Connecticut Siting Council Docket 470 Final Decision

[Page 1] DOCKET NO. 470 – NTE Connecticut, LLC application for a } Connecticut Certificate of Environmental Compatibility and Public Need for the construction, maintenance, and operation of a 550-megawatt dual-fuel } Siting combined cycle electric generating facility and associated electrical interconnection switchyard located at 180 and 189 Lake Road, } Council Killingly, Connecticut. May 11, 2017 Findings of Fact Introduction 1. Pursuant to Connecticut General Statutes (C.G.S.) §16-50g et seq., on August 17, 2016, NTE Connecticut, LLC (NTE or Applicant) applied to the Connecticut Siting Council (Council) for a Certificate of Environmental Compatibility and Public Need (Certificate) for the construction, maintenance, and operation of a 550-megawatt (MW) combined cycle electric generating facility and associated electrical interconnection switchyard located at 180 and 189 Lake Road, Killingly. (NTE 1, Vol. 1, p. 1) 2. NTE is a Delaware Limited Liability Company with principal offices located at 24 Cathedral Place, Suite 300, St. Augustine, Florida. NTE, an affiliate of NTE Energy, LLC (NTE Energy), is focused on the goal of developing, constructing, owning, and operating power projects across the United States. (NTE 1, Vol. 1, p. 1) 3. NTE Energy has thousands of MW under development, with two projects under construction in Ohio and North Carolina, both of which will begin operation in 2018. Both are natural gas-fueled combined cycle plants approximately 450 MW each. (NTE 1, Vol. 1, p. 2; Transcript 11/15/16 [Tr. 3], p. 3, p. 407; Transcript 01/26/17, 11:01 a.m., [Tr. 7], p. 1047-1048) 4. The purpose of the proposed project is to develop and operate an independent power production facility in the wholesale electric power market operated by ISO New England, Inc. (ISO-NE). (Tr. 7, p. 1047) 5. NTE’s proposed facility is referred to as the Killingly Energy Center (KEC or Project). (NTE 1, Vol. 1, p. ES-1) 6. While KEC would connect to the electric transmission system, KEC itself is not an electric transmission facility within the meaning of C.G.S. §16-50i(a)(1). KEC is an electric generating facility under C.G.S §16-50i(a)(3). (C.G.S. §16-50i; NTE 1, Vol. 1, p. 1) 7. The parties in this proceeding are NTE, Not Another Power Plant (NAPP), the Town of Killingly (Town), Sierra Club (SC)*, Connecticut Fund for the Environment (CFE), and Wyndham Land Trust, Inc. (WLT). (Transcript 1, October 20, 2016, 6:30 p.m. [Tr. 1], pp. 6-7; Transcript 2, November 3, 2016, 11:02 a.m. [Tr. 2], pp. 152-158; Council Memorandum dated November 7, 2016, pp. 1-2; Council Party/Intervenor Status Decision Letter to NAPP dated September 30, 2016) *SC’s party status was contingent upon SC’s counsel submitting an application pursuant to Connecticut’s amended Pro Hac Vice Rule, which was submitted on December 23, 2016. (Record) [Page 2] Docket 470 – NTE Findings of Fact Page 2 8. Pursuant to C.G.S. §22a-19, the Council granted NAPP, SC and WLT Connecticut Environmental Policy Act intervenor status. (Tr. 2, pp. 152-154, 157-158; Council Memorandum dated November 7, 2016, pp. 1-2; Council Party/Intervenor Status Decision Letter to NAPP dated September 30, 2016) 9. On November 3, 2016, the Council grouped the following Parties with the same interests pursuant to C.G.S. §16-50n(c): NAPP, SC and WLT (Grouped Party). (Tr. 2, pp. 153-154, and 158; Council Memorandum dated November 7, 2016, pp. 1-2) 10. Pursuant to C.G.S. §16-50l(b), public notice of intent to file the application with the Council was published in The Bulletin on August 15, 2016 and August 16, 2016. (NTE 1, Vol. 1, p. 7; NTE 1, Vol. 2, Appendix A – Notice and Service Documentation) 11. Pursuant to C.G.S §16-50l(b), notice of the application was provided to all abutting property owners by certified mail on or about August 15, 2016. Return receipts were received from all abutters. (NTE 1, Vol. 1, p. 7; NTE 1, Vol. 2, Appendix A – Notice and Service Documentation; NTE 7, response 2; NTE 14, response 70 – Abutters Map) 12. NTE provided notice to all federal, state and local officials and agencies listed in C.G.S. §16-50l(b). (NTE 1, Vol. 1, pp. 6-7; NTE 1, Vol. 2, Appendix A – Notice and Service Documentation) Council Procedures 13. On August 19, 2016, the Council sent a letter to the State Treasurer, with a copy to the Chief Elected Officials of the Towns of Killingly, Putnam and Pomfret, stating that $25,000 was received from NTE and deposited in the Office of the State Treasurer’s Municipal Participation Account for any of these three municipalities to apply for a portion of the funds if they become participants in the proceeding, pursuant to C.G.S. § 16-50bb. (Record) 14. During a regular Council meeting on September 15, 2016, the application was deemed complete pursuant to Regulations of Connecticut State Agencies (R.C.S.A) §16-50l-1a and the public hearing schedule was approved by the Council. (Record) 15. Pursuant to C.G.S §16-50m, the Council published legal notice of the day and time of the public hearing in The Bulletin on September 19, 2016. (Record) 16. On September 28, 2016, 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 October 20, 2016 at the office of the Council, 10 Franklin Square, New Britain, Connecticut. (CSC Pre-Hearing Conference Memoranda, dated September 20, 2016 and September 29, 2016). 