nys psc blesses environmental compatibility and public need for pa-ny bluestone pipeline
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To ground a blog post here:http://nyshalegasnow.blogspot.com/2012/10/bluestone-pipeline-green-lighted-local.htmlTRANSCRIPT
STATE OF NEW YORK PUBLIC SERVICE COMMISSION
At a session of the Public Service Commission held in the City of Albany on September 21, 2012 COMMISSIONER PRESENT: Garry A. Brown, Chairman
CASE 11-T-0401 - Application of Bluestone Gas Corporation of New
York, Inc. for a Certificate of Environmental Compatibility and Public Need Pursuant to PSL Article VII for the Construction and Operation of a 20" Natural Gas Gathering System and Dehydration and Compression Facilities, in the Town of Sanford, Broome County, and Request for Approval of Environmental Management and Construction Standards and Practices.
CASE 12-G-0214 – Petition of Bluestone Gas Corporation of New
York for an Order Granting Certificate of Public Convenience and Necessity and Establishing a Lightened Regulatory Regime.
ORDER ADOPTING THE TERMS OF A JOINT PROPOSAL AND GRANTING
CERTIFICATE OF ENVIRONMENTAL COMPATIBILITY AND PUBLIC NEED AND CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY
(Issued and Effective September 21, 2012)
INTRODUCTION
This order hereby grants to Bluestone Gas Corporation
of New York (Bluestone), as conditioned by the terms and
conditions of a Joint Proposal and this order, a Certificate of
Environmental Compatibility and Public Need to construct a
natural gas gathering facility and a Certificate of Public
Convenience and Necessity to allow Bluestone to exercise road
use and crossing rights granted to it pursuant to the road use
agreement with the Town of Sanford. Bluestone’s request for
lightened regulation will be addressed separately.
CASES 11-T-0401 and 12-G-0214
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The parties have adequately addressed issues
identified in opposition to Bluestone’s application and
petition. Furthermore, Bluestone’s application and petition, as
conditioned by the Joint Proposal’s terms and conditions,
satisfies the required statutory findings.
PROCEDURAL BACKGROUND
On July 27, 2011, Bluestone filed an application
pursuant to Public Service Law (PSL) Article VII, §121-a(3) (the
Article VII application), seeking a Certificate of Environmental
Compatibility and Public Need (Certificate). Bluestone proposes
to construct an approximately 9.5 mile natural gas gathering
facility located entirely within the Town of Sanford, New York
(Facility).1
On May 23, 2011, prior to the filing of Bluestone’s
Article VII application, the Commission instituted a separate
proceeding, an investigation regarding the premature clearing of
portions of Bluestone’s proposed right-of-way (ROW) for this
Facility.
In its Article VII application, Bluestone states
that its Facility will aggregate and dehydrate natural gas
produced from wells currently under development in Susquehanna
County, Pennsylvania and deliver that natural gas to the
interstate Millennium Pipeline located in Broome County, New
York.
2
1 As discussed below, the project has been modified so that the
Facility is approximately 9.2 miles.
More specifically, Department of Public Service staff
began investigating significant tree clearing that had occurred,
apparently in preparation for the construction of Bluestone’s
2 Case 11-G-0221, Proceeding on Motion of the Commission to Investigate the Acts and Practices Involving the Staking and Clearing of the Site of a Major Utility Transmission Facility in the Town of Sanford, Broome County Before the Obtaining of a Certificate of Environmental Compatibility and Public Need, Order Instituting Proceeding (issued May 23, 2011).
CASES 11-T-0401 and 12-G-0214
3
utility gas transmission facility without Bluestone’s having
obtained the required Certificate.
Regarding Bluestone’s Article VII application, on
August 10, 2011, the Secretary issued a deficiency letter
requesting additional information to aid the Commission review
of the Facