Monday, December 24, 2012

How Will Article 10 Work?

On Aug. 4, 2011, New York restored and updated its long-expired Article 10, which governs in-state siting of new, repowered or modified electric generating facilities over 25 MW.

The new Article 10, like its predecessor, centralizes siting authority in the New York State Board on Electric Generation Siting and the Environment and is intended to guarantee developers a streamlined, time-certain permitting process.

By lowering the size threshold from 80 to 25 MW, Article 10 permits more wind, solar and other renewable projects to use its streamlined process while continuing to recognize the authority of local interests over smaller projects that have more local impacts.

Implementing regulations were proposed this spring, with comments due by the end of May.

Noteworthy provisions of the proposed regulations are:

Disclosure of sensitive, detailed capital cost estimates. Not appearing to be required by Article 10, Section 1001.14 of the regulations requires applicants to provide detailed capital cost estimates, along with supporting work papers. The proposed disclosures would require developers to air competitively sensitive commercial information; fear of which could discourage developers from siting new projects or risk distorting a fully competitive market by permitting market participants to influence competitive bid processes like the New York State Energy Research and Development Authority solicitations.

Minor design revisions trigger substantial scrutiny. Certain minor project design changes such as shifting collection lines, interconnection lines or access roads could trigger more scrutiny and fees if such change is deemed a “revision” under Section 1000.2(ak) rather than a “modification” under section 1000.2(x). This

High bar for ignoring local laws. Section 1001.31(e) requires that before asking the siting board to find that a compliance with a local law would be unreasonably burdensome, applicants must show it is technically impractical to comply with the local requirement or the costs to consumers of the applicant’s doing so would outweigh its benefits. In comparison, Article 10 gives the siting board discretion to overrule local laws that pose an unduly burdensome barrier. Arguably, then the implementing regulations adopt a more onerous standard than that contemplated in the actual legislation.

Low bar for forcing administrative hearings. Section 1000.12 allows parties, including those seeking to challenge or delay a project, to force an administrative hearing upon a showing of material and relevant concerns. This could expose developers to costly litigation of potentially frivolous issues. Article 10 does not codify a higher standard but would permit the siting board to impose a substantive and significant standard, which would prevent litigation concerns.

Long lead time for public involvement program (PIP) plan. Section 1000.4(d) requires applicants to submit a PIP plan at least 150 days before the preliminary scoping statement. Added to the three-month pre-application (1000.5(c)) and yearlong application, this five-month wait appears to extend the certification time line to 20 months—nearly twice the duration proposed in the notice of proposed rulemaking.

Costly detail for preliminary design drawings, noise and vibration studies, and site studies. The requirement discourages applicants from improving the design once it has been submitted for fear such changes might be deemed “revisions” under the law.

These studies depend on variables that cannot be known at the application stage, and the specificity sought adds costly layers of complexity without achieving any corresponding benefit.
Section 1001.21 requires construction-level detail of site geology, seismology and soils, which would impose a potentially large cost at the application stage.

Early-stage site safety response plans and New York State Division of Homeland Security and Emergency Services review. Section 1001.18(d) requires applicants to ask the New York State Division of Homeland Security and Emergency Services to review plans, seeming unnecessary for relatively small projects, especially small renewable resources.

Study radius of groundwater analysis and storm water plans. Section 1001.23 requires detailed groundwater analysis and storm water plans.

The proposed regulations highlight some potential early-stage obstacles the siting board could impose on in-state developers.

Taken together, these obstacles would seem to undercut the objective and limit the effectiveness of Article 10, as well as frustrate the desire of developers and consumers that the legislation streamline permitting. (Electric Light & Power, by Frederick R. Fucci and Daniel A. Broderick, Dickstein Shapiro LLP, 9/1/2012)

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