17. Pursuant to R.C.S.A § 16-50j-21, on October 4, 2016, NTE erected two signs along Lake Road: one at 180 Lake Road and one at 189 Lake Road. The signs presented information regarding the project and the Council’s public hearing. (NTE 11; Tr. 2, p. 180) [Page 3] Docket 470 – NTE Findings of Fact Page 3 18. The Council and its staff conducted a public inspection of the 180 and 189 Lake Road, Killingly sites on October 20, 2016, beginning at 3:30 p.m. During the field inspection, NTE flew a red balloon with a diameter of approximately 3.5 to 4 feet at the proposed heat recovery steam generator (HRSG) stack location to simulate the height of the proposed stack. During the field review, the balloon was raised to a height of 465 feet above mean sea level (amsl), which is the 150-foot stack height above the proposed final grade level*. The balloon was aloft from approximately 8:00 a.m. until 6:00 p.m. for the convenience of the public. The weather conditions for the balloon flight were clear with light winds in the morning, but increased winds later in the day. Overall, visibility conditions were favorable. *The length of the balloon’s string was 167 feet, which is 150 feet for the HRSG stack plus the 17- foot difference between the proposed grade of 315 feet amsl and existing grade of 298 feet amsl. The top of the balloon was higher because of its diameter. (Council Hearing Notice dated September 16, 2016; Tr. 2, pp. 178-180; Tr. 3, pp. 362-363; NTE 1, Vol. 1, pp. xii and 32; NTE 9 – Site Walk Plan; Tr. 2. 180) 19. Pursuant to C.G.S. § 16-50m, the Council, after giving due notice thereof, held a public comment session on Thursday, October 20, 2016 at 6:30 p.m. at the Killingly High School, Auditorium, 226 Putnam Pike, Killingly, Connecticut and an evidentiary session on Thursday, November 3, 2016 at 11:00 a.m. at the Council’s offices at 10 Franklin Square, New Britain, Connecticut. (Council's Hearing Notice dated September 16, 2016; Tr. 1, p. 1; Tr. 2, p. 147) 20. The evidentiary hearings were continued on November 15, 2016, December 15, 2016*, January 10, 2017, and January 26, 2017 at the office of the Council, 10 Franklin Square, New Britain, Connecticut. *On December 15, 2016, the Council held a public evidentiary session beginning at 11:00 a.m. and a closed evidentiary session beginning at approximately 1:00 p.m. (Tr. 3, p. 356; Transcript 12/15/16, 11:00 a.m., [Tr. 4], p. 583; Redacted Transcript 12/15/16, 1:02 p.m., [Tr. 5], p. 688; Transcript 01/10/17, 11:00 a.m., [Tr. 6], p. 823; Tr. 7, p. 1017) 21. The closed evidentiary session pertained to confidential, market-sensitive and proprietary information exempt from public disclosure under the Connecticut Freedom of Information Act and subject to a protective order issued by the Council on November 3, 2016. Parties, intervenors and their witnesses who signed a non-disclosure agreement, the applicant, Council members and Council staff were in attendance. (Protective Order, November 3, 2016; Tr. 5, pp. 692-693) 22. Pursuant to C.G.S. § 16-50p(a), on January 12, 2017, the Council requested consent to extend the 180-day deadline to render a decision on this application from February 13, 2017 until May 15, 2017. On January 12, 2017, NTE consented to extend the deadline to render a decision until April 15, 2017. (Council Request for Extension of Time Letter dated January 12, 2017; NTE Consent to Extension of Time Letter dated January 12, 2017) 23. On February 13, 2017, NTE filed a Motion to Reopen the Evidentiary Record (Motion to Reopen) for the limited purpose of introducing evidence related to the results of the Forward Capacity Auction (FCA) conducted by ISO-NE on February 6, 2017 and NTE’s participation in that auction. On March 3, 2017, the Council granted NTE’s Motion to Reopen and scheduled an additional evidentiary hearing for March 23, 2017. (Council Memorandum dated February 14, 2017; Council Memorandum dated March 3, 2017) [Page 4] Docket 470 – NTE Findings of Fact Page 4 24. Pursuant to C.G.S. § 16-50p(a), on March 10, 2017, the Council requested consent to extend the deadline to render a decision on this application from April 15, 2017 until June 1, 2017. On March 10, 2017, NTE consented to extend the deadline to render a decision until