Connecticut Siting Council Docket 470B Final Decision

[Page 1] DOCKET NO. 470B - 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. Reopening of this application based on changed conditions pursuant to Connecticut General Statutes §4-181a(b). June 6, 2019 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. The proposed facility is referred to as Killingly Energy Center (KEC). (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #1; NTE 1c – Environmental Overview in Support of Petition for Changed Conditions “EOSPCC”, 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. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #2) 3. The parties to the original Docket No. 470 proceeding were 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). (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #7) 4. During the original Docket No. 470 proceeding, pursuant to CGS §22a-19, the Council granted NAPP, SC and WLT Connecticut Environmental Protection Act intervenor status. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #8) 5. During the original Docket No. 470 proceeding, pursuant to CGS §16-50n(c), the Council grouped the following Parties with the same interests: NAPP, SC and WLT (Grouped Party). (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #9) 6. In the original Docket No. 470 proceeding, NTE planned to participate in ISO New England, Inc.’s (ISO-NE) Forward Capacity Auction (FCA) #11. NTE originally sought to receive a Capacity Supply Obligation (CSO) for the 2020-2021 Capacity Commitment Period (CCP) for KEC. (Council Administrative Notice Item No. 57 – Docket No. 470, Findings of Fact #1 and #95) 7. FCA #11 was held on February 6, 2017 and had six rounds of competitive bidding. NTE participated in five rounds of bidding, but subsequently withdrew from the auction before it was concluded because of concerns about cost and schedule uncertainties regarding its ongoing permitting efforts. Thus, NTE did not receive a CSO for KEC. (Council Administrative Notice Item No. 57 – Docket No. 470, Findings of Fact #1, #99 and #100) [Page 2] Docket 470B – NTE Findings of Fact Page 2 8. On February 13, 2017, NTE filed a motion to reopen the evidentiary record in the original Docket No. 470 for the limited purpose of introducing new evidence related to the results of the FCA held 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 held on March 23, 2017 at the Council’s office in New Britain in the original Docket No. 470. (Council Administrative Notice Item No. 57 – Docket No. 470, Findings of Fact #23 and #25) 9. On May 11, 2017, in the original Docket No. 470, the Council voted to deny without prejudice a Certificate to NTE for the 550-MW combined cycle electric generating facility and associated electrical interconnection because the Council determined that the public benefit had not been demonstrated. (Council Administrative Notice Item No. 57 – Docket No. 470, Decision and Order) 10. On July 3, 2017, pursuant to CGS §4-183 and 16-50q, NTE served the Council with an administrative appeal of the Council’s May 16, 2017 final decision to deny without prejudice the application of NTE for a Certificate. The administrative appeal was subsequently withdrawn by NTE on February 16, 2018. (NTE Connecticut, LLC v. Connecticut Siting Council, CV-17-6038497-S) Docket No. 470A: Changed Conditions 11. On January 19, 2018, pursuant to CGS §4-181a(b), NTE filed a motion to reopen and modify the Council’s May 11, 2017 decision to deny without prejudice a Certificate to NTE for the 550-MW electric generating facility and associated electrical interconnection. Specifically, NTE described its steps to secure certain permits, finalize project-related agreements and make beneficial facility modifications. These efforts put NTE in a strong position to participate in FCA #12 in February 2018. However, on February 8, 2018, NTE notified the Council that KEC was not selected by ISO- NE to receive a CSO in FCA #12, and NTE withdrew its motion. (NTE 1 – Motion to Reopen and Modify, dated January 18, 2019) Docket No. 470B: Changed Conditions 12. On January 18, 2019, pursuant to CGS §4-181a(b), NTE filed a Motion to Reopen and Modify (Motion to Reopen and Modify) the Council’s May 11, 2017 decision to deny without prejudice a Certificate to NTE for the 550-MW electric generating facility and associated electrical interconnection. (NTE 1 – Motion to Reopen and Modify) 13. In NTE’s Motion to Reopen and Modify, NTE noted several changed conditions including, but not limited to, the following: a) NTE has been pre-qualified by ISO-NE to participate in FCA #13; b) On December 10, 2018, NTE secured approval of a minor modification to its air permit from the Connecticut Department of Energy and Environmental Protection (DEEP) to utilize improved turbine technology and increase the generation output from 550 MW to 650 MW; c) NTE executed an Engineering Agreement with Yankee Gas for engineering and permitting of the lateral gas service line (to be owned and operated by Yankee Gas) to provide for the delivery of natural gas from the