012, CPV Towantic Holding Company, LLC and Towantic Energy Holdings, LLC, the parent company of Towantic Energy, LLC, entered into an agreement pursuant to which CPV Towantic Holding Company, LLC acquired a majority interest in Towantic Energy, LLC. Thereafter, Towantic Energy, LLC was renamed CPV Towantic, LLC (hereinafter referred to as “CPV” or “Certificate Holder”). On April 12, 2012, pursuant to a Notification of Name Change submitted by the Certificate Holder on March 7, 2012, the Council approved the transfer of the Certificate to CPV. The transfer of the Certificate was conditioned upon the consent of CPV to comply with the terms, limitations and conditions contained in said Certificate and on the timely payment of apportioned assessment charges for the facility under Connecticut General Statutes (C.G.S.) §16-50v. (Council Administrative Notice Item No. 40) 3. On November 3, 2014, the Certificate Holder submitted to the Council and the service list for the original Docket 192 proceeding a Petition to Reopen and Modify the June 23, 1999 Certificate based on changed conditions pursuant to C.G.S. §4-181a(b) (Motion to Reopen). The Motion to Reopen was submitted with an Environmental Overview in Support of Petition for Changed Conditions (EOSPCC) and a report on the New England Wholesale Power Market Changes from 1999-present (NEWPMC). On November 4, 2014, the Council sent a memo to the service list for the original Docket 192 proceeding requesting comments or statements of position in writing by November 12, 2014. (CPV 1; CSC Memorandum re Docket 192B, dated November 4, 2014) 4. At a meeting held on November 13, 2014, the Council voted to grant the Certificate Holder’s Motion to Reopen. As part of the vote, the Council reopened Docket 192 in its entirety and did not limit the proceedings to the changed conditions presented in the Motion to Reopen. (CSC Memorandum re Docket 192B, dated November 4, 2014) 5. At a meeting held on December 11, 2014, the Council voted to approve the schedule for processing Docket 192B with a public field review and public hearing in the Town of Oxford on January 15, 2015. (CSC Meeting Minutes, December 11, 2014). [Page 2] Docket 192B – CPV Towantic Findings of Fact Page 2 6. On December 18, 2014, the Council held a pre-hearing conference on procedural matters for parties and intervenors to discuss the requirements for pre-filed testimony, exhibit lists, administrative notice lists, expected witness lists, filing of pre-hearing interrogatories and the logistics of the public inspection of the site scheduled for January 15, 2015 at the office of the Council, 10 Franklin Square, New Britain, Connecticut. (CSC Pre-Hearing Conference Memoranda, dated December 12, 2014 and December 19, 2014). 7. The Council and its staff conducted a public inspection of the site on January 15, 2015, beginning at 1:30 p.m. During the field inspection, the Certificate Holder flew a red balloon with a diameter of approximately five feet at each of the proposed stack locations to simulate the height of the proposed stacks. During the field review, the balloons reached a height of 980 feet above mean sea level (amsl), which is the 150-foot stack height above the proposed final grade level. The Federal Aviation Administration (FAA) asked CPV not to launch the balloons until after sunrise at 7:30 a.m. so as not to interfere with visibility at the nearby Waterbury-Oxford airport. Accordingly, the first balloon was raised at 7:35 a.m., and the second balloon was raised at 8:05 a.m. The balloons were aloft until 4:00 p.m. for the convenience of the public. The weather conditions for the balloon flight were relatively favorable, with lighter winds than anticipated as well as clear visibility. (Council’s Pre-Hearing Memorandum, dated December 19, 2014; Transcript 01/15/15, 3:05 p.m. [Tr. 1], pp. 39-40) 8. Pursuant to Section 16-50j-21 of the Regulations of Connecticut State Agencies (RCSA), the Certificate Holder erected a sign at the site north of the Prokop Road and Towantic Hill Road intersection on December 30, 2014. Specifically, the sign was located just north of the Spectra access road on the eastern side of Woodruff Hill Road. The sign presented information regarding the project and the Council’s public hearing. (CPV 10c; CPV 12, response 1) 9. Pursuant to C.G.S. § 16-50m, the Council, after giving due notice thereof, held a public hearing on Thursday, January 15, 2015, beginning with an evidentiary session at 3:00 p.m., and continued with a public comment session at 6:30 p.m., at the Oxford High School, Auditorium, 61 Quaker Farms Road, Oxford, Connecticut. (Council's Hearing Notice dated December 12, 2014; Tr. 1, p. 