June 1, 2017. (Council Second Request for Extension of Time Letter dated March 10, 2017; NTE Second Consent to Extension of Time Letter dated March 10, 2017) 25. An evidentiary hearing on the reopened record was held on March 23, 2017 at the office of the Council, 10 Franklin Square, New Britain, Connecticut. (Transcript 03/23/17, 12:59 p.m., [Tr. 8], p. 1139) Municipal Consultation and Community Outreach 26. Since January 2016, NTE met with municipal officials and commissions in the towns of Killingly, Pomfret and Putnam, state legislators and members of the surrounding community. (NTE 5, p. 4, Attachment 7; NTE 10; Tr. 7, pp. 1046-1047) 27. NTE has developed and maintained a project website to promote awareness of the project. The website contains the Application, the project schedule, contact information and forms, reports, technical information, presentations, and other news and announcements about the KEC facility proposal. The reports include the KEC technical report, the wetland report, the visual, sound, and traffic impact reports, the geotechnical and hydrogeologic reports, the Environmental Justice Report, among others. (NTE 29, pp. 12-13; NTE 29, Appendix K) 28. Maps, plans, studies, and reports were published on the KEC website (www.killinglyenergycenter.com) with hard copies of this information made available for review at the Killingly Town Hall and Killingly Public Library. (NTE 1, Vol. 1, p. 6) 29. In accordance with C.G.S. § 16-50 l (e), NTE formally commenced the 60-day pre-application municipal consultation process by providing copies of the technical report to municipal officials in Killingly, Pomfret*, and Putnam* on May 4, 2016. *The municipalities of Pomfret and Putnam are located within 2,500 feet of the proposed site. (NTE 1, Vol. 1, Figure 2-1; NTE 1, Vol. 1, p. 6; C.G.S. § 16-50l (e)) 30. On March 8, 2016, NTE made a presentation to the Killingly Town Council about the KEC project. (NTE 5, Attachment 7; NTE 29, p. 17; NTE 10) 31. NTE held public information meetings on March 22, 2016 and May 4, 2016. Both meetings were held at the Golden Eagle at the Laurel House Restaurant and Banquet Facility at 8 Tracy Road in Dayville. NTE held additional public information meetings on July 11, 2016 and October 19, 2016 at the Killingly High School. Notice of these meetings were sent to over 300 community members, organizations, businesses, abutting landowners, and municipal and state officials, was published in a local newspaper, and posted on the subject property in accordance with Environmental Justice requirements. (NTE 1, Vol. 1, p. 6; NTE 7, response 3; Tr. 7, p. 1046) 32. In late June 2016, NTE posted a sign on the subject property for the KEC. The sign identified the “Proposed Site” for KEC and provided contact information. This sign is separate from and in addition to the sign required by the Council. (NTE 1, Vol. 1, p. 6; Tr. 7, pp. 1044-1045, 1082) 33. On July 19, 2016, NTE presented its KEC proposal at a joint meeting of the Killingly Planning & Zoning Commission and Inland Wetlands & Watercourses Commission. (NTE 1, Vol. 1, p. 6) [Page 5] Docket 470 – NTE Findings of Fact Page 5 34. By letter dated August 14, 2016, the Pomfret Conservation Commission expressed concerns about the KEC project including, but not limited to, wetland filling, tree clearing, water consumption in the context of the Quinebaug River, air emissions, and air emissions-related health concerns. (Pomfret Conservation Commission Comments dated August 14, 2016) 35. By letter dated December 15, 2016, the Killingly Town Council (Town Council), while not taking an official position on the KEC project, expressed its support for the Town’s Municipal Regulate and Restrict Orders. The Town Council also expressed concerns about the amount of water required to supply KEC and the possible impacts of such water use on the Town. If the project is approved, the Town Council requests that the Council require NTE to investigate and utilize some alternative to potable water. (Town 6, pp. 1-2) 36. C.G.S. § 22a-20a and DEEP’s Environmental Justice Guidelines require applicants seeking a permit from DEEP or the Council for a new or expanded facility defined as an “affecting facility” that is proposed to be located in an environmental justice community to file an Environmental Justice Public Participation Plan (EJPPP). The proposed facility would be an “affecting facility” under C.G.S. §22a-20a because it would be an “electric generating facility with a capacity of more than ten megawatts.” (NTE 6; C.G.S. § 22a-20a) 37. NTE submitted an EJPPP to DEEP dated March 31, 2016 and also submitted an updated* EJPPP to DEEP on April 14, 2016. By letter dated April 19, 2016, DEEP noted that the EJPPP was approved on April 19, 2016. *The only change/update from the original EJPPP