Danskammer Energy, LLC v. N.Y.S. Dep't of Envtl. Conservation

76 Misc.3d 196

173 N.Y.S.3d 134

DANSKAMMER ENERGY, LLC, Plaintiff/Petitioner,

v.NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Commissioner Basil Seggos, in his official capacity, Laura and Larry Does 1-10, in their official capacities, Governor Kathy Hochul, in her official capacity, and The State of New York, Defendants/Respondents.

Index No. EF008396-2021

Supreme Court, Orange County, New York.

Decided on June 8, 2022

GREENBERG TRAURIG, LLP, Office & P.O. Address, 54 State Street, Sixth Floor, Albany, New York 12207, Steven C. Russo, 1 Vanderbilt Avenue, New York, New York 10017, Brenda Colella, Barclay Damon Tower, Office & P.O. Address, 125 East Jefferson Street, Syracuse, New York 13202, Counsel for Petitioner-Plaintiff

Joshua Michael Tallent, Assistant Attorney General, For the State Respondents, Office & P.O. Address, The Capitol, Albany, New York 12224

READ AND LANIADO, LLP, Attorneys for Proposed Amicus Curiae Independent Power Producers of New York, Inc., Office & P.O. Address, 25 Eagle Street, Albany, New York 12207

COLLERAN, O'HARA & MILLS LLP, Attorneys for proposed Amicus Curiae New York State AFL-CIO, New York State, Building and Construction Trades Council, and Hudson Valley Building and Construction Trades Council, 100 Crossways Park Drive West, Suite 200, Woodbury, New York 11797

BARCLAY DAMON LLP, Attorneys for proposed Amicus Curiae Astoria Gas Turbine Power LLC, 80 State Street, Albany, New York 12207

HOLLAND & KNIGHT LLP, Attorneys for proposed Amicus Curiae Mitsubishi Power, 31 West 52nd Street, New York, New York 10019

New York Lawyers for the Public Interest, Attorney for Proposed Amicus Curiae The PEAK Coalition, 151 West 30th St, 11th Floor, New York, New York 10001

EARTH JUSTICE, Attorneys for Proposed Amicus Curiae Sierra Club and Orange RAPP, 48 Wall Street, 15th Floor, New York, New York 10005

Robert A. Onofry, J.

It is hereby ordered that the motions are decided as set forth herein.

Factual/Procedural Background

The Plaintiff/Petitioner Danskammer Energy, LLC (hereinafter "Danskammer") operates an existing natural gas fired power energy plant in the Town of Newburgh, Orange County.

In 2019, Danskammer, inter alia, filed an application with the Defendant/Respondent New York State Department of Environmental Conservation (hereinafter the "DEC") for a Title V air permit to construct and operate an expanded approximately 536 net megawatt ("MW") repowered natural gas fired power plant (the "Danskammer Energy Center") on the site for a five year period.

The DEC denied the application, inter alia , based on Section 7(2) of the newly enacted Climate Leadership and Community Protection Act ("CLCPA"). The CLCPA was enacted, inter alia , to reduce greenhouse gas ("GHG") emissions in the state, and requires state agencies to consider the effect of proposed uses on GHG emissions when issuing permits, etc.

Danskammer commenced this proceeding to challenge the determination. Danskammer argues, inter alia , that although the CLCPA permits the DEC to consider the effect of a proposed use on GHG emissions, it does not authorize the DEC to deny a permit on such a basis when the application, as here, otherwise conforms with all other relevant requirements. Indeed, Danskammer asserts, in so doing, the DEC established a de facto rule proscribing the development of any upgraded fossil fuel power plants like Danskammer without following proper procedural safeguards, and prior to the promulgation of rules, etc. called for under the CLCPA. Moreover, Danskammer argues, the decision was wrong on the merits, as the proposed re-powering of the plant will have the net effect of lowering GHG emissions.

The Defendants/Respondents the DEC, DEC Commissioner Basil Seggos, New York State Governor Kathy Hochul, and the State of New York (hereinafter referred to collectively as "State Respondents") move to dismiss a portion of the first cause of action, and the entirety of the second, third, and fourth causes of action; and for an order staying the proceedings pending the conclusion of further administrative proceedings. The State Respondents argue, inter alia , that CLCPA Section 7(2) permits the denial of a Title V permit on the facts presented, and that it exercised its authority to do so appropriately. Otherwise, it argues, the remaining issues must await the exhaustion of administrative remedies.

Numerous non-parties have moved for leave to file Amicus Curiae briefs.

The motions are decided as follows.

