IN RE NEWARK ENERGY CENTER PROPOSED AIR POLLUTION CONTROLOPERATING PERMIT MODIFICATION(NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION)

• Court: New Jersey Superior Court Appellate Division
• Decided: December 1, 2017
• Docket: A-5794-14T1
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5794-14T1

IN RE NEWARK ENERGY CENTER PROPOSED AIR POLLUTION CONTROL OPERATING PERMIT MODIFICATION.

Argued October 31, 2017 – Decided December 1, 2017

Before Judges Yannotti, Carroll and Mawla.

On appeal from New Jersey Department of Environmental Protection, Program Interest No. 08857.

Raghu Murthy argued the cause for appellants Ironbound Community Corporation and New Jersey Environmental Justice Alliance (Eastern Environmental Law Center, attorneys; Mr. Murthy and Aaron Kleinbaum, on the briefs).

John G. Valeri, Jr. argued the cause for respondent Newark Energy Center (Chiesa Shahinian & Giantomasi, PC, attorneys; Mr. Valeri, on the brief).

Jung Kim, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (Christopher S. Porrino, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Kim, on the brief).

PER CURIAM Appellants are the Ironbound Community Corporation and the

New Jersey Environmental Justice Alliance. They appeal from a

decision of the New Jersey Department of Environmental Protection

(DEP) granting an application by Newark Energy Center (NEC) to

modify its 2012 Air Pollution Control Operating Permit.

Appellants contend the DEP issued the modification permit

without first requiring NEC to provide a public emergency response

plan, a public emergency notification plan, and detailed public

reports. As a consequence, appellants argue the modification

permit violates the federal Emergency Planning and Community

Right-to-Know Act of 1986 (EPCRA), 42 U.S.C.A. §§ 11001 to 11050,

the federal Clean Air Act (CAA), 42 U.S.C.A. §§ 7401 to 7671(q),

and the New Jersey Spill Compensation and Control Act (Spill Act),

N.J.S.A. 58:10-23.11 to -23.24, and thus must be vacated. After

reviewing the record and the applicable statutory and regulatory

provisions, we affirm the DEP's decision to grant the modification

permit.

I.

We summarize the pertinent facts. NEC owns and operates a

natural gas-powered electrical generating facility in the

Ironbound section of Newark. On November 1, 2012, the DEP issued

NEC's initial air control operating permit pursuant to the CAA,

as implemented in New Jersey by the Air Pollution Control Act

2 A-5794-14T1 (APCA), N.J.S.A. 26:2C-1 to -25.2, and the regulations promulgated

thereunder, N.J.A.C. 7:27-1.1 to -34.5. The 2012 permit allows

NEC to use contaminated water (gray water) obtained from the

Passaic Valley Sewerage Commission (PVSC) in NEC's cooling tower.

It also permits NEC to use sulfuric acid to lower the gray water's

pH level.1 The 2012 permit limits NEC's sulfuric acid emissions

to 10.57 tons per year.

Pertinent to this appeal, on August 27, 2014, NEC filed an

application for a significant modification to its 2012 operating

permit, pursuant to N.J.A.C. 7:27-22.24. NEC requested permission

to increase the amount of sulfuric acid used in its cooling tower

to sufficiently treat the gray water. NEC indicated in its

application that the increased use of sulfuric acid would not

increase the facility's allowable sulfuric acid emission rate.

In support of its application, NEC submitted information

explaining that proper chemical treatment of the cooling water is

essential to keep system surfaces at the facility free of

microbiological growth and mineral scales, and to maintain overall

system cleanliness and efficiency. NEC's application also advised

that, in accordance with design specifications, the pH level of

1 The pH scale measures how acidic or basic a substance is. The pH scale ranges from 0 to 14. A pH of 7 is neutral. A pH less than 7 is acidic. A pH greater than 7 is basic.

3 A-5794-14T1 the cooling tower water would be controlled by adding sulfuric

acid.

