Memorandum in Strong Opposition - S.6833-A (Harckham)
S.6833-A (Harckham) - AN ACT to amend the environmental conservation law, in relation to permit modifications, suspensions, revocations, renewals, reissuances and recertifications under the air quality control program
The Independent Power Producers of New York, Inc. (IPPNY) is New York’s trade association dedicated to representing the largest fleet of clean energy generation in New York State and companies involved in: the competitive power supply industry; the development of electric generating facilities; the generation, sale, and marketing of electric power; and natural gas transmission facilities. IPPNY Member companies produce the majority of New York's electricity, utilizing all sources, such as wind, solar, hydro, energy storage, natural gas, low sulfur oil, biomass, and nuclear. Furthermore, IPPNY’s Members have invested more than $10 billion in capital improvements at their facilities, have supported nearly 19,000 long-term jobs across the State, and pay approximately $1.5 billion in local property taxes annually.
IPPNY strongly opposes S.6833-A (Harckham). This bill would threaten electric system reliability and is pre-empted by Federal law. This legislation applies to Title V permits under the Clean Air Act, which must be renewed every five years. Title V permits are required by owners of electric generating facilities to operate their plants. The bill would deny lawfully submitted Title V permit renewal applications and terminate permits solely because the NYS Department of Environmental Conservation (DEC) did not act on the applications within a timely manner.
The issuance of Title V permits is essential to ensure facilities continue operating during the transition from an electricity system consisting primarily of fossil-fueled generation to a system largely composed of renewable and other yet-to-be-determined zero-emitting generation. Importantly, this transition must occur in a manner that protects the reliable and efficient operation of the electric system to ensure the lights stay on and electricity prices remain affordable. In 2021, IPPNY and two labor unions submitted a petition to the NYS Public Service Commission (PSC) to urge the PSC to define zero emissions sources, such as dispatchable emissions free resources, to meet the 2040 zero emissions target mandated by the Climate Leadership and Community Protection Act. Multiple studies have demonstrated a critical need for dispatchable generation, i.e., generation sources that can be ramped up quickly for long durations, which will likely need to be sourced from fossil-fueled generation until zero-emitting technologies become commercially available. If this bill is enacted, fossil-fueled generating facilities (capable of becoming zero emitting when technologically feasible) may be forced to shut down prematurely because their Title V permits have been terminated simply because DEC did not act on a permit application. Electric system reliability will undoubtedly be harmed.
Pursuant to Section 401(2) of the State Administrative Procedure Act (SAPA), facilities can continue to operate under their existing permits until their renewal application has been fully determined by the DEC or until a date determined by a court. This provision of existing law ensures that a facility can continue to lawfully operate despite the failure of the DEC to complete a timely review of its renewal application.
The bill would automatically suspend Title V permits that have been extended, pursuant to SAPA Section 401(2), and would terminate applications to renew Title V permits if the DEC does not make a final determination on the renewal application within three years of the effective date of the legislation or the date the DEC receives the renewal application, whichever is later.
Further, the legislation states that the permit suspension would not take effect for a two-year period if the New York Independent System Operator (NYISO), a utility, or the New York State Department of Public Service determines that the suspension would compromise reliability and the NYISO has selected a permanent reliability solution that is in the process of permitting or construction but is not yet operational. These reliability provisions are not workable. Pursuant to the bill, the termination of the permit can be suspended if a reliability need is identified AND a permanent solution has been selected and is in the permitting or construction process. However, the NYISO will likely not have identified a permanent solution at the time the permit is terminated. Even if the NYISO has identified a solution, that solution very possibly has not commenced the permitting process. Furthermore, the bill does not make clear that a facility can continue to operate until a replacement facility to meet reliability requirements comes online.
Importantly, the bill is inconsistent with, and preempted by, Federal law. The Clean Air Act allows the Environmental Protection Agency (EPA) to delegate its Title V permitting authority to the states through entities such as the DEC. To obtain such authority, the states are required to demonstrate to EPA that their laws and regulations are consistent with Title V and EPA’s implementing regulations. The proposed bill would change this State’s laws implementing Title V requirements and would need to be reviewed and approved by the EPA before the bill’s provisions could become effective. EPA would likely find that the bill’s requirement that Title V permits automatically expire, if DEC does not act within a certain time (three years under this bill), is inconsistent with Title V and DEC’s regulations implementing Title V. The Clean Air Act and EPA’s implementing regulations require that Title V permits continue in effect so long as a timely renewal application has been made and the applicant timely responds to requests for information by the DEC.
The EPA’s implementing regulations provide only two remedies for the DEC’s failure to act on a permit application. First, a lawsuit can be brought against the permitting authority for failure to act. The EPA’s implementing regulations state that, “if the final permit action being challenged is the permitting authority's failure to take final action, a petition for judicial review may be filed any time before the permitting authority denies the permit or issues the final permit.” Second, the EPA may terminate or revoke and reissue the permit. The Clean Air Act does not allow the NY State Legislature to terminate Title V permits automatically if the DEC fails to act on a permit application.
Additionally, the bill states that, if the DEC does not make a final determination on a Title V permit renewal application within a 24-month period after the effective date of the bill or the date the application is received by the DEC, whichever is later, the permit holder must pay the amount of the Title V fee into an existing Air Quality Improvement Fund. However, the bill does not make clear what happens after this payment is made. The EPA’s regulations state that any required fee, imposed as part of the Title V program, must be used solely for permit program costs and must be approved by the EPA. If the proposed fee in the bill is a penalty that is not necessary to meet the costs of the permit program, the EPA will likely reject it.
The bill is also inconsistent with the Clean Air Act because it fails to specify that a court may set a different date for the expiration of the permit if it is suspended. Last year, IPPNY provided an amendment to allow a court to continue to set a different date until which a facility can operate, consistent with the provisions of existing law, but our amendment was not included within the bill.
For the reasons stated above, IPPNY strongly opposes S.6833-A (Harckham).