Algonquin gas transmission line to the proposed facility; d) NTE has entered into a Water Supply Agreement with the Connecticut Water Company (CWC), dated October 31, 2017 for the delivery of up to 400,000 gallons of water per day to the proposed facility; [Page 3] Docket 470B – NTE Findings of Fact Page 3 e) NTE has entered in two separate Construction Agreements with CWC through which NTE has committed to pay all costs associated with the installation of a new water line connecting the CWC system to the proposed facility and the Killingly Industrial Park and for the interconnection of CWC’s Plainfield and Crystal Water systems; f) On January 30, 2018, the Town Council approved and executed NTE’s proposed Tax Stabilization Agreement (TSA) and Community Environmental Benefits Agreement (CEBA) for the proposed facility; g) NTE finalized the form of a Property Value Guarantee Agreement (PVG) and has committed to offer the PVG to all property owners within 2,500 feet of the proposed project site; h) NTE has worked with Yankee Gas in finalizing a service agreement; i) NTE has selected Mitsubishi Model M501JAC combustion turbine generator (CTG) to replace the originally proposed Siemens Model SGT6-8000H turbine. The Mitsubishi turbine system, besides its nominal power increase to 650 MW, includes the following benefits: i. Improved efficiency; ii. Continued rapid starts and dual-fuel rapid switching ability; iii. Reduction in short-term particulate matter emissions rates while maintaining a similar emissions profile for balance of the associated air emissions parameters; iv. Higher design turbine heat input rating and output allowing for a reduction in fuel consumption by the system’s duct burners; and v. Increased output at essentially no additional cost or environmental impact; and j) NTE has improved the overall layout of the proposed facility with minor repositioning of certain facility components, relocating the perimeter access road and eliminating the proposed retaining wall in the northeastern portion of the site resulting in an increased setback from sensitive on-site environmental resources. (NTE 1 – Motion to Reopen and Modify, pp. 5-8) 14. On January 18, 2019, the Council issued a memorandum to the service list for the original Docket No. 470 proceeding requesting comments or statements of position in writing with respect to whether the Motion to Reopen and Modify should be granted or denied by February 7, 2019. CFE and the Grouped Party submitted comments in opposition to the Motion to Reopen and Modify. (Council Memorandum dated January 18, 2019; Record) 15. At a meeting held on February 14, 2019, the Council voted to grant NTE’s Motion to Reopen and Modify its May 11, 2017 decision to deny without prejudice a Certificate for the construction, maintenance and operation of a 550-MW dual-fuel combined cycle electric generating facility and associated electrical interconnection switchyard, based on changed conditions pursuant to CGS §4- 181a(b). This reopened proceeding is identified as Docket No. 470B. (Council Memorandum dated February 15, 2019) 16. 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). (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #4) [Page 4] Docket 470B – NTE Findings of Fact Page 4 Procedural Matters 17. During a regular Council meeting on February 14, 2019, the Council voted to approve the schedule of the reopened proceeding with a public field review, evidentiary session and public comment session in the Town of Killingly on April 4, 2019. On February 15, 2019, all parties and intervenors to the original Docket No. 470 proceeding were notified of the reopening. (Record; Council Memorandum dated February 15, 2019) 18. On February 15, 2019, pursuant to C.G.S. §16-50m, the Council sent a letter to the Towns of Killingly, Putnam and Pomfret to provide notification of the scheduled public hearing and to invite the municipalities to participate in the proceeding. (Record) 19. Pursuant to C.G.S. §16-50m, the Council published legal notice of the date and time of the public hearing in The Bulletin on February 21, 2019. (Record) 20. On March 6, 2019, the Council held a pre-hearing conference on procedural matters at the office of the Council, 10 Franklin Square, New Britain, Connecticut, 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 project. (Council Pre-Hearing Conference Memoranda, dated February 27, 2019 and March 7, 2019) 21. Pursuant to R.C.S.A. §16-50j-21, on March 14 2019, NTE installed two signs, measuring four feet by six feet, along Lake Road. One sign was located at 180 Lake Road, and the other sign was located at 189 Lake Road. The signs included the Applicant’s name, type of facility proposed, the date and time of the Council’s public hearing, and contact information for the Council. (NTE 5) 22. The Council and its staff conducted a public inspection of the 180 and 189 Lake Road, Killingly sites on April 4, 2019, beginning at 1:30 p.m. The site walk included three stops around the proposed power plant site and one stop at the utility switchyard site on