The DEP notified appellants of the proposed modification.

Additionally, NEC provided appellants with information concerning

its facility and the chemicals used there, and responded to

appellants' questions at an October 16, 2014 meeting. The DEP

also invited appellants to a meeting to discuss any issues raised

by NEC's pending application.

On December 16, 2014, the DEP published notice on its website

of its intent to approve the proposed significant modification to

NEC's permit. The notice stated that a public hearing was

scheduled for February 3, 2015, and public comments were due by

February 6, 2015. The DEP directly notified petitioners, the

United States Environmental Protection Agency (EPA), and

neighboring states about the pending permit application and public

comment period.

The DEP held the public hearing as scheduled, pursuant to

N.J.A.C. 7:27-22.11(a)(2) and -22.11(f). At the hearing, the DEP

explained its purpose was to "seek public comments on proposed

departmental actions modifying the [NEC] air pollution control

operating permit." The DEP further stated it was proposing to

approve the modification based on NEC's "compliance with all

applicable state and federal air pollution control laws and rules."

4 A-5794-14T1 Public comments spanned a wide variety of topics, including

emission increases; air quality modeling and monitoring; discharge

prevention and containment in the event of an explosion or spill;

and the potential danger to the Ironbound community and the

surrounding environment. Appellants participated in the hearing

and submitted written comments to the DEP and EPA expressing their

concerns about the proposed increase in the amount of chemicals

transported, stored, and added as part of NEC's water treatment

process.

On July 2, 2015, the DEP issued a report responding to the

public comments. The DEP proposed to approve NEC's application

to increase the annual permitted water tower chemical use limit

and storage based on its calculations showing that emissions would

remain unchanged even with the additional chemical use. The DEP

determined the additional chemicals were needed to raise the pH

of the cooling tower water and this would not cause any increase

to sulfuric acid emissions. It further noted the proposed

modifications would require NEC to continuously monitor the

cooling tower water pH level; perform monthly calculations of the

sulfuric acid emissions from the storage tank, turbines, duct

burners, and auxiliary boiler; and monitor the total sulfuric acid

emissions from the facility to ensure they comply with the annual

emission cap. In short, the DEP concluded the proposed increased

5 A-5794-14T1 use of chemicals/sulfuric acid at NEC's facility would not result

in any permitted emissions increase.

The DEP also addressed the public comments expressing

concerns about public safety. It noted "[t]here are many [s]tate

and [f]ederal laws and regulations designed to protect people and

the environment from incidents at facilities storing, handling,

or processing hazardous chemicals," including the Spill Act and

EPCRA. The report explained that NEC has an approved Discharge

Cleanup and Removal plan (DCR plan) and an approved Discharge

Prevention, Containment and Countermeasures Plan (DPCC plan), as

required by the Discharges of Petroleum and other Hazardous

Substances Rules, N.J.A.C. 7:1E-1.1 to -10.4, and specifically

N.J.A.C. 7:1E-4.2 and -4.3 (DPHS rules). The report further noted

that NEC attempted to contact the Local Emergency Planning

Committee (LEPC) to provide the DCR and DPCC plans as required by

EPCRA. The DEP explained, however, that the plans contain

security-sensitive information and are not generally available to

the public, pursuant to N.J.A.C. 7:1D-3.2(b)(7). It noted that,

under EPCRA, "the LEPC for Newark is responsible for establishing

an emergency plan covering community response and possible

evacuations in the case of releases and explosions."

The DEP issued a proposed permit action on July 7, 2015,

signaling its intention to approve the requested modification to

6 A-5794-14T1 NEC's air pollution control operating permit. As mandated by the

CAA and APCA, the DEP sent the proposed permit to the EPA for its

review and comment. 42 U.S.C.A § 7661d; N.J.A.C. 7:27-22.12. The

EPA had no comments, and, after the forty-five day review period

expired, the DEP issued the modification permit on August 24,

2015.

