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TransGas Energy Systems, LLC v. New York State Board on Electric Generation Siting and Environment

September 22, 2009

IN THE MATTER OF TRANSGAS ENERGY SYSTEMS, LLC, PETITIONER,
v.
NEW YORK STATE BOARD ON ELECTRIC GENERATION SITING AND ENVIRONMENT, ET AL., RESPONDENTS.



Proceeding pursuant to CPLR article 78 to review a determination of the New York State Board on Electric Generation Siting and the Environment dated July 15, 2008, which denied the petitioner's application for a rehearing of a determination dated March 21, 2008, dismissing the petitioner's application for a certificate of environmental compatibility and public need. Motion by the respondent City of New York to dismiss the petition insofar as asserted against it for failure to timely join it as a necessary party.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

ROBERT A. SPOLZINO, J.P., PETER B. SKELOS, MARK C. DILLON and JOSEPH COVELLO, JJ.

DECISION, ORDER & JUDGMENT

ORDERED that the motion of the respondent City of New York to dismiss the petition insofar as asserted against it for failure to timely join it as a necessary party is denied; and it is further,

ADJUDGED that the determination is confirmed, the petition is denied, and the proceeding is dismissed on the merits, without costs or disbursements.

On December 24, 2002, the petitioner, TransGas Energy Systems, LLC (hereinafter TransGas), submitted an application to the respondent New York State Board on Electric Generation Siting and the Environment (hereinafter the Board), pursuant to former article X of the Public Service Law (hereinafter article X), to obtain a certificate of environmental compatibility and public need to construct and operate a 1,110-megawatt electric and steam cogeneration plant (hereinafter the power plant). TransGas proposed to construct the power plant on an eight-acre site located on the Greenpoint-Williamsburg waterfront in Brooklyn.

The project required the construction of a 6.4-mile pipeline under the streets of the respondent City of New York to transport water to the power plant. Further, in order to sell steam to the Consolidated Edison Company of New York (hereinafter Con Edison), as TransGas proposed, TransGas had to construct a steam main interconnection, which would originate from the power plant and run under the East River to Con Edison's steam facilities in Manhattan.

The City, and the respondents Brooklyn Borough President, Brooklyn Community Board One, and Greenpoint-Williamsburg Waterfront Task Force, opposed TransGas's application on the ground, inter alia, that the power plant was incompatible with an approved plan to rezone and redevelop the Greenpoint-Williamsburg waterfront for residential, commercial, and light manufacturing uses, and to create extensive public access to the waterfront. The centerpiece of this plan was the creation of a 28-acre park on the waterfront, which would include the eight-acre site on which TransGas proposed to build the power plant.

After an evidentiary hearing on TransGas's application held before designated hearing examiners, the examiners recommended to the Board that the application be denied for failure to mitigate adverse environmental impacts. In an effort to mitigate the identified adverse impacts, TransGas amended its application by proposing to construct the power plant, initially contemplated as an above-ground facility, underground. Without holding an additional hearing on the amendment, the Board decided that it did not have the statutory authority to grant TransGas permission to lay its water and steam pipes under public streets and through the public property under the East River, and, concomitantly, that TransGas was required to obtain revocable consents from the City, as provided by New York City Charter § 364, in order to route its pipes through the City's public property. The Board thus held the matter in abeyance to allow TransGas to obtain such consent from the City. TransGas refused to attempt to obtain that consent, asserting that the City was precluded by statute from requiring it to obtain revocable consents, and that the Board had authority to grant such permission. TransGas also advanced a third configuration of its proposed power plant, which would not require the use of municipal property.

The Board ultimately dismissed TransGas's application to build an underground power plant on the ground that TransGas had not obtained permission to route the necessary water and steam pipes through the municipal property. The Board also denied TransGas's application to construct the third configuration of the power plant on the merits, finding, inter alia, that the power plant's underground oil storage tank would be incompatible with public health and safety and the City's Zoning Resolution.

TransGas sought a rehearing of the Board's determination to deny its application to construct an underground facility, and of the Board's discrete factual finding with respect to the oil storage tank. However, the Board denied TransGas's application for a rehearing.

In this proceeding pursuant to CPLR article 78 commenced in this Court, TransGas seeks review of the Board's denial of its application for a rehearing. In its first cause of action, TransGas challenges, as arbitrary, capricious, and an abuse of discretion, the Board's determination to dismiss its application for a certificate to construct an underground power plant on the ground that it failed to obtain revocable consents from the City to lay pipes in municipal property. In its second cause of action, TransGas seeks remittal to the Board for a further evidentiary hearing as to the merits of its proposed underground power plant, asserting that the failure to hold an additional hearing on the proposal was arbitrary, capricious, and an abuse of discretion. The third cause of action was withdrawn. In its fourth cause of action, TransGas seeks to annul the finding by the Board pertaining to the oil storage tank.

The City, joined as a party to this proceeding after the expiration of the statute of limitations, moves to dismiss the petition insofar as asserted against it for failure to timely join it as a necessary party. Although dismissal would be required if the City was a necessary party to this proceeding (see Windy Ridge Farm v Assessor of Town of Shandaken, 11 NY3d 725, 727; Matter of Artrip v Incorporated Vil. of Piermont, 267 AD2d ...


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