to the updated EJPPP was the approximate date listed for the initial Public Information Meeting. (NTE 6) 38. Pursuant to C.G.S § 22a-20a, any municipality, owner or developer may enter into a community environmental benefits agreement in connection with the affecting facility. (C.G.S § 22a-20a) 39. NTE and the Town of Killingly are working on a Community Environmental Benefits Agreement (CEBA). The CEBA has several components, including but not limited to a financial component, reference to a decommissioning plan for KEC, establishing educational scholarships for Killingly students who seek to study environmental science in college, and the purchase and planting of trees on an annual basis. (Tr. 7, p. 1025, 1038-1040) 40. As of January 26, 2017, Sean Hendricks, Town Manager, Town of Killingly is recommending that the Killingly Town Council approve or adopt the CEBA. (Tr. 7, p. 1025) 41. As of February 6, 2017, NTE had not yet signed a final CEBA with the Town. (Tr. 8, p. 1157) [Page 6] Docket 470 – NTE Findings of Fact Page 6 State Agency Comments 42. Pursuant to C.G.S. §16-50j(g), on September 16, 2016, the following state agencies were requested to submit written comments regarding the proposed facility: 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 September 16, 2016) 43. On September 16, 2016, the Council received a response from the DOT’s Bureau of Engineering and Construction indicating that DOT had no comments. (DOT Letter dated September 15, 2016) 44. On October 24, 2016, the Council received comments from the DPH, including, but not limited to, the following: a) The Project is located 4,000 feet from the Killingly Industrial Park Wellfield; b) The Project is not within the source water protection area, but final Level A Aquifer Protection Area mapping is not complete; c) The water supply analysis provided by NTE does not sufficiently document that CWC Crystal Division has adequate water with an appropriate margin of safety to supply KEC; d) If additional water analysis determines that interconnection with the CWC Plainfield system is necessary, such infrastructure improvements require approval and construction; e) The project must comply with the backflow prevention requirements; f) The project must have annual tests performed by a certified DPH Backflow Prevention Device Tester; and g) Inspections must be performed by a certified DPH Cross Connection Survey Inspector. (DPH Letter dated October 20, 2016) 45. On November 7, 2016, the Council received comments from the DEEP, including, but not limited to, the following: a) The Generating Facility Site contains several small dump sites; b) The Project would require extensive grading and cut and fill; c) Existing stone walls should be preserved, especially along Lake Road; d) Existing noise at the Generating Facility Site is dominated by sounds from a shooting range across the Quinebaug River in Pomfret; e) NTE’s air permit (based on revisions to accommodate the Town) could go to Notice of Tentative Determination in the first quarter of 2017; f) KEC’s air emissions benefits associated with displacing older, less efficient, higher emitting plants is a function of ISO-NE evaluating and selecting bids for various capacity products and the final retirement or run status’ of older, higher emitting plants; g) NTE would require the purchase of NOx emissions credits, but based on future upwind major sources, the KEC’s air NOx benefits may be considered probable but not absolutely certain; h) On November 1, 2016, NTE was instructed to submit a Natural Diversity Database request; i) While KEC’s ultra-low sulfur distillate (ULSD) use is most likely to correspond to extreme cold weather spells, it could possibly occur during summer months when public potable water use is higher and supplies are lower; j) A water supply analysis should be conducted as recommended by DPH; k) The use of sewage treatment effluent should be evaluated as a water supply alternative; [Page 7] Docket 470 – NTE Findings of Fact Page 7 l) The proposed interconnection of the Plainfield Division Wellfield into the interconnected system of the Philip Hopkins Wellfield and the Brooklyn Wellfield would require a Diversion Permit from DEEP; m) Any ULSD use that is flexible or discretionary with regard to timing should not take place during the driest periods or highest water demand periods of the year such as between June 15 and October 15; n) NTE would have to register with DEEP under the General Permit for the Discharge of Stormwater and Dewatering Wastewaters from Construction Activities or the General Permit for the Discharge of Stormwater Associated with Industrial Activities; o) Wastewater from KEC would likely require a DEEP permit to discharge to the Killingly wastewater treatment plant; p) The creation of 0.39 acres