As a result of this action, NEC's 2012 permit was modified

to: (1) include the sulfuric acid storage tank in the existing

facility-wide sulfuric acid limit and include storage tank

emissions in the calculation to demonstrate compliance with this

limit; (2) raise the permitted water tower chemical use limit from

470 tons per year to 2267 tons per year; (3) add monitoring and

record keeping requirements to the cooling tower flow rate

limitation; and (4) add a new permit condition to regulate the pH

of the cooling tower water. This appeal followed.

II.

Appellants' primary contention on appeal is that the DEP was

required to obtain a complete public emergency response plan,

emergency notification plan, and detailed public reports before

approving the modification to NEC's air control operating permit.

They assert that such emergency planning documents are

prerequisites to approval of the modification permit pursuant to

the Spill Act, EPCRA, and Section 112(r) of the CAA. Consequently,

7 A-5794-14T1 appellants contend the lack of compliance with these statutory

provisions renders issuance of the modification permit void. In

response, NEC and the DEP argue that the modification permit

complies with all applicable statutes and the DEP did not abuse

its discretion in issuing the permit.

Appellate review of an administrative agency's final

determination is limited and deferential. In re Herrmann, 192

N.J. 19, 27 (2007). We accord "a 'strong presumption of

reasonableness' to an administrative agency's exercise of its

statutorily delegated responsibilities." Lavezzi v. State, 219

N.J. 163, 171 (2014) (citation omitted). A reviewing court may

"not substitute its judgment . . . for that of [the] administrative

agency." In re Young, 202 N.J. 50, 70 (2010).

Unless an agency's decision is "arbitrary, capricious, or

unreasonable, or [] not supported by substantial credible evidence

in the record as a whole[,]" it will be affirmed. Barrick v.

State, 218 N.J. 247, 259 (2014) (quoting In re Stallworth, 208

N.J. 182, 194 (2011)). In making this determination, a reviewing

court must examine:

(1) whether the agency's action violated the legislative policies expressed or implied in the act governing the agency; (2) whether the evidence in the record substantially supports the findings on which the agency's actions were premised; and (3) "whether in applying the legislative policies to the facts, the

8 A-5794-14T1 agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors."

[Id. at 260 (quoting In re Carter, 191 N.J. 474, 482 (2007)).]

The burden of proving arbitrary, capricious or unreasonable action

is upon the challenger. See Bueno v. Bd. of Trs., 422 N.J. Super.

227, 234 (App. Div. 2011).

An agency's "interpretation of statutes and regulations

within its implementing and enforcing responsibility" is entitled

to deference. Ibid. (citation omitted); see also Barry v. Arrow

Pontiac, Inc., 100 N.J. 57, 70 (1985) ("[T]he grant of authority

to an administrative agency is to be liberally construed to enable

the agency to accomplish the Legislature's goals." (citation

omitted)). Still, an agency's interpretation of the operative law

must not be "plainly unreasonable." Waksal v. Dir., Div. of

Taxation, 215 N.J. 224, 231 (2013) (citation omitted); see also

In re Agric., Aquacultural, & Horticultural Water Usage

Certification Rules, 410 N.J. Super. 209, 223 (App. Div. 2009)

("[A]dministrative agencies derive their authority from

legislation, the terms of which they cannot alter, nor are they

permitted to frustrate the legislative purpose."). Although

"deference is generally given to an administrative agency charged

with interpretation of the law, we are not bound by the agency's

9 A-5794-14T1 legal opinions." Bueno, supra, 422 N.J. Super. at 234 (citation

omitted); see also A.B. v. Div. of Med. Assistance & Health Servs.,

407 N.J. Super. 330, 340 (App. Div.), certif. denied, 200 N.J. 210

(2009).

In the present case, the DEP issued the air pollution control

operating permit to NEC pursuant to the APCA and the CAA. The

APCA authorizes the DEP to promulgate rules preventing,

controlling and prohibiting air pollution throughout the State.

