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20170804-5157 FERC PDF (Unofficial) 8/4/2017 2:47:40 PM

UNITED STATES OF AMERICA


BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

Millennium Pipeline Company, L.L.C. ) Docket No. CP16-17-002

MOTION TO INTERVENE AND COMMENTS OF


CPV VALLEY, LLC

Pursuant to Sections 212 and 214 of the Rules of Practice and Procedure of the Federal

Energy Regulatory Commission (Commission), 18 C.F.R. 385.213 and 385.214, CPV

Valley, LLC (CPV Valley) hereby files this Motion to Intervene and Comments in the above-

referenced proceeding.

I.
MOTION TO INTERVENE

In support of its Motion to Intervene, CPV Valley submits as follows:

A. Correspondence and Communications

Correspondence and communications regarding this matter should be addressed to the

following persons, and the same should also be designated for service on the Commissions

official list for this proceeding:1

Elizabeth W. Whittle Thomas Rumsey


Nixon Peabody LLP CPV Valley, LLC
799 Ninth Street, N.W. c/o Competitive Power Ventures, Inc.
Suite 500 50 Braintree Hill Office Park, Suite 300
Washington, DC 20001 Braintree, MA 02184
202-585-8338 518-883-1261
202-585-8080 (fax) 508-579-6317 (fax)
ewhittle@nixonpeabody.com trumsey@cpv.com

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CPV Valley respectfully requests that the Commission waive Rule 203(b) of its Rules of
Practice and Procedure, 18 C.F.R. 385.203(b), to the extent necessary to allow each of the
persons listed below to be included on the official service list for this proceeding.
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Jonathan Odell
Senior Vice President and General Counsel
Competitive Power Ventures, Inc.
8403 Colesville Rd
Suite 915
Silver Spring, MD 20910
240-723-2329
240-723-2339 (fax)
jodell@cpv.com

B. CPV Valley

CPV Valley owns, is constructing, and will operate a gas-fired combined cycle

generating station with a projected capacity of 650 MW located in Wawayanda, New York

(CPV Valley Energy Center), which it is interconnecting to the New York Independent System

Operator, Inc. (NYISO) transmission system. The CPV Valley Energy Center is being built

using advanced and highly efficient power generation technology. The CPV Valley Energy

Center is approximately 80% complete and is scheduled to first fire in October 2017 and

commence commercial operation in January 2018.

On November 9, 2016, the Commission issued an Order Denying Motion to Dismiss and

Issuing Certificate (Certificate) to Millennium Pipeline Company, L.L.C. (Millennium)

under Section 7 of the Natural Gas Act (NGA), 15 U.S.C. 717, et seq., to construct an

approximately 7.8-mile lateral pipeline from the Millennium mainline pipeline system to the

state-of-the-art CPV Valley Energy Center (Valley Lateral Project) that will supply the CPV

Valley Energy Center with the natural gas it needs to operate.

CPV Valley has executed a Precedent Agreement with Millennium and will be a shipper

on the Valley Lateral Project, receiving the transportation services that will transport natural gas

from the Millennium mainline pipeline to the CPV Valley Energy Center.
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C. Millenniums Filings

On November 9, 2016, the Commission issued to Millennium a Certificate for the

construction of the 7.8-mile pipeline lateral. Millennium Pipeline Company, LLC, 157 FERC

61,096 (2016). On June 2, 2017, Millennium filed an abbreviated application for a limited

amendment of the Certificate to update its recourse rates. The Commission established an

intervention/comment date of August 4, 2017.

On July 21, 2017, Millennium filed with the Commission a Request for Notice to Proceed

with Construction (NTP), asserting that it has all authorizations, or waivers, as appropriate,

necessary to commence construction of the pipeline lateral.

