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LIPA apparently believes, contrary to all evidence, that it need not comply with the State Environmental Quality Review Act (“SEQRA”)[1] before it approves 20-year, fixed rated Power Purchase Agreements for commercial solar electrical generating facilities.  One reason may be that it believes the State exempted it from environmental review in 2011 when the State enacted the Power New York Law of 2011.[2]  If so, LIPA is wrong.

The Power New York Law of 2011 amended and reenacted Chapter 10 of the Public Service Law, which addresses the siting of major electrical generating facilities.  The former version of Article 10 lapsed on January 1, 2003.  The earlier version of Article 10 applied to the siting of any electrical generating facility with a rated output of 80 MW or more.  The goal was to provide a single procedure to gain approval for the site of major power plants without having to deal with myriad and conflicting local laws, and SEQRA.  Few if any base load power plants, intended to operate 24-hours a day to provide a steady source of power for the system, were approved once Article 10 lapsed.

The Power New York Law of 2011 is also designed to provide a single administrative proceeding for the siting of major facilities.  The number of major facilities subject to Article 10 expanded, however, because the threshold for “major facilities” was reduced from 80 MW to 25 MW.[3]  At the same time, the Legislature added a new Section 173 to the Public Service Law.  Section 173 makes clear that Article 10 fully applies to all “major electric generating facilities which any such authority [including LIPA] builds or causes to be built.”  However, “[f]or generating facilities which are not major electric generating facilities, none of the above named authori­ties shall be permitted to serve as lead agency for purposes of environ­mental review pursuant to the provisions of the environmental conserva­tion law.”

Why would the Legislature bar LIPA from serving as lead SEQRA agency for actions involving non-major electrical power facilities (i.e., those with a rated output of less than 25 MW)?  The reason becomes clear when the Assembly Debates are reviewed.  Concern was expressed about the way LIPA handled electrical power facilities that were not major (less than 80 MW) under the old Article 10.  Numerous peaking facilities (i.e., facilities designed to be turned on only when the power is needed during peak hours) were rated at 79.5 MW to avoid going through the very public review process under Article 10.  Although the LIPA approvals were subject to SEQRA, LIPA repeatedly declared itself to be lead SEQRA agency, and inevitably adopted a negative declaration so that a Draft Environmental Impact Statement would not have to be prepared.  The result was that peaker plants went wherever LIPA found them to be convenient, without regard for environmental impacts.[4] Assemblyman Losquadro described the problem thusly (Assembly Debate June 22, 2011 p. 83 – 84):

The previous threshold of 80 megawatts led to a proliferation of 79 megawatt peakers all over the place and it was just a mish-mash.

Assemblyman Cahill then commented (Assembly Debate June 22, 2011 p. 84):

[J]ust going back to your previous point that may be of interest to you as well. In this legislation, talking about those 79.5 megawatt peaker plants that were built in New York City and on Long Island, this legislation would specifically prohibit the Power Authority of the State of New York and the Long Island Power Authority from taking lead agency status in the development of a plant that they wish to develop themselves, which may be something that would have prevented those 79.5 megawatt plants from being built back then.

One comment made during the debates in the Assembly in 2011 shows how quickly expectations have changed with regard to the role solar electric generating facilities will play in helping to meet our power needs.  Assemblyman Losquadro assumed that the definition of major facilities in the Power New York Law would force all review of electric generating facilities into Article 10 of the Public Service Law:

Well, I’ll tell you one thing that I do like about this legislation is the fact that you did drop the megawatt threshold from 80 down to 25, because for any commercially-viable project, there’s really going to be nothing built less than 25 megawatts.

Within less than a year of the adoption of Public Service Law §173, LIPA issued a series of requests for proposal for renewable energy projects, all of which sought renewable energy projects under 25 MWs.  By resolution dated June 28, 2012, the Trustees established LIPA’s Clean Solar Initiative Feed-In Tariff under SC-11 for the purchase of up to 50 MW of distributed solar PV generation renewable resources for a fixed price of $0.22 per KWh under a 20-year PPA (“FIT I”).  The maximum project size that would be considered under FIT I was 10 MW.  On October 3, 2013, LIPA’s Trustees approved the FIT II program which sought to add an additional 100 MW of renewable energy, but no project could exceed 2 MW.  Then, on October 18, 2013, LIPA issued an RFP for an additional 280 MW of on-Island renewable energy.  The 280 MW RFP set a minimum size requirement of 2 MW, and a maximum of 280 MW.  Nevertheless, on December 11, 2014, when LIPA announced its selections for negotiation of Power Purchase Agreements pursuant to the 280 MW RFP, eleven commercial solar projects, totaling approximately 122.1 MW of installed capacity, were announced, the largest of which was 24.99 MW.  Thus, every renewable energy project selected by LIPA since Public Service Law §173 was enacted has been under 25 MW, thus proving that, when guaranteed a fixed price per kWh far above the cost of energy on the open market, projects less than 25 MW are indeed economically viable. It is difficult to imagine that LIPA has not intentionally kept commercial solar projects below 25 MW in order to avoid having the projects go through the Article 10 process.  Without having to deal with a Siting Board appointed by the Public Service Commission, and without having to serve as lead SEQRA agency, LIPA appears to have concluded that it can best control the timing of projects if those projects remain under 25 MW.  The problem is, LIPA is acting on a faulty premise:  because it cannot serve as lead SEQRA agency, it need not comply with SEQRA at all before it approves Power Purchase Agreements.

