| Matter of TransGas Energy Sys., LLC v New York State Bd. on Elec.Generation Siting & Envt. |
| 2009 NY Slip Op 06696 [65 AD3d 1247] |
| September 22, 2009 |
| Appellate Division, Second Department |
| In the Matter of TransGas Energy Systems, LLC,Petitioner, v New York State Board on Electric Generation Siting and Environment etal., Respondents. |
—[*1] Peter McGowan, Albany, N.Y. (John C. Graham of counsel), for respondent New York StateBoard on Electric Generation Siting and Environment. Michael A. Cardozo, Corporation Counsel, New York, N.Y. (William Plache, SarahKogel-Smucker, and Christopher King of counsel), for respondent City of New York. Susan J. Kraham, New York, N.Y., for respondents Brooklyn Borough President, BrooklynCommunity Board One, and Greenpoint-Williamsburg Waterfront Task Force.
Proceeding pursuant to CPLR article 78 to review a determination of the New York StateBoard on Electric Generation Siting and the Environment dated July 15, 2008, which denied thepetitioner's application for a rehearing of a determination dated March 21, 2008 dismissing thepetitioner's application for a certificate of environmental compatibility and public need. Motionby the respondent City of New York to dismiss the petition insofar as asserted against it forfailure to timely join it as a necessary party.
Ordered that the motion of the respondent City of New York to dismiss the petition insofaras 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 isdismissed on the merits, without costs or disbursements.
On December 24, 2002 the petitioner TransGas Energy Systems, LLC (hereinafterTransGas) submitted an application to the respondent New York State Board on ElectricGeneration Siting and the Environment (hereinafter the Board), pursuant to former article X ofthe Public Service Law to obtain a certificate of environmental compatibility and public need toconstruct and operate a 1,110-megawatt electric and steam cogeneration plant (hereinafter thepower plant). TransGas proposed to construct the power plant on an eight-acre site located on theGreenpoint-Williamsburg waterfront in Brooklyn.
The project required the construction of a 6.4-mile pipeline under the streets of the [*2]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 (hereinafterCon 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 steamfacilities in Manhattan.
The City, and the respondents Brooklyn Borough President, Brooklyn Community BoardOne, and Greenpoint-Williamsburg Waterfront Task Force, opposed TransGas's application onthe ground, inter alia, that the power plant was incompatible with an approved plan to rezone andredevelop the Greenpoint-Williamsburg waterfront for residential, commercial, and lightmanufacturing uses, and to create extensive public access to the waterfront. The centerpiece ofthis plan was the creation of a 28-acre park on the waterfront, which would include theeight-acre site on which TransGas proposed to build the power plant.
After an evidentiary hearing on TransGas's application held before designated hearingexaminers, the examiners recommended to the Board that the application be denied for failure tomitigate adverse environmental impacts. In an effort to mitigate the identified adverse impacts,TransGas amended its application by proposing to construct the power plant, initiallycontemplated as an above-ground facility, underground. Without holding an additional hearingon the amendment, the Board decided that it did not have the statutory authority to grantTransGas permission to lay its water and steam pipes under public streets and through the publicproperty under the East River, and, concomitantly, that TransGas was required to obtainrevocable consents from the City, as provided by New York City Charter § 364, in orderto route its pipes through the City's public property. The Board thus held the matter in abeyanceto allow TransGas to obtain such consent from the City. TransGas refused to attempt to obtainthat consent, asserting that the City was precluded by statute from requiring it to obtainrevocable consents, and that the Board had authority to grant such permission. TransGas alsoadvanced a third configuration of its proposed power plant, which would not require the use ofmunicipal property.
The Board ultimately dismissed TransGas's application to build an underground power planton the ground that TransGas had not obtained permission to route the necessary water and steampipes through the municipal property. The Board also denied TransGas's application to constructthe third configuration of the power plant on the merits, finding, inter alia, that the power plant'sunderground oil storage tank would be incompatible with public health and safety and the City'sZoning Resolution.
TransGas sought a rehearing of the Board's determination to deny its application to constructan underground facility, and of the Board's discrete factual finding with respect to the oil storagetank. However, the Board denied TransGas's application for a rehearing.
In this proceeding pursuant to CPLR article 78 commenced in this Court, TransGas seeksreview 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'sdetermination to dismiss its application for a certificate to construct an underground power planton the ground that it failed to obtain revocable consents from the City to lay pipes in municipalproperty. In its second cause of action, TransGas seeks remittal to the Board for a furtherevidentiary hearing as to the merits of its proposed underground power plant, asserting that thefailure to hold an additional hearing on the proposal was arbitrary, capricious, and an abuse ofdiscretion. The third cause of action was withdrawn. In its fourth cause of action, TransGas seeksto 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 anecessary party. Although dismissal would be required if the City was a necessary party to thisproceeding (see Windy Ridge Farm vAssessor of Town of Shandaken, 11 NY3d 725, 727 [2008]; Matter of Artrip vIncorporated Vil. of Piermont, 267 AD2d 457 [1999]), contrary to the contentions of theCity and the Board, the City is not a necessary party under CPLR 1001 (a).
The City and the Board argue that the City's interest in TransGas's first cause of action isakin to that of a landowner whose real property rights will be affected by the judgment.However, in [*3]contrast to the cases relied upon by the City andthe Board (see e.g. Matter of RedHook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d452, 456-457 [2005]), the purpose of this proceeding is not to adjudicate the City's propertyrights, and no property rights, including the right to make a particular use of a specific property,will be determined by this Court. Rather, to decide TransGas's first cause of action, this Court iscalled upon to interpret Public Service Law article X to determine whether it was intended topreclude a municipality from applying local laws concerning use of municipal property, and tovest authority to permit use of municipal property in the Board. Although more immediate, theCity's interest in this Court's interpretation of article X is no different from that of any other localgovernment.
The City also is not a necessary party to the second and fourth causes of action. Although theCity may be incidentally or indirectly affected by a determination of this Court that furtherhearings are required as to the merits of the underground power plant proposal, including theissue regarding the oil storage tank, the instant proceeding was brought to review the Board'sdetermination of TransGas's article X application, not to adjudicate any rights of the City. TheCity is not indispensable to the Board's adjudication of article X applications, as the City is onlya permissive party to the proceedings before the Board (see Public Service Law former§ 166 [1] [h]; see also Governor's Mem in Support, Bill Jacket, L 1972, ch 385,1972 NY Legis Ann, at 249). There is no reason, with respect to the present proceeding, todepart from the Legislature's assessment of the nature of the City's interest in an article Xapplication (see Boston & Me. R.R. v Delaware & Hudson Co., 268 NY 382, 389 [1935][where a party's "only interest in defeating the action" was "indirect," the party was not anecessary party to the action]; cf.Matter of Gill v New York State Racing & Wagering Bd., 50 AD3d 494, 496 [2008]).Accordingly, we deny the City's motion to dismiss the proceeding as time-barred, and reach themerits of the petition.
In its first cause of action, TransGas takes issue with the Board's determination that the Citywas not precluded by Public Service Law former § 172 from requiring TransGas to obtainrevocable consents to use public property, and that the Board was not authorized to grant suchconsent. The issue is one of first impression.
Since "the question is one of pure statutory reading and analysis, dependent only on accurateapprehension of legislative intent," no deference is owed to the Board's determination of theissue (Lorillard Tobacco Co. v Roth, 99 NY2d 316, 322 [2003]; see Matter of Suffolk Regional Off-TrackBetting Corp. v New York State Racing & Wagering Bd., 11 NY3d 559, 567 [2008]; Matter of Astoria Gas Turbine Power, LLCv Tax Commn. of City of N.Y., 7 NY3d 451, 455 [2006]; Matter of Commonwealthof Mass. v New York State Bd. on Elec. Generation Siting & Envt., 197 AD2d 97, 104 n 4[1994]; cf. Matter of UPROSE v Power Auth. of State of N.Y., 285 AD2d 603, 606[2001] [deference was appropriate as to the Board's interpretation of the term "generatingcapacity"]). Nonetheless, considering the question de novo, we find that the Board's conclusionwas correct.
TransGas seeks a license from the Board to occupy the City's public property (seeCounty of Nassau v South Farmingdale Water Dist., 62 AD2d 380, 384 [1978], affd46 NY2d 794 [1978] [observing that the "right to install water lines is only a license or privilegeand not the grant of an interest in or appurtenant to real property"]). Despite the generaldelegation of power to municipalities to regulate highways and other public property within theirboundaries (see NY Const, art IX, § 2 [c] [6]; Municipal Home Rule Law §10 [1] [ii] [a] [6]; see also General City Law § 20 [10]), the Legislature "retainsultimate control" over such property and may, through the enactment of general laws, restrict amunicipality's authority in this regard (New York State Pub. Empls. Fedn., AFL-CIO v Cityof Albany, 72 NY2d 96, 101 [1988]; see County of Orange v Public Serv. Commn. ofState of N.Y., 39 AD2d 311, 317 [1972], affd 31 NY2d 843 [1972]).