3; Transcript 01/15/15, 6:30 p.m. [Tr. 2], p. 5) 10. The evidentiary hearings were continued on January 29, February 10, 24, March 12, 24, and 26, 2015 at the office of the Council, 10 Franklin Square, New Britain, Connecticut. (Tr. 2, p. 261; Transcript 01/29/15 [Tr. 3], p. 355; Transcript 02/10/15 [Tr. 4], p. 539; Transcript 02/24/15 [Tr. 5], p. 742; Transcript 03/12/15 [Tr. 6], p. 1; Transcript 03/24/15 [Tr. 7], p. 1; Transcript 03/26/15 [Tr. 8], p. 1) [Page 3] Docket 192B – CPV Towantic Findings of Fact Page 3 11. CPV Towantic, LLC is the Certificate Holder. Other parties and intervenors to this proceeding are as follows: Party Intervenor Jay Halpern – Citizens for Defense of Oxford Town of Middlebury Town of Oxford The Connecticut Light and Power Company* Naugatuck Valley Chapter Trout Unlimited Raymond Pietrorazio The Pomperaug River Watershed Coalition Town of Southbury GE Energy Financial Services, Inc. Borough of Naugatuck and the Borough of Naugatuck Water Pollution Control Authority Wayne McCormack Naugatuck River Revival Group, Inc. Westover Hills Subdivision Homeowners Westover School Greenfields, LLC and Marian Larkin Lake Quassapaug Association, LLC Middlebury Land Trust, Inc. Quassy Amusement Park Middlebury Bridle Land Association Dennis Kocyla Naugatuck Valley Audubon Society Oxford Flying Club *The Connecticut Light and Power Company changed its name to The Connecticut Light and Power Company d/b/a Eversource Energy (Eversource). (Tr. 6, p. 31; Record) 12. During a meeting held on December 11, 2014, a meeting held on January 8, 2015 and the public hearing held on January 15, 2015, the Council grouped the following parties and intervenors pursuant to C.G.S. §16-50n(c): a. The Pomperaug River Watershed Coalition (PRWC); the Naugatuck Valley Chapter of Trout Unlimited (NVCTU); the Naugatuck River Revival Group (NRRG); Lake Quassapaug Association, LLC (LQA); the Middlebury Bridle Land Association (MBLA); Dennis Kocyla; and the Naugatuck Valley Audubon Society (NVAS) (hereinafter referred to as the “Community Group”); and b. Mr. Ray Pietrorazio; the Town of Middlebury; and the Middlebury Land Trust (MLT), (hereinafter referred to as the “Middlebury Group”) (Council Meeting Minutes dated December 11, 2014; Council Memorandum dated December 12, 2014; Council Meeting Minutes dated January 8, 2015; Council Memorandum dated January 16, 2015) [Page 4] Docket 192B – CPV Towantic Findings of Fact Page 4 B. State Agency Comments 13. Pursuant to C.G.S. §16-50j (g), on December 12, 2014 and March 27, 2015, the following state agencies were requested to submit written comments regarding the reopened proceeding: Department of Energy and Environmental Protection (DEEP); Department of Agriculture (DOAg); Department of Public Health (DPH); Council on Environmental Quality (CEQ); Public Utilities Regulatory Authority (PURA); Office of Policy and Management (OPM); Department of Economic and Community Development (DECD); Department of Emergency Services and Public Protection (DESPP); Department of Consumer Protection (DCP); Department of Labor (DOL); Department of Construction Services (DCS); Department of Transportation (DOT); the Connecticut Airport Authority (CAA) and the State Historic Preservation Office (SHPO). (Council Hearing Package, dated December 12, 2014; CSC Memorandum Re State Agency Comments, dated March 27, 2015) 14. On December 29, 2014, the Council received comments from the CAA requesting the Certificate Holder provide a copy of the FAA Form 7460 – “Notice of Proposed Construction or Alteration” - and a copy of any plume drift analysis. (CAA Comments, dated December 26, 2014) 15. On January 7, 2015, the Council received comments from the DPH indicating that the project is not within a public water supply source water area and that, since the project proposes to connect to the Heritage Village Water Company (HVWC) public water system to obtain process water and drinking water, the project must comply with the backflow prevention requirements, must have annual tests performed by a certified DPH Backflow Prevention Device Tester and must perform inspections by a certified DPH Cross Connection Survey Inspector. DPH further recommended that the Certificate Holder demonstrate the proposed facility minimizes the use of potable water and optimizes water conservation opportunities. (DPH Letter dated January 7, 2015) 16. On January 28, 2015, the Council received comments from the DEEP noting the benefits provided by the facility’s use of dual-fuel capability, suggesting the investigation of opportunities to augment the volume of on-site water and ultra-low sulfur distillate (ULSD) storage for contingencies, recommending