CPV Valley has an interest in this proceeding as the shipper that will receive

transportation service over the 7.8-mile pipeline lateral that is the subject of Millenniums

Certificate and application for amendment. CPV Valleys interest cannot be represented by any

other party. Its intervention is in the public interest and CPV Valley respectfully requests that its

Motion to Intervene be granted.

II.
COMMENTS IN SUPPORT OF MILLENNIUMS REQUEST FOR
NOTICE TO PROCEED

A. Millennium Complies with Certificate Condition 9

CPV Valley supports Millenniums request for issuance of a NTP because the

requirements of Certificate Condition 9 have been satisfied. Millennium seeks to commence

construction of the Valley Lateral Project, a 7.8-mile pipeline lateral to transport gas in interstate

commerce for the state of the art CPV Valley Energy Center. The CPV Valley Energy Center is

a 650 MW natural gas-fired generating station currently under construction in Wawayanda, New

York. The CPV Valley Energy Center is nearly 80% complete. Millennium has not yet

commenced construction of the Valley Lateral Project because the New York State Department
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of Environmental Conservation (NYDEC) has failed to act on Millenniums water quality

certification (WQC) application pursuant to Section 401 of the Clean Water Act, 33 U.S.C.

1341, despite the fact that NYDEC received Millenniums WQC application on November 23,

2015nearly twenty months ago.

Clean Water Act Section 401 states that if a permitting agency fails or refuses to act on a

request for certification within a reasonable period of time (which shall not exceed one year)

after receipt of such request, the certification requirements of this subsection shall be waived

with respect to such Federal application. 33 U.S.C. 1341(a)(1). NYDEC has not acted

within the Clean Water Acts statutory timeframe, and, thus, the WQC requirement has been

waived. Commission precedent is consistent with this result. See, e.g., Georgia Strait Crossing

Pipeline LP, 107 FERC 61,065 (2004), order on clarification and rehg, 108 FERC 61,053

(2004); AES Sparrows Point LNG, LLC, 129 FERC 61,245, at P 63 (2009), vacated on other

grounds, 145 FERC 61,113 (2013).

The failure of NYDEC to act on Millenniums WQC application has caused, and will

continue to cause, significant harm to CPV Valley, wholesale markets, and retail customers.

CPV Valley Energy Center is a state-of-the-art combined cycle generating facility, using

advanced and highly efficient power generation technology designed primarily to burn natural

gas as fuel, but with dual fuel capability to burn oil as a backup fuel source. NYDECs failure to

act is forcing CPV Valley to commission its project on oil, a fuel that is more expensive and less

efficient, than natural gas. CPV Valley will participate in the NYISO markets as a capacity

resource, but because of NYDECs failure to act on Millenniums WQC application, it will not

be able to commit to supply the facilitys full capacity when it generates power on oil, and will

be limited to approximately 720 hours of operation per year on oil. As a result, New York
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ratepayers will not receive the benefits of the lower energy and capacity prices that the Valley

Energy Center would otherwise bring. The Commission has both the authority and the

obligation to grant the NTP so Millennium can construct the Valley Lateral Project and begin

providing natural gas to the CPV Valley Energy Center so that it is not forced to operate on oil.

Millenniums NTP request (at 2) describes its substantial efforts to secure the WQC

despite the Valley Lateral Projects minimal impacts on water quality. Millennium participated

in pre-filing meetings with the NYDEC. Millenniums application contained nearly 1,200 pages

of analysis. Millennium filed supplemental information throughout the process and agreed to

implement NYDECs preferences to use horizontal directional drills or conventional bores for

nine of the twelve stream crossings. Of the remaining three streams, two are expected to be dry

during construction. These commitments alone increased the estimated Valley Lateral Project

costs by 46%. Millennium has clearly demonstrated that the Valley Lateral Project would not

impact water quality.

