On August 1, 2018 New York State’s Department of Environmental Conservation (DEC) CPV Valley Permit denied (DEC letter to CPV August 2018) the renewal of the Air State Facility Permit for the Competitive Power Ventures (CPV) Valley Energy Center natural gas power plant located in Orange County, New York. In this post I will describe the decision, what I think is going to happen, potential ramifications, and rationale for the decision. Initially, I thought it might have been an oversight on the part of CPV Valley but the more I poked around the more evidence surfaced that this was a politically motivated decision that will likely end up in court.
Background and Decision
On July 8, 2018, the Middletown Times-Herald Record reported that the “$900 million, 680-megawatt plant built between Interstate 84 and Route 6 will be connected to a natural-gas pipeline in a matter of days, and should begin full-time operation in a matter of weeks.” At the time the last apparent hold up was connecting the plant to the natural gas transmission system after New York Governor Cuomo’s administration tried to block the construction of the connecting pipeline after the plant was nearing completion. However, CPV Valley did not apply for their Title V operating permit and DEC said in their letter that “CPV may not lawfully operate the facility”.
On August 3, 2018, the Middletown Times-Herald Record reported:
The state Department of Environmental Conservation announced its decision in a letter to CPV officials on Wednesday, one day after the air permit DEC granted in 2013 expired. A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.
It was not immediately clear if CPV, which had planned to begin operating the $900 million power plant in Wawayanda this month, will contest the decision, or comply with it by applying for a Title V permit. It also was unclear how long it would take to obtain such a permit and what obstacles the company could face. The DEC letter said the permit application requires a public comment period and a 45-day review period for the EPA.
What is going to happen?
I believe that this article is correct that this represents a delay rather than a sign that the facility will not operate someday. The Albany Times Union headline that says State pulls plug on controversial Orange County power plant is incorrect and a Riverkeeper article that suggests that this permit denial indefinitely shuts down the power plant are wrong.
This is a controversial power plant for two reasons. Firstly, there is strong environmentalist opposition to any fossil fuel infrastructure and second there is an associated political scandal. This is election season in New York and the Governor is trying to keep his environmental credentials as clean as possible. This facility’s opponents consistently link this plant to fracked natural gas and point out that it will delay the transition to renewables and call for its permanent closure. Nothing about this administration shocks me anymore so even shutting down a plant needed to replace power from the closure of Indian Point so I would not be that surprised to see them propose that but I can guarantee that there is no way that the permitting process for the missing permit will be completed until well after the election.
The political scandal occurred when a top Cuomo aide was found guilty of getting an executive from CPV to get his wife a high paying “low-show” job for his wife. The payments were in exchange for helping to win state power contracts. Apparently CPV took the lobbying approach to get their power plant commissioned because there is a money trail to politicians associated with the plant. As a result of this there have been calls to prevent the power plant from opening.
Ramifications
I have written about the role of CPV Valley as replacement power for Indian Pont (a nuclear station that Cuomo has forced into accepting a shutdown in April 2021. The New York Independent System Operator concluded that there would be no issues with replacement power if three major generation facilities were completed including CPV Valley. As noted above, because I believe this represents a delay rather than a cancellation I do not expect that to be an issue. However, if Cuomo’s political team decides to go all in for the environmentalist vote and he refuses to give them an operating permit reliability issues will arise.
I have always been on the technical side of things in the power industry. My dealings with the business side of the house were uniformly stressful because their idea of long lead time was tomorrow and environmental permitting takes time so I was always pushed to produce faster. Nonetheless I question whether permanently shutting down a completed power plant makes NY “Open for Business” generally. If I were on the business side of a power generating company I certainly would not be comfortable proposing to build a new power plant to replace the old power plants that the NYS Department of Environmental Conservation (DEC) wants shut down. It will be interesting to see how this turns out not only in the short term but also the long haul.
Rationale
I did not understand how CPV Valley got into a position where they did not even have an application listed on the NYS DEC draft Title V permit website. Title V permits are described as the “operating permit”. How in the world did CPV Valley think that they would not need that?
The Middletown Times Herald-Record article says “A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.” Trying to determine what that statement meant was a challenge.
According to the CPV Valley website description of the permitting approval process the first permitting submittal was completed in March 2008. The Town of Wawayanda Planning Board SEQRA Findings Statement was published on May 23, 2012.
In 2013 there was a revision to 6 CRR-NY 201-6.2 Permit Applications to clarify the acceptable time frame for the submittal of Title V permit applications: Renumbered Paragraphs 201- 6.2(a)(1) through 201-6.2(a)(4) were revised to clarify the acceptable time frame for the submittal of Title V permit applications. According to this rule they should have had a complete application prior to construction:
The owner or operator of a facility subject to this Subpart shall submit a complete application, as defined in Part 621 of this Title and this Subpart, for initial issuance of a title V permit, or renewal, in accordance with the timeframes established under paragraphs (1) through (6) of this subdivision:
(1) Prior to the commencement of construction of a new facility subject to permitting under this Subpart
The SEQRA Findings Statement mentions that they submitted an “application for regulatory agency review in conjunction with Federal and State PSD and non-attainment new source review requirements and process” before March 2012. There is no mention of a Title V permit in the document.
It looks like there was a rule change after the project was permitted and the revision clearly says that a new facility has to have a complete Title V permit before they can begin construction. I can only guess that CPV Valley thought that because they had a State facility permit that it would roll over as if it were an existing facility modification per sub-sections (2) and (3):
(2) Prior to the commencement of operation of new emission unit(s) or modified emission units at an existing facility that make the facility subject to title V permitting. The owner or operator of a facility subject to this provision may choose to apply for a State facility permit pursuant to section 201-5.2 of this Part. Upon issuance, that permit shall authorize both construction and operation of the new or modified emission units until a title V permit is issued in accordance with this Subpart.
(3) Prior to the commencement of construction of a new emission unit at an existing title V facility. The owner or operator of an existing title V facility, which is being modified by the addition of a new emission unit comprised solely of new emission sources, may apply for a State facility permit pursuant to section 201-5.2 of this Part that will authorize construction and operation of the new emission unit upon issuance. A title V permit modification is required within one year of the commencement of operation of the new emission unit.
I did a Google Search for CPV Air State Facility Permits and found the pre-construction permit (CPV Valley Permit). It turns out the CPV Valley thought that were all right because their permit said “A Title V permit application must be submitted to the Department within one year of commencement of operation of this facility.” The rationale was that the application would include “start-up, shutdown, and fuel switching data to establish enforceable combustion turbine start-up, shutdown, and fuel switching emission rates for NOx, CO, and NH3, and confirm that such established rates would not result in a violation of applicable NAAQS.”
Back to the statement from the Middletown Times Herald-Record that “A department official explained that a change in federal regulations required CPV to get a so-called Title V permit from the Environmental Protection Agency before starting up the plant, something the company had not done.” I am no lawyer but as far as I can tell the change in the DEC regulations in response to the federal regulations came in 2013 before the CPV Air State Facility permit was issued that explicitly said the Title V application had to be submitted within one year of the commencement of operations and if it was after CPV Valley has a permit that shields them from this change. I don’t think that there is any chance that this won’t be headed to court.
Pragmatic Environmentalist of New York 