establishment of wetland vegetation in the bottoms of the two proposed stormwater treatment basins as a mitigation measure and identifying the following permit requirements: a. New Source Review permits for the two combustion turbines, the emergency diesel generator, the diesel fire pump and the natural gas-fired auxiliary boiler; b. Title V Permit to be issued after the facility goes into operation; c. Wastewater Discharge Permit to be issued after the facility goes into operation; d. General Permit for the Discharge of Stormwater and Dewatering Wastewaters from Construction Activities or a General Permit for the Discharge of Stormwater Associated with Industrial Activities to be applied for prior to commencement of construction activities; and e. Section 401 Water Quality Certification under the Army Corps of Engineers (ACOE) Programmatic General Permit. (DEEP Letter dated January 28, 2015) 17. On March 6, 2015, the Council received comments from the SHPO indicating that no historic properties would be affected by construction of the facility. (SHPO Letter dated March 4, 2015) 18. On April 27, 2015, the Council received additional comments from the CAA noting that a number of FAA Form 7460 studies are still pending regarding the impact of CPV’s proposed structures. CAA requests that the Council seek to further extend its decision deadline until the FAA’s study results have been published and reviewed. (CAA Comments, dated April 27, 2015) [Page 5] Docket 192B – CPV Towantic Findings of Fact Page 5 19. The following agencies did not respond to the Council’s request for comment on the reopened proceeding: DOAg, CEQ, PURA, OPM, DECD, DOT, DESPP, DCP, DOL and DCS. (Record) C. Certificate Status Jurisdiction, General 20. The Council has exclusive jurisdiction over electric generating facilities pursuant to C.G.S. §16-50i(a)(3) of the Public Utility Environmental Standards Act. Under C.G.S. §16-50k, “… no person shall… commence the preparation of the site for, commence the construction or supplying of a facility… that may, as determined by the Council, have a substantial adverse environmental effect in the state without first having obtained a certificate of environmental compatibility and public need… issued with respect to such facility… by the Council.” (C.G.S. §16-50i(a)(3); C.G.S. §16-50k(a); C.G.S. §16-50x) 21. The Certificate issued by the Council on June 23, 1999 for the construction, maintenance and operation of a 512 MW electric generating facility located approximately 4,000 feet north of the Prokop Road and Towantic Hill Road intersection in the Town of Oxford, Connecticut is valid until June 1, 2016. (Council Administrative Notice Item No. 40 ) Development and Management Plan 22. On October 20, 2000, the Certificate Holder submitted and sought approval of the D&M Plan for the approved facility in accordance with Condition No. 2 of the Council’s June 23, 1999 Decision and Order (D&O). (Council Administrative Notice Item No. 40) 23. On November 2, 2000, the Town of Middlebury, Citizens for Defense of Oxford, Naugatuck Valley Chapter of Trout Unlimited, William Stowell and Mira Schachne (Petitioners) submitted a petition for a declaratory ruling that the D&M Plan is inconsistent with the Council’s D&O. At a meeting held on November 2, 2000, the Council requested parties and intervenors to Docket 192 submit comments on the D&M Plan and on the petition for a declaratory ruling. (Council Administrative Notice Item No. 47) 24. On November 22, 2000, January 19, January 23 and February 13, 2001, the Certificate Holder submitted responses to interrogatories and comments on the petition for a declaratory ruling, as well as submitted the draft air and waste discharge permits and the final Federal Aviation Administration (FAA) determination. On December 15, 2000, the Certificate Holder submitted a revised D&M Plan. (Council Administrative Notice Item No. 47) 25. On March 8, 2001, the Council found that the D&M Plans were consistent with the Council’s D&O, state policy and municipal orders, determined that the D&M Plans were protective of the environment, offering reasonable and adequate mitigation, and approved the D&M Plans. The Council also denied the petition for a declaratory ruling submitted by the Petitioners. (Council Administrative Notice Item No. 47) 26. The Petitioners appealed from the Council’s decision to deny the petition for a declaratory ruling. The appeal was dismissed by the Connecticut Superior Court on February 27, 2002. The Court found that the Council did not act unreasonably, arbitrarily, illegally or in abuse of its discretion in denying the petition for a declaratory ruling. (Council Administrative