N.J.S.A. 26:2C-8. Under the APCA, "[n]o person shall construct,

reconstruct, install, or modify equipment or control apparatus"

except in accordance with the APCA and implementing rules.

N.J.S.A. 26:2C-9.2(a). Additionally, the DEP may not issue an

operating permit or operating permit revision unless the applicant

shows that the equipment or control apparatus will operate as the

APCA and implementing rules intend. N.J.S.A. 26:2C-9.2(b).

The goal of the CAA is to "protect and enhance the quality

of the Nation's air resources[.]" 42 U.S.C.A. § 7401(b)(1). Title

V of the CAA requires certain stationary sources of air pollution

to obtain operating permits. 42 U.S.C.A. §§ 7661 to 7661(f);

Ocean Cty. Landfill Corp. v. USEPA, 631 F.3d 652, 654 (3d Cir.

2011). Title V does not impose "substantive pollution-control

requirements . . . [i]nstead, it is designed to facilitate

compliance and enforcement by consolidating into a single document

10 A-5794-14T1 all of [a] facility's obligations under the [CAA]." Util. Air

Regulatory Grp. v. EPA, __ U.S. __, ___, 134 S. Ct. 2427, 2436,

189 L. Ed. 2d 372, 385 (2014).

The Title V operating permit program is primarily implemented

and enforced by the states, with federal oversight by the EPA. In

New Jersey, the DEP is the Title V permitting authority. Ocean

Cty. Landfill, supra, 631 F.3d at 654. The operating permit

program includes public notice and comment requirements. N.J.A.C.

7:27-22.11. After the public comment period closes and the DEP

considers comments on the draft operating permit, it then sends

the EPA a copy of the proposed permit, the comments received, and

its response to those comments for the EPA's review. N.J.A.C.

7:27-22.12. If the EPA does not object to the proposed permit

within forty-five days, the DEP is then authorized to take final

action on the application for the operating permit. Ibid.

Under the CAA/Title V/APCA framework, all "major" facilities,

meaning those with the potential to emit certain threshold amounts

of various pollutants, are required to obtain an operating permit.

42 U.S.C.A. §§ 7661 to 7661(f). NEC's facility constitutes a

major facility, and, therefore, NEC was required to apply for a

permit modification. As noted, NEC sought a significant

modification of its permit to allow it to use an increased amount

of sulfuric acid in the water cooling process.

11 A-5794-14T1 The DEP issued the modification permit after determining that

the added chemicals presented no increase in emissions pollution.

Before the public comment period began, the DEP issued a notice

of its intent to approve the modified permit based on NEC's

certification that it "meets all applicable requirements of the

Federal [CAA] and the New Jersey [APCA]." Following DEP's

"evaluation of the information included in [NEC's] application,

and a review of [NEC's] compliance status, [the DEP] concluded

that this [modified] permit should be approved." After the

required public notice and comment period ended, the DEP submitted

the proposed permit for EPA review. The EPA offered no comments

or concerns, and the DEP issued the modification permit upon

determining it complied with the APCA.

Based on our review, we conclude there is sufficient credible

evidence in the record to support the agency's determination. NEC

explained why it needed to increase the amount of sulfuric acid

used in the treatment process, how the sulfuric acid would be used

to raise the pH level of the gray water, and that this would not

result in any additional acid emissions. The modified air permit

maintained the same allowable emission limits as the initial

operating permit and imposed additional monitoring and record

keeping conditions to ensure compliance. The permit application

process comported with all procedural and notice requirements, and

12 A-5794-14T1 appellants do not contend otherwise. Since NEC's application for

the modification permit complied with the APCA and its implementing

regulations, the DEP's decision to grant the permit was not

arbitrary, capricious, or unreasonable.

We reject appellants' contention that the DEP was also

required to determine whether NEC was in compliance with the Spill

Act, EPCRA, and the CAA before approving the modification permit.