After NYDEC failed to act on Millenniums WQC application by November 23, 2016,

Millennium commenced a proceeding in the U.S. Court of Appeals for the D.C. Circuit under

Natural Gas Act Section 19(d)(2), 15 U.S.C. 717r(d)(2), to force NYDEC to act. See

Millennium Pipeline Co., L.L.C. v. Seggos, 860 F.3d 696 (D.C. Cir. 2017). NYDEC took the

position in that proceeding, and the court agreed, that the Commission is the agency that in the

first instance should make the determination that the WQC requirement has been waived. Id. at

701.

The WQC is the last remaining federally-required permit to be obtained or waived to

allow Millennium to commence construction of the lateral pipeline. As Millennium describes in

its NTP request, NYDEC received Millenniums WQC application on November 23, 2015, and
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Millennium has: fully complied with every NYDEC information request; agreed to horizontally

directionally drill (HDD) or conventional bore nine of the twelve stream crossings along the

pipelines 7.8-mile route; agreed to incur significant additional costs; and worked openly and

cooperatively with the NYDEC throughout the entire WQC process. But despite these extensive

efforts, NYDEC has failed to act on Millenniums WQC application for more than twenty

months.

The Commission must grant Millenniums request for a NTP and allow Millennium to

begin constructing the Valley Lateral Project. The D.C. Circuit held that the Commission should

determine whether NYDECs ability to act on Millenniums WQC application has been waived.

Millenniums NTP request demonstrates that it has been so waived, and, therefore, the

requirements in Certificate Condition 9 have been satisfied.

B. CPV Valley Continues to Suffer Material Harm from NYDECs Inaction and
Supports a Commission Finding of Waiver

CPV Valley requests that the Commission grant NTP for the following reasons.

First, Millennium has met all of the legal requirements to support a finding of waiver

under both the plain language of the Clean Water Act and clear, long-standing Commission

precedent. See Request for NTP at 5. Thus, the Commission should find waiver and issue the

NTP.

Second, time is of the essence. The CPV Valley Energy Center is nearly 80% complete

and will soon begin testing in anticipation of an early 2018 commercial operation date. Although

CPV Valley can test and generate electricity using fuel oil within its air permit limits, and

intends to do so until the Valley Lateral Project is constructed and placed in service, the CPV

Valley Energy Center is designed to primarily run on cleaner-burning natural gas, with fuel oil

only as back-up fuel. Generating electricity using oil versus natural gas is much less efficient
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and at least two times more expensive. CPV Valley estimates that its additional costs associated

with the delay in receipt of the WQC, or waiver thereof, are approximately $4.2 million per

month and that for each month that CPV Valley is not able to generate electricity using natural

gas it will also lose approximately $6.1 million in revenues. See Affidavit of Daniel R. Nugent,

attached hereto as Exhibit A, 10-11.

Third, Millennium has clearly shown that there will be no harm to water quality or related

matters within the jurisdiction of the NYDEC under the Clean Water Act resulting from its

construction of the Valley Lateral Project. Millennium has agreed to abide by its specific

commitments to NYDEC related to protecting water quality and mitigation. To make these

binding, Millennium has even agreed to have those conditions incorporated into the NTP.

Fourth, Millennium has proceeded in a timely and reasonable manner. Millenniums

filings with the Commission and NYDEC in November 2015 supported a schedule that would

have had the Certificate and Clean Water Act Section 401 WQC issued and the Valley Lateral

Project constructed in time for gas systems commissioning in April 2017 and first fire of the

CPV Valley Energy Center in October 2017. Millenniums construction schedule reasonably

anticipated starting construction of the Valley Lateral Project in November 2016, one year after

NYDECs receipt of the Section 401 WQC application. This November 2016 start date was

critical based upon the fact that tree cutting along the Valley Lateral Project right of way is

prohibited during the months of April through mid-November to protect bat habitats. The tree

clearing window will open again in November 2017 and Millennium needs authority to mobilize

and be prepared to clear the necessary trees during the tree clearing window.