Notice Item No. 47; Town of Middlebury, et al v. Connecticut Siting Council, 2002 Conn. Super. LEXIS 610 (Conn. Super. Ct. 2002)) [Page 6] Docket 192B – CPV Towantic Findings of Fact Page 6 Requests for Extensions 27. Pursuant to Condition No. 9 of the Council’s D&O, unless otherwise approved by the Council, the D&O shall be void if all authorized construction was not completed within four years of the effective date of the D&O or within four years after all appeals of the D&O have been resolved. (Council Administrative Notice Item No. 40) 28. An appeal to the Connecticut Superior Court was taken by Citizens for the Defense of Oxford (CDO) from the Council’s decision approving Docket 192. CDO asserted that the Council made two errors of law: first, in failing to find a need for the facility as a necessary precursor to its finding a public benefit of the facility; and, second, in failing to require the Certificate Holder to provide it with information about the impact of the proposed withdrawal of water from the Pomperaug River by the proposed facility. This appeal was dismissed on November 14, 2000. The dismissal was further appealed to the Connecticut Appellate Court, but the appeal was withdrawn on or about May 19, 2001, thus establishing a facility construction deadline of May 29, 2005 in accordance with Condition No. 9 of the Council’s D&O. (Council Administrative Notice Item No. 40; Citizens for Defense of Oxford v. Connecticut Siting Council, 2000 Conn. Super. LEXIS 2994 (Conn. Super. Ct. 2000)) 29. On December 3, 2003, the Certificate Holder filed a request to extend the Certificate deadline 45 months beyond the final resolution of the pending appeal of the Department of Environmental Protection (DEP) air emission permits. This would allow the Certificate Holder to complete an electrical interconnection agreement with the independent system operator and provide the time needed to secure financing. On March 4, 2004, the Council granted a 13-month extension of the Certificate deadline to June 26, 2006. This extension was granted to coincide with the DEP air emission permit deadline, the date by which the Certificate Holder would need to refile its Best Available Control Technology analysis for air emissions. (Council Administrative Notice Item No. 40) 30. On September 28, 2005, the Certificate Holder filed a motion to reopen Docket No. 192 to eliminate the dual-fuel capability requirement and to eliminate the current deadline for construction. On November 17, 2005, the Council denied the Certificate Holder’s request to reopen and made its own motion to reopen Docket No. 192 on changed conditions pursuant to C.G.S. §4-181a(b). On December 20, 2005, Calpine, the parent owner of Towantic Energy, LLC, submitted a bankruptcy filing with the United States Bankruptcy Court, a type of filing that automatically stays all administrative proceedings. On April 20, 2006, the Certificate Holder advised the Council that it had sought relief from the automatic stay from the United States Bankruptcy Court and requested a 90-day extension of the Certificate deadline. On May 17, 2006, the Council considered the Motion for Relief from the Automatic Stay granted by the United States Bankruptcy Court and granted a 90-day extension of the Certificate deadline to September 26, 2006. (Council Administrative Notice Item No. 40; Council Administrative Notice Item No. 41) 31. On April 22, 2006, the Certificate Holder and Intervenor General Electric Energy Financial Services (GE-EFS) jointly submitted a filing with the Council stating that GE-EFS was investigating a possible purchase of the Certificate from the Certificate Holder. The Certificate Holder further stated that GE- EFS needed to complete comprehensive research and analysis of the project data, including a review of the project’s status and economics, and gain approval by senior management before proceeding with the purchase. Consequently, the Certificate Holder and GE-EFS requested a 120-day extension of the Certificate deadline from September 26, 2006 to January 24, 2007. On August 31, 2006, the Council granted this extension. (Council Administrative Notice Item No. 40) [Page 7] Docket 192B – CPV Towantic Findings of Fact Page 7 32. On December 7, 2006, the Town of Middlebury, Raymond Pietrorazio, Citizens for Defense of Oxford, Mira Schachne and William Stowell (Petitioners) filed a petition for a declaratory ruling with the Council requesting the Council to rule that its prior extensions of the Docket 192 Certificate were void and that, since the power plant had still not yet been built, the Certificate had expired. On January 4, 2007, the Council denied the petition on the following