the opposite side of Lake Road. (Council Hearing Notice dated February 15, 2019; NTE 3 – Proposed Site Walk Plan; Transcript 04/04/2019, 3:00 p.m. [Tr. 1], p. 18) 23. Pursuant to C.G.S § 16-50m, the Council, after giving due notice thereof, held a public hearing on April 4, 2019, beginning with an evidentiary session at 3:00 p.m. and continuing with a public comment session at 6:30 p.m. at the Killingly Town Hall, Meeting Room, 172 Main Street, Killingly, Connecticut. (Council Hearing Notice dated February 15, 2019; Tr. 1, p. 1; Transcript 04/04/2019, 6:30 p.m. [Tr. 2], p. 1) 24. The Council continued the public hearing by holding evidentiary sessions on April 18, 2019 and May 2, 2019 at the office of the Council at 10 Franklin Square, New Britain, Connecticut. (Council Continued Hearing Memoranda of April 5 and April 22, 2019; Transcript, April 18, 2019, 11:00 a.m. [Tr. 3], p. 1; Transcript, May 2, 2019, 11:00 a.m. [Tr. 4] p. 1) 25. The Connecticut Supreme Court acknowledges that constitutional principles permit an administrative agency to organize its hearing schedule so as to balance its interest in reasonable, orderly and non- repetitive proceedings against the risk of erroneous deprivation of a private interest. (Concerned Citizens of Sterling v. Connecticut Siting Council, 215 Conn. 474 (1990); Pet v. Department of Public Health, 228 Conn. 651 (1994); FairwindCT, Inc. v. Connecticut Siting Council, 313 Conn. 669 (2014)) [Page 5] Docket 470B – NTE Findings of Fact Page 5 Municipal Consultation and Community Outreach 26. In an effort to keep the Killingly community informed on NTE’s progress with the project and its efforts to reopen this proceeding, NTE held additional community outreach meetings on December 18, 2017 and June 20, 2018 at the Killingly High School. Notice of these community outreach meetings were published in The Bulletin and the Killingly Villager and also posted on the subject property. (NTE 1 – Motion to Reopen and Modify, p. 8) 27. At these community outreach meetings, NTE described the changed conditions referenced in the Motion to Reopen and Modify; updated Killingly residents on the status of the TSA and the CEBA with the Town; and answered questions regarding the proposed KEC facility and NTE’s plans to file the Motion to Reopen and Modify with the Council. (NTE 1 – Motion to Reopen and Modify, p. 8) 28. NTE continues to update the KEC website (www.killinglyenergycenter.com) and make publicly available copies of all new reports, applications, materials, permits, and presentations made on behalf of KEC on the website and also in hard copy in the Killingly Public Library. (NTE 1 – Motion to Reopen and Modify, p. 8; Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #28) 29. 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.” However, per the 2018 Connecticut Distressed Municipalities list, the Town is no longer considered a “distressed municipality” per C.G.S §32-9j and is no longer subject to the Environmental Justice program. Notwithstanding, NTE plans to submit an updated final Environmental Justice Report to DEEP describing its most recent community outreach efforts. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #36; C.G.S. § 22a- 20a; NTE 1 – Motion to Reopen and Modify, p. 8; NTE 4, response 1; Tr. 3, p. 235) 30. Pursuant to C.G.S § 22a-20a, any municipality, owner or developer may enter into a CEBA in connection with the affecting facility. (C.G.S § 22a-20a) 31. NTE and the Town of Killingly negotiated and executed a 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. (NTE 1a; NTE 7, response 43) 32. On January 30, 2018, the Killingly Town Council approved and executed the CEBA and TSA with NTE. Both of the agreements have been executed by both parties. (NTE 1a; NTE 7, response 43, p. 2) [Page 6] Docket 470B – NTE Findings of Fact Page 6 State Agency Comments 33. Pursuant to C.G.S. §16-50j(g), on February 15, 2019, the following state agencies were requested to submit written comments regarding the proposed facility by March 28, 2019: 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 Administrative Services (DAS); Department of Transportation (DOT); the Connecticut Airport Authority (CAA); and the State Historic Preservation Office (SHPO). (Council Hearing Package, dated February 15, 2019) 34. On February 26, 2019, the Council received a response from CAA indicating that it is necessary for NTE to file Form 7460, Notice of Proposed Construction or Alteration, with the Federal Aviation Administration (FAA). CAA notes that this is a necessary step to determine if the proposed project would result in a hazard to air navigation. (CAA Comments received February 26, 2019) 35. On March 14, 2019, the Council received a response from DPH with comments regarding Aquifer Protection Area mapping, water supply analysis, interconnection between CWC’s Crystal and Plainfield Systems, DPH review and approval of water supply infrastructure improvements*, and cross connection control and backflow prevention measures. DPH also included its prior comments dated October 20, 