Fifth, in addition to harming Millennium and CPV Valley, NYDECs delay is harming

the wholesale and retail customers that are counting on the availability of the clean-burning and
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low-cost CPV Valley Energy Center. The CPV Valley Energy Center is located in Orange

County, New York. Over the last several years, Orange County has been one of New Yorks

fastest growing counties.2 In particular, Orange County has had significant growth in the health

industry with the construction of new medical facilities throughout the region, which are large

consumers of electricity and require a reliable supply of energy. The newly-built Orange County

Hospital in Middletown is already contemplating expansion. Regional job growth has benefited

from these high-paying skilled employment opportunities and Orange County continues to

experience positive economic growth.

Orange County and the lower Hudson Valley region of New York also are attracting

other large businesses, such as a potential childrens theme park, LegoLand, in the town of

Goshen and a casino resort in Sullivan County. Such businesses rely on access to low-cost,

reliable energy. The CPV Valley Energy Center is located within the region and the electricity it

generates will not only provide employment opportunities to the area, but also will help support

the electrical system with low-cost, reliable, and efficient generation. These new businesses and

the jobs they create need the CPV Valley Energy Center to be connected to the Millennium gas

pipeline so that additional, low-cost power is available in this growing region.

Sixth, NYISO studied the CPV Valley Energy Center as a natural gas-fired generating

station and is relying on it to come on line as intended. Specifically, NYISO has incorporated

the CPV Valley Energy Center into its planning documents, including its Reliability Needs

Assessment. The CPV Valley Energy Center is located in the new Lower Hudson Valley

(LHV) capacity zone. One effect of establishing the new capacity zone was to incentivize

2
See Sucato, Sabrina, Rockland and Orange are Two Fastest-Growing Counties in New
York, Census Reports, Hudson Valley Magazine, April 1, 2015.
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construction of new generation within the zone to alleviate transmission congestion and address

reliability concerns within the lower Hudson Valley region. Entry of a new generatorlike the

CPV Valley Energy Centerwill reduce capacity prices in the LHV zone. Similarly, adding

new low-cost generationlike the CPV Valley Energy Centerdrives down the price of

electricity in the New York wholesale market. In addition, the CPV Valley Energy Center is a

state-of-the-art, efficient generating facility with the latest emission control technology. Once it

begins to run on natural gas, the CPV Valley Energy Center will displace older, less efficient

generating resources, reducing overall emissions in the region.

The benefits to the LHV capacity zone resulting from the CPV Valley Energy Center

entering the market as a capacity resource will be reduced if the Valley Lateral Project is

delayed. Forcing the CPV Valley Energy Center to run on oil (which, as stated, it can only do

for a limited period of time) will result in the plant being able to provide approximately 90 MW

less capacity to the LHV zone. In contrast, operating on natural gas as planned would allow

ratepayers to receive the benefits of lower cost and cleaner energy, and increased generation to

meet energy demands within the state. These ratepayers will not recoup any of the savings they

would have received but for the delay.

In sum, the Commission should find that the NYDECs WQC requirement is waived and

grant the NTP.

WHEREFORE, CPV Valley respectfully requests that the Commission grant its Motion

to Intervene, grant the NTP, and permit Millennium to construct the Valley Lateral Project.
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Respectfully submitted,

/s/Elizabeth W. Whittle
Elizabeth W. Whittle
Counsel to
CPV Valley, LLC
Of Counsel:

Nixon Peabody, LLP


799 Ninth Street, N.W.
Suite 500
Washington, DC 20001
202-585-8338
202-585-8080
ewhittle@nixonpeabody.com

Dated: August 4, 2017


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CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing Motion to Intervene and

Comments via e-mail on each person listed on the Commissions official service list.

Dated in Washington, DC this 4th day of August, 2017.

/s/Elizabeth Whittle___
Elizabeth W. Whittle
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Exhibit A
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Document Content(s)

MTI Millennium NTP CP16-17-002.PDF....................................1-16