bases: a. C.G.S. §16-50p(a)(1) gives the Council the discretion to insert time limits in its approvals; b. If the Council inserted a time limit without the words, “Unless otherwise approved by the Council,” or similar words fulfilling the same function, the amendment procedure of C.G.S. §16-50k(c) and C.G.S. §16-50l(d), and the changed conditions provisions of C.G.S. §4- 181a(b) would be the only means of extending such time limits; c. If the above-cited statutory provisions were the only means of extending the time limits, even with the language, “Unless otherwise approved by the Council,” the phrase would be meaningless surplusage; d. By inserting the language, “Unless otherwise approved by the Council,” the Council intended to be able to extend the time limit in the Docket 192 Decision without amending or modifying that decision and did make such reservation; e. C.G.S. §16-50p(a)(1) permits such a time limitation with a reservation to extend; and f. The time extensions rendered by the Council in Docket 192 are valid and any extension of the Certificate is likewise valid. (Council Administrative Notice Item No. 48) 33. The Petitioners appealed from the Council’s denial of the petition for a declaratory ruling. The appeal was dismissed by the Connecticut Superior Court on November 1, 2007. The Court found nothing in the statutes negating the ability of the Council to make a flexible deadline a “condition” of a Certificate under C.G.S. §16-50p(a) rather than a matter for amendment. (Council Administrative Notice Item No. 48; Town of Middlebury, et al v. Connecticut Siting Council, 2007 Conn. Super. LEXIS 2897 (Conn. Super. Ct. 2007)) 34. On January 18, 2007, the Council granted an extension of the Certificate to include completion of construction of the electric generating facility not later than January 24, 2011, with the condition that GE Energy Financial Services, Inc. and/or any of its subsidiaries complete the acquisition of Towantic Energy LLC or the Certificate not later than January 24, 2008. (Council Administrative Notice Item No. 40) 35. On September 17, 2007, Towantic Energy Holdings, LLC, an affiliate of GE Energy Financial Services, Inc. purchased 100 percent of the membership interests in Towantic Energy, LLC. (Council Administrative Notice Item No. 40) 36. On October 20, 2010, the Certificate Holder filed a request to extend the Certificate deadline to June 1, 2016 to obtain a power purchase agreement and complete construction of the facility. On November 8, 2010, the Council granted an extension of the Certificate deadline to June 1, 2016. (Council Administrative Notice Item No. 40) 37. The Certificate Holder, as part of its November 4, 2014 Motion to Reopen, requests an extension of the construction deadline to June 1, 2019 to provide reasonable time to permit, engineer, finance, and construct the updated facility. (CPV 1, Motion to Reopen, p. 14) [Page 8] Docket 192B – CPV Towantic Findings of Fact Page 8 Reopenings Docket 192A 38. On November 17, 2005, the Council denied the Certificate Holder’s request to reopen Docket No. 192 to eliminate the dual-fuel capability requirement and to eliminate the current deadline for construction, and made its own motion to reopen under C.G.S. §4-181a(b) to consider whether changed conditions existed to justify reversing or modifying the Council’s June 23, 1999 final decision in this docket. (Council Administrative Notice Item No. 41) 39. Public Hearings were held on August 29, 2006 and November 2, 2006 at which time the Council heard evidence on whether the following changed conditions justified reversing or modifying the June 23, 1999 Certificate: a. Changes in financing and market conditions for power purchases; b. Certificate banking (whether the Certificate Holder has a sincere desire to build the plant or is merely holding the certificate as an asset); c. Traffic impact; d. Natural gas supply and cost; e. Status of air emission permits; f. Condition of buy-out with the Town of Oxford (status of possible business transaction(s) involving the Town of Oxford); g. Financial support of the Pomperaug River Watershed Coalition; h. Elimination of dual-fuel capability; i. Vertical exhaust plume effects on aviation in light of changes at the Waterbury/Oxford Airport and changes in FAA requirements, permits and studies; j. Waterbury/Oxford Airport Noise Study; k. Extension of the construction schedule; l. Regional Greenhouse Gas Initiative; and m. Federal Energy Regulatory Commission (FERC) approved forward capacity auction. (Council Administrative Notice Item No. 41) 40. In its decision on the reopened proceeding, the Council found that the need for the facility, extension