When Public Service Law §173 was adopted, the assumption was that if LIPA could not be lead agency on its own projects, the Towns would step up and conduct proper environmental review.  Unfortunately, with the exception of a proposed commercial solar electrical generating facility in Middle Island, where the Brookhaven Town Board adopted a positive declaration,[5] no other proposed commercial solar farm has resulted in a positive declaration requiring preparation of a DEIS.  The cumulative impacts caused by commercial solar electrical generating facilities which should be examined in a Generic Environmental Impact Statement have been addressed in earlier blogs.[6] The key is, Towns must understand that just because LIPA has approved a 20-year Power Purchase Agreement, they cannot assume that it has examined the environmental impacts of the project; it has not.

In fact, not only has LIPA not conducted environmental review before approving Power Purchase Agreements for commercial solar electric generating facilities, its approvals are in complete derogation of its SEQRA obligations.

Nothing in Public Service Law § 173 suggests or implies that the Legislature intended to exempt LIPA altogether from its SEQRA obligations.  Indeed, the opposite is true.  The reason Section 173 was enacted was because the Legislature wanted to make certain LIPA would no longer act without undertaking proper environmental review of its own projects.  The Legislature could not have intended to exempt LIPA from SEQRA altogether because LIPA would then be free to approve these projects whenever it wanted without any environmental review – the very harm the Legislature sought to overcome when it barred LIPA from serving as lead SEQRA agency on its own projects.  In fact, SEQRA requires that LIPA withhold approval of any Power Purchase Agreement until the Town where the project will be located completes its SEQRA review.

While LIPA cannot serve as lead SEQRA agency, it remains an “involved agency.”[7]  As such, LIPA is obligated to provide relevant information to the lead agency.[8]  More importantly, as an involved agency, LIPA is barred from taking any action with regard to the Power Purchase Agreement until the lead agency either issues a negative declaration, or accepts a Draft Environmental Impact Statement as complete.[9]

CONCLUSION

As noted in earlier Blogs, PSEG-LI conducted a reliability study, and concluded that LIPA has sufficient energy sources to maintain reliability through 2024.  Thus, the rush to enter into 20-year Power Purchase Agreements at fixed prices 2-3 times the cost of power on the open market with commercial solar providers makes no sense.  Even if these out of State commercial giants continue to be permitted to cover property entirely with solar panels, between 5 and 6 acres of open space per MW will be lost to these projects.  Because distributed solar panels on rooftops use up no open space, and the electricity goes into the LIPA distribution system at virtually no cost to LIPA or impact on the transmission system, LIPA should be focusing its efforts on ways to maximize distributed solar power.  While at one time, LIPA expressed fear that distributed power was problematic because the owners of structures with solar panels on the rooftops were not paying LIPA for the power used, which would result in a loss of revenue, LIPA has eliminated that concern.  Earlier this year, it adopted a decoupling mechanism which allows LIPA to maintain needed revenue based on the number of customers it has, and not just on kWhs sold.  Each RFP LIPA issues puts more upward stress on the cost of open space, making affordable housing more difficult, while eliminating scenic vistas and altering the character of communities.

LIPA must stop approving Power Purchase Agreements with providers of commercial solar power before SEQRA review has been completed.  At the same time, Towns must take their responsibilities more seriously when it comes to being SEQRA lead agencies with regard to proposed commercial solar projects.  No more commercial solar electrical generating projects should be approved until a Generic Environmental Impact Statement is prepared so that the cumulative and long term impacts of these projects can be fully explored.

[1] ECL Article 8.  The DEC’s Regulations are found at 6 NYCRR Part 617.

[2] Ch. 388 of 2011, approved August 4, 2011.

[3] N.Y. Public Service Law §160(2).

[4] N.Y. Assembly Debates, June 22, 2011 Ch. 388, Power NY Act of 2011, pp. 73-76, 83-87, 109-113.

[5] Town of Brookhaven Resolution 2014-484, adopted June 24, 2014.

[6] “Tiger Salamanders and Industrial Scale Solar Facilities in Suffolk County,” May 2015.

[7] 6 NYCRR §617.2(s):  “Involved agency means an agency that has jurisdiction by law to fund, approve or directly undertake an action. If an agency will ultimately make a discretionary decision to fund, approve or undertake an action, then it is an “involved agency”, notwithstanding that it has not received an application for funding or approval at the time the SEQR process is commenced. The lead agency is also an “involved agency.”

[8] 6 NYCRR §617.3(e): “Each agency involved in a proposed action has the responsibility to provide the lead agency with information it may have that may assist the lead agency have that may assist the lead agency in making its determination of significance, to identify potentially significant adverse impacts in the scoping process, to comment in a timely manner on the EIS if it has concerns which need to be addressed and to participate, as may be needed, in any public hearing. Interested agencies are strongly encouraged to make known their views on the action, particularly with respect to their areas of expertise and jurisdiction.”

[9] See 6 NYCRR §617.3(a)  (“ No agency involved in an action may undertake, fund or approve the action until it has complied with the provisions of SEQR”) and  6 NYCRR§617.3(c)(1 and 2) (“An application for agency funding or approval of a Type I or Unlisted action will not be complete until: (1) a negative declaration has been issued; or (2) until a draft EIS has been accepted by the lead agency as satisfactory with respect to scope, content and adequacy.”