Indep. Energy v. Nj Dept. of Env.

645 A.2d 166, 275 N.J. Super. 46
CourtNew Jersey Superior Court Appellate Division
DecidedJuly 8, 1994
StatusPublished
Cited by5 cases

This text of 645 A.2d 166 (Indep. Energy v. Nj Dept. of Env.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Indep. Energy v. Nj Dept. of Env., 645 A.2d 166, 275 N.J. Super. 46 (N.J. Ct. App. 1994).

Opinion

275 N.J. Super. 46 (1994)
645 A.2d 166

INDEPENDENT ENERGY PRODUCERS OF NEW JERSEY, APPELLANT,
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION AND ENERGY AND PUBLIC SERVICE ELECTRIC AND GAS COMPANY, RESPONDENTS.

Superior Court of New Jersey, Appellate Division.

Argued June 13, 1994.
Decided July 8, 1994.

*50 Before Judges PETRELLA, BAIME and CONLEY.

Mark L. First argued the cause for appellant (Reed, Smith, Shaw & McClay, attorneys; Mr. First, of counsel and on the brief; and Van Ness, Feldman & Curtis, attorneys; Peter L. Dickson, of counsel).

Gregory Eisenstark, Deputy Attorney General, argued the cause for respondent Department of Environmental Protection & Energy (Deborah T. Poritz, Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Mr. Eisenstark, on the brief).

Richard B. McGlynn argued the cause for respondent Public Service Electric and Gas Co. (LeBoeuf, Lamb, Greene & MacRae, attorneys; Mr. McGlynn, on the brief).

The opinion of the court was delivered by BAIME, J.A.D.

The Independent Energy Producers of New Jersey (IEPNJ), a trade association whose members are engaged in the construction and operation of non-utility generating plants, appeals from a decision of the Department of Environmental Protection and Energy (Department) granting an air pollution control permit to Public Service Electric and Gas Company (PSE & G) for the *51 repowering of its existing Bergen Generating Station and a conditional permit for the construction of a new facility at the same site. The principal question presented is whether PSE & G was required to obtain a certificate of need under the Electric Facility Need Assessment Act (N.J.S.A. 48:7-16 to -25) as a prerequisite to obtaining an air pollution control permit. We hold that a certificate of need was not required for the repowering phase of the project. However, we conclude that the Department erred by granting a conditional air pollution control permit for the construction of the new facility at the same site.

I.

The facts are not in dispute. On January 15, 1992, PSE & G filed an application for an air pollution control permit for its Bergen generating station project. The project consists of two phases. In Phase I, the existing 627 MW capacity plant will be repowered by replacing two steam generating units, each rated at 285 MW, with four combined-cycle natural gas turbines capable of producing 425 MW of power. An existing steam turbine will also produce power using steam recovered from gas turbines. So too, an existing generator will continue to produce 17 MW of power. The repowering phase of the project will increase the installed power of the existing plant from 627 MW capacity to 667 MW capacity. In Phase II, new combined-cycle capacity of approximately 650 MW will be added by constructing four additional combined-cycle turbines, with a similar routing of steam to a second existing steam turbine generator.

The existing Bergen generating station is located on a 110 acre site in Ridgefield, facing the Overpeck Creek to the north, the Hackensack River to the southwest, and the New Jersey Turnpike immediately to the east. IEPNJ does not dispute the fact that portions of the existing station are outdated and should be replaced with more efficient, state-of-the-art equipment. We note in that respect that the original plant was constructed in the 1950's. Replacement of the existing steam boilers with combustion gas *52 turbines will increase energy producing efficiency while substantially decreasing emission of pollutants into the atmosphere. In addition, Phase I will replace the existing oil tank with one less than half its size. Exhaust stacks will be 90 feet shorter than those in place. The existing "once-through cooling design" will be replaced with a "closed-loop" system, reducing the heat load to the surrounding water bodies by utilizing "wet-dry type mechanical-draft coolers." In short, the record contains overwhelming evidence that modernization of the existing station in Phase I will enhance its operational efficiency and will result in significant improvement in the environmental quality of the region.

If constructed, Phase II will consist of four additional gas turbine engines, with a combined total capacity of 650 MW. As noted earlier, there will be a similar routing of steam to a second existing steam turbine generator. If Phase II receives the requisite regulatory approvals and is constructed as planned, the total combined generating capacity of the Bergen station will be 1,300 MW.

The Department's initial review of PSE & G's permit application and related documentation lasted more than one year and was extremely thorough. On February 18, 1993, the Department issued a draft permit and, shortly thereafter, published notice of a public hearing. The hearing was conducted subsequently on March 18, 1993. IEPNJ did not appear at the public hearing, but filed written comments in which it stated its belief that the Electric Facility Need Assessment Act (EFNA) applied to the Bergen project and, therefore, a certificate of need was required. We will examine the requirements of EFNA in greater depth later in this opinion. Suffice it to say at this point that the statutory scheme bars a public utility from commencing construction of any electric facility without first obtaining a certificate of need. N.J.S.A. 48:7-19. The Act also prohibits a governmental agency from issuing any permit or license required for such construction or substantial expansion prior to issuance of a certificate of need. Ibid. EFNA defines an electric facility as (1) any electric generating *53 unit or combination of units at a single site with a combined production of 100 MW or more, or (2) any electric generating units added to an existing electric generating facility which will increase its installed capacity by 25% or by more than 100 MW. N.J.S.A. 48:7-18d(1) and (2). In its written comments, IEPNJ suggested that an inquiry should be conducted by way of a "declaratory ruling" under the Administrative Procedure Act (N.J.S.A. 52:14B-1 to -15). However, IEPNJ never specifically requested such a ruling. Nor did it file objections, questions or comments with regard to air emission parameters.

On May 27, 1993, the Department's hearing examiner issued a detailed report containing his findings on the Bergen station project and recommending changes in the permit conditions in response to the comments received. These revisions dealt solely with monitoring conditions for the cooling water and are not germane to this appeal. In response to IEPNJ's contention that a certificate of need was required under EFNA, the hearing examiner found that the two phases of the Bergen station project, although interrelated in certain aspects, were separate and distinct. In reaching this conclusion, the hearing examiner emphasized that Phase I of the project involved replacing and repowering the existing facility and was not contingent upon approval of Phase II. Because the net increase in the installed capacity of the existing plant was 40 MW, less than 100 MW or 25% of the station's current capacity, the hearing examiner concluded that Phase I did not require a certificate of need. In contrast, Phase II, if constructed, would have a generating capacity of 650 MW.

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645 A.2d 166, 275 N.J. Super. 46, Counsel Stack Legal Research, https://law.counselstack.com/opinion/indep-energy-v-nj-dept-of-env-njsuperctappdiv-1994.