TransGas contends that the Legislature delegated to the Board the Legislature's authority tolimit the City's control over public property, and to permit TransGas to use that property byenacting Public Service Law former § 172, which provides: "[n]otwithstanding any otherprovision of law, no . . . municipality . . . may, except as expresslyauthorized under [art X] by the board, require any approval, consent, permit, certificate or othercondition for the construction or operation of a major electric generating facility with respect towhich an application for a certificate hereunder has been filed." The mere appearance of theword "consent" in the statute is not dispositive of the issue of whether the statute [*4]precludes the City from requiring TransGas to obtain revocableconsents. Because "consent" is undefined by article X, the term's meaning must be gleaned fromthe context, which includes article X as a whole, and the legislative history of article X (seeState of New York v Mobil Oil Corp., 38 NY2d 460, 464 [1976]).
Article X is "a general law relating to matters of substantial State concern" (ConsolidatedEdison Co. of N.Y. v Town of Red Hook, 60 NY2d 99, 106-107 [1983]), through which lawthe Legislature intended to "pre-empt further regulation in the field of major . . .electric generating facility siting" (id. at 107 [examining art X's predecessor, PublicService Law former art VIII]). However, as an examination of the other provisions of article Xand article X's legislative history reveals, the granting of a license to occupy public property isnot, as TransGas suggests, "regulation in the field of [power plant] siting" (id. at 106).Rather, the regulatory scheme set forth in article X "provides for a comprehensive review ofenvironmental and public interest impacts and the issuance of a certificate of environmentalcompatibility and public need as a precondition to the siting" of a power plant (Matter ofCitizens for Hudson Val. v New York State Bd. on Elec. Generation Siting & Envt., 281AD2d 89, 92 [2001]).
Public Service Law former article VIII was enacted to replace "an uncoordinated reviewprocess [that] prevent[ed] a comprehensive public assessment of the need [for] and potentialimpact of a proposed" power plant and which led to delay in the construction of needed powerplants due to the multiplicity of requirements from numerous local agencies (Governor's Mem inSupport, Bill Jacket, L 1972, ch 385, 1972 NY Legis Ann, at 250). Thus, the Board was createdto provide for an expeditious review process and "to balance, in a single proceeding, the people'sneed for electricity and their environmental concerns" (Matter of Commonwealth of Mass. vNew York State Bd. on Elec. Generation Siting & Envt., 197 AD2d at 104; Matter ofCounty of Suffolk v Gioia, 96 AD2d 220, 223 [1983]).
Consonant with this purpose, article X requires certain specific findings to be made by theBoard upon completing its review, which primarily concern the need for the power plant in lightof the State's electricity requirements and energy planning objectives, the probableenvironmental impacts of the power plant, and the power plant's ability to comply with State andlocal laws, such as those concerning the environment and public health and safety (seePublic Service Law former § 168 [2] [a]-[e]). The Board is not required to make anyfindings as to whether, in light of the competing possible uses of public rights-of-way, publicproperty may or should be occupied by the proposed power plant.
Furthermore, upon making its findings, the Board is ultimately authorized to "grant or denythe application as filed or to certify the [power plant] upon such terms, conditions, limitations ormodifications of the construction or operation of the [power plant] as the board may deemappropriate" (Public Service Law former § 168 [2]). The Board is not expressly authorizedto also grant licenses to allow the owner of a certified power plant to occupy and use theproperty upon which the owner seeks to construct and operate a portion of the power plant.
Accordingly, considering both the legislative history and the other provisions of article X,we conclude that the granting of a right to occupy property is not included within article X'sregulatory scheme. Since Public Service Law former § 172 did not constitute a delegationto the Board of the authority to grant licenses to occupy public property, the authority remainswith the City, under the delegation of power to municipalities allowing them to regulate the"public ways and public places" (General City Law § 20 [10]; see NY Const, artIX, § 2 [c] [6]; Municipal Home Rule Law § 10 [1] [ii] [a] [6]). As such, the Citywould not be precluded by Public Service Law former § 172 from requiring TransGas toobtain revocable consents to occupy the City's public property. Since the proposed power plantcould not be built without laying pipes under the City's public property, and because TransGashas refused to seek revocable consents from the City to do so, the Board's dismissal ofTransGas's application was not arbitrary, capricious, or an abuse of discretion.
In its second cause of action, TransGas asserts that the Board violated the mandate of PublicService Law former § 168 (1) by failing to hold a hearing on TransGas's amendment to itsoriginal application prior to making a determination as to the amended application. Contrary toTransGas's contention, if a decision can be rendered on an amended application based upon therecord made at the [*5]evidentiary hearing held with respect tothe original application, Public Service Law former § 168 (1) does not require that afurther hearing be held. Since the issue regarding revocable consents was addressed during thehearing on TransGas's original application, the Board's final decision to dismiss the amendedapplication due to TransGas's failure to obtain revocable consents was rendered "upon the recordmade before the presiding examiner" (Public Service Law former § 168 [1]). As such,TransGas's second cause of action must fail.
TransGas's remaining contentions are academic in light of our determination. Spolzino, J.P.,Skelos, Dillon and Covello, JJ., concur.