2016 from the original Docket No. 470. DPH’s comments are attached hereto as Attachment 1. *DPH noted that water supply infrastructure improvements must be constructed and approved for use prior to construction of KEC. (See FOF #38.) (DPH Comments dated March 14, 2019) 36. By letter dated March 26, 2019, DEEP requested an extension of time to April 1, 2019 to submit its comments. By letter dated March 27, 2019, the Council granted DEEP an extension of time to April 1, 2019 to submit its comments. (DEEP Request for Extension of Time dated March 26, 2019; Council Letter Regarding Extension of Time dated March 27, 2019) 37. On April 1, 2019, the Council received a response from DEEP with comments regarding modifications to the originally approved facility, electric system benefits, air permitting status, diversion permit, Natural Diversity Database (NDDB) review, stormwater permitting, wastewater discharge permitting, wetland mitigation plans/water quality certification, noise impacts, and fuel supply. DEEP’s comments are attached hereto as Attachment 2. (DEEP Comments received April 1, 2019) 38. On April 24, 2019, the Council received additional comments from DPH. Specifically, DPH revised its earlier comment to note that, “Since CWC’s water supply analysis includes the use of an interconnection between Crystal and Plainfield systems to demonstrate an adequate margin of safety, the water supply infrastructure improvements must be constructed and approved for use prior to operation of the KEC plant.” DPH’s additional comments are attached hereto as Attachment 3. (DPH Comments dated April 24, 2019) 39. While the Council is obligated to consult with and solicit comments from state agencies by statute, the Council is not required to abide by the comments from state agencies. (Council Administrative Notice Item No. 61 – Corcoran v. Connecticut Siting Council, 284 Conn. 455 (2007) [Page 7] Docket 470B – NTE Findings of Fact Page 7 40. 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, DAS, DOT, and SHPO. (Record) Public Benefit Evolving Benefits 41. 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. 57 – Docket No. 470, Finding of Fact # 48) 42. Pursuant to CGS §16-50p(c), a public benefit exists when a facility is necessary for the reliability of the electric power supply of the state or for the development of a competitive market for electricity. Public benefit exists if the Council finds and determines a proposed electric generating facility contributes to forecasted generating capacity requirements, reduces dependence on imported energy resources, diversifies state energy supply mix and enhances reliability. (CGS §16-50p(c); Preston v. Connecticut Siting Council, 20 Conn. App. 474 (1990); Preston v. Connecticut Siting Council, 21 Conn. App. 85 (1990)) 43. 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. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #49) 44. 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. 57 – Docket No. 470, Finding of Fact #50) 45. 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. 57 – Docket No. 470, Finding of Fact #51) 46. 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. 57 – Docket No. 470, Finding of Fact #52) 47. 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. 57 – Docket No. 470, Finding of Fact #53) [Page 8] Docket 470B – NTE Findings of Fact Page 8 48. 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. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #54) 49. The early period of deregulation, from the late ‘90s to the mid-2000s, brought a rush for new generation. Seven applications for efficient combined-cycle gas/oil-fired power plants were made to the Council. Of the five approved, including Towantic, three came to fruition promptly (Milford, Lake Road, Bridgeport Energy), benefiting Connecticut and the region with new electric supply. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #55) 50. As early as 2002, the Council recognized the potential problem of over-dependence on natural gas. The concern remains current. Specifically, the most recent Integrated Resource Plan (IRP) issued by DEEP (2014 IRP) stated, “There is growing concern over New England’s increasing dependence on natural gas…and the implications resulting from such dependence in terms of reliability and cost.” (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact #56) 51. After the first wave of power-plant construction, New England public utility departments engaged with FERC to find a market solution that would bring down the high environmental and economic costs of generation. This resulted in a 2006 settlement between states’ attorneys-general and FERC whereby a regional Forward Capacity Market was phased in that gradually managed not only to de- escalate wholesale energy prices but also to encourage diversity in energy resources: first, renewable fuels and, second, “demand response”, also called “load response”, that is, various forms of energy conservation and efficiency. (Council Administrative Notice Item No. 57 – Docket No. 470, Finding of Fact # 57)