Factual/Procedural Background

The Regulatory Background

In July of 2019, the Governor signed the CLCPA into law. The stated goal of the legislation is "to reduce greenhouse gas emissions from all anthropogenic [emanating from human activity] sources 100% over 1990 levels by the year 2050, with an incremental target of at least a 40 percent reduction in climate pollution by the year 2030." CLCPA § l (4).

Among other things, the CLCPA added a new article 75 to the Environmental Conservation Law. See ECL §§ 75-0101 through 75-0119.

The CLCPA became effective in January 2020, with the exception of ECL § 75- 0115, which becomes effective October 1, 2022.

The CLCPA establishes the Climate Action Council (hereinafter "Council"), which consists of 22 members, including the Commissioners of Transportation, Health, Economic Development, Agriculture and Markets, Housing and Community Renewal, Environmental Conservation, Labor, the Chairperson of the Public Service Commission, the Presidents of NYSERDA, the New York Power Authority, and the Long Island Power Authority, and the Secretary of State, as well as two members appointed by the Governor, three appointed by the Speaker of the Assembly, three appointed by the Temporary President of the Senate, one appointed by the Minority Leader of the Assembly, and one appointed by the Minority Leader of the Senate. ECL § 75-0103(1)(A) .

The Council is to prepare a draft "scoping plan" on or before two years from the effective date of the CLCPA (i.e. , on or before January 1, 2022). The scoping plan is required to outline "the recommendations for attaining the statewide greenhouse gas emissions limits in accordance with the schedule established in Section 75-0107 of this Article, and for the reduction of emissions beyond eighty-five percent, net zero emissions in all sectors of the economy, which shall inform the State Energy Planning Board's adoption of a State Energy Plan in accordance with Section 6-104 of the Energy Law. The first State Energy Plan issued subsequent to completion of this scoping plan required by this section shall incorporate the recommendations of the Council."

The CLCPA requires regional public comment hearings, and public comment.

The scoping plan must "identify and make recommendations on regulatory measures and other State actions that will ensure the attainment of the statewide greenhouse gas emissions limits established pursuant to Section 75-0107 of this Article."

Relevant to the case at bar, the scoping plan is to include "measures to reduce emissions from the electricity sector by displacing fossil-fuel fired electricity with renewable electricity or energy efficiency." ECL § 75-0103(13)(b).

The Council must update its scoping plan at least every five years. ECL § 75-0103(15) .

The CLCPA require the DEC to "establish a statewide greenhouse gas emissions limit as a percentage of 1990 emissions, with a reduction to 60% of 1990 emissions by 2030, and 15% of 1990 emissions by 2050." ECL § 75-0107(1).

The CLCPA itself does not set specific GHG emission limits for any sector of the New York economy, including electricity generation. Rather, with regard to the electric generation sector, the CLCPA directs the Public Service Commission (hereinafter "PSC"), in a provision set forth within Public Service Law (hereinafter "PSL") 66-p, to establish a renewable energy program no later than July 1, 2021. Such a program should provide that 70% of electricity generation in the state be generated by "renewable energy sources" by 2030, and that 100% of such electricity generation should be generated by renewable energy sources by 2040.

The PSC adopted such a program, at least in part, by issuing an Order on October 15, 2020, that modified its Clean Energy Standard.

The CLCPA recognizes that aggressive clean energy generation targets must be balanced against the obligation to provide "safe and reliable electric service" to the people of the state. PSL § 66-p. Accordingly, Section 66-p authorizes the PSC to "modify the obligations of jurisdictional load serving entities and/or the [renewable energy source] targets upon consideration of the factors described" in Section 66-b. PSL § 66-p (2). The provision also authorizes the PSC to "temporarily suspend and modify" the requirements of the renewable energy program in the event it makes a finding that the program "impedes the provision of safe and adequate electric service."

The CLCPA sets time frames for public hearings, workshops, consultation with stakeholders, and, finally, for the promulgation of regulations by DEC to implement the Council's plan, stating that: "[n]o later than four years after the effective date of this article, the [DEC], after public workshops and consultation with the council, the environmental justice advisory group, and the climate justice working group established pursuant to section 75-0111 of this article, representatives of regulated entities, community organizations, environmental groups, health professionals, labor unions, municipal corporations, trade associations and other stakeholders, shall, after no less than two public hearings, promulgate rules and regulations to ensure compliance with the statewide emissions reduction limits and work with other state agencies and authorities to promulgate regulations required by section eight of the chapter of the laws of two thousand nineteen that added this article." ECL § 75-0109(1) .

With respect to the contemplated regulations to be promulgated after the...