of inland wetland to mitigate impacts associated with the utility switchyard and a five-year monitoring plan for invasive species appears appropriate; q) With wetland impacts under 0.5 acres, the Utility Switchyard would likely be eligible for a Pre-Construction Notification rather than an individual permit from the U.S. Army Corps of Engineers (ACOE); r) If the Pre-Construction Notification to ACOE is determined to be appropriate, the Utility Switchyard would qualify under DEEP’s Section 401 Water Quality Certification General Permit; s) The two days of ULSD storage should be justified and incremental reliability benefits, if any, associated with additional ULSD storage should be examined; t) Additional detail on firm gas delivery should be provided; u) NTE should explain why KEC, as a baseload facility, would operate about 60 to 75 percent of the year; v) More information should be provided on the natural gas pipeline interconnection; w) NTE should explain the source of the KEC’s water vapor plume and include on which conditions it would occur; x) The stormwater management plan would be evaluated principally pursuant to the General Permits for the Discharge of Stormwater from Construction Activities and from Industrial Activities; and y) DEEP is concerned about noise impacts to the two homes located south of the KEC site. (DEEP Letter dated November 7, 2016) 46. On January 19, 2017, the Council received additional comments from DPH indicating that, if KEC is constructed and utilizes the public drinking water supply for cooling as proposed, an interconnection between Connecticut Water Company’s (CWC) Crystal and Plainfield systems is necessary for CWC to maintain an adequate margin of safety through the projected planning periods. (DPH Letter dated January 19, 2017) 47. The following agencies did not respond to the Council’s request for comment on the proposed facility: DOAg, CEQ, PURA, OPM, DECD, DESPP, DCP, DOL, DCS, CAA, and SHPO. (Record) Public Benefit Evolving Benefits 48. Pursuant to Public Act 98-28, An Act Concerning Electric Restructuring, generators of electricity may compete with each other for the development of electric generation. (Council Administrative Notice Item No. 48 – Docket No. 192B, Finding of Fact #50) [Page 8] Docket 470 – NTE Findings of Fact Page 8 49. The concept of a regional New England electricity market began with the Northeast Blackout of 1965, during which more than 30 million customers from Maine to New Jersey were without power, and the recognition that the reliability of an electricity system is best met by pooling power generation resources across a region (e.g. the New England states) as opposed to on an individual (e.g. state by state) basis. (NTE 20, supplemental response 83, p. 1) 50. In 1999, the wholesale electric markets were in their infancy in New England. The process called “deregulation” had just begun, during which ownership of generation resources by vertically integrated utilities with guaranteed cost recovery was being transferred to competitive entities that were dependent on the competitive wholesale markets to compensate them for the cost of operating their generation facilities and allow them the opportunity to recover their investment. (Council Administrative Notice Item No. 48 – Docket No. 192B, Finding of Fact #51) 51. Created by the Federal Energy Regulatory Commission (FERC) in 1997, ISO-NE is the independent, not-for-profit corporation responsible for the reliable operation of New England’s electric power generation and transmission system, overseeing and ensuring the fair administration of the region’s wholesale electricity markets, and managing comprehensive regional electric power planning. (Council Administrative Notice Item No. 31 – ISO FCA #10 Press Release dated February 29, 2016, p. 2; Council Administrative Notice Item No. 48 – Docket No. 192B, Finding of Fact #52) 52. ISO-NE operates the power system and the competitive wholesale electric markets so that the lowest cost resources are used first to meet consumer demand. However, ISO-NE’s primary responsibility is electric reliability. (Council Administrative Notice Item No. 36 – ISO-NE State of the Grid Presentation dated January 30, 2017, p. 6) 53. ISO-NE is fuel and technology neutral and takes no position on any proposed energy projects. ISO- NE does not own any transmission or distribution lines or power plants. (Council Administrative Notice Item No. 36 – ISO-NE State of the Grid Presentation dated January 30, 2017, p. 5) 54. The New England region operates a power pool and is interconnected with other power pools associated with New York and the Canadian provinces of Québec and New Brunswick. (NTE 20, supplemental response 83, p. 2; Council Administrative Notice Item. No. 48 – Docket No. 192B, Finding of Fact #53)