We find appellants' reliance on these additional statutory and

regulatory provisions misplaced because they lie outside the air

pollution control approval process.

The Spill Act requires that facilities submit a DPCC plan and

a DCR plan. N.J.S.A. 58:10-23.11d2 and -23.11d3. While the DEP

reviews these plans to prevent discharge and provide emergency

response plans, the Spill Act's controlling provisions fail to

mention permitting, and do not link the Spill Act's emergency

planning and reporting obligations to a facility's eligibility for

a permit to operate. Moreover, the Spill Act and its implementing

regulations contain distinct enforcement mechanisms that provide

for civil administrative penalties for violations, and do not

include forfeiture or denial of a permit application. N.J.A.C.

7:1E-6.1 to 6.9.

Similarly, EPCRA also fails to note a link between its

emergency planning and reporting strictures and a facility's

13 A-5794-14T1 eligibility for an operating permit. Rather, like the Spill Act,

EPCRA provides its own unique enforcement provisions allowing for

citizen suits and the imposition of mandatory civil penalties upon

entities that fail to comply with its reporting requirements. 42

U.S.C.A. §§ 11045 and 11046.

Finally, appellants contend the DEP erred by issuing the

modified permit without first requiring NEC to comply with Section

112(r) of the CAA, also known as the Chemical Accident Prevention

Provisions (CAPP Rules). 40 C.F.R. §§ 68.1 to .220. Specifically,

they assert that "the 2012 Permit . . . included a condition which

incorporated [CAA] Section 112(r) . . . [which] places the burden

upon NEC to complete a public emergency response plan, and a public

emergency notification plan."

While NEC's initial 2012 operating permit required the

creation of a risk management plan, pursuant to Section 112(r),

this requirement only applies if the facility is producing,

processing, handling, or storing a chemical specifically listed

in 40 C.F.R. 68.130 in an amount above a certain threshold

quantity. Contrary to appellants' assertion, sulfuric acid, which

is the basis of their concern, is not a regulated substance

14 A-5794-14T1 pursuant to Section 112(r) and is not included in the list of

regulated substances codified at 40 C.F.R. 68.130.2

In any event, even if sulfuric acid is a regulated substance

and the CAPP rules apply, as appellants contend, Section 112(r)

and the CAPP rules make no mention of their bearing on permitting

decisions. Simply stated, while separate, independent federal and

state laws may impose public emergency response and notification

planning requirements upon industrial facilities such as NEC, they

did not govern the DEP's decision to approve NEC's application to

modify its air permit.

Affirmed.

2 In their reply brief, appellants additionally argue that NEC stores ammonia in two tanks onsite, and that Section 112(r) similarly applies to ammonia. However, an issue that is not addressed in a party's initial merits brief is deemed to be waived. See Drinker Biddle & Reath LLP v. N.J. Dept. of Law & Pub. Safety, 421 N.J. Super. 489, 496 n.5 (App. Div. 2011); Liebling v. Garden State Indem., 337 N.J. Super. 447, 465-66 (App. Div.), certif. denied, 169 N.J. 606 (2001). It is improper for a party to use a reply brief to raise an issue for the first time or enlarge the main argument. State v. Smith, 55 N.J. 476, 488, cert. denied, 400 U.S. 949, 91 S. Ct. 232, 27 L. Ed. 2d 256 (1970); L.J. Zucca, Inc. v. Allen Bros. Wholesale Distribs. Inc., 434 N.J. Super. 60, 87 (App. Div.), certif. denied, 218 N.J. 273 (2014); N.J. Citizens Underwriting Reciprocal Exch. v. Kieran Collins, D.C., LLC, 399 N.J. Super. 40, 50 (App. Div.), certif. denied, 196 N.J. 344 (2008); Borough of Berlin v. Remington & Vernick Eng'rs, 337 N.J. Super. 590, 595-96 (App. Div.), certif. denied, 168 N.J. 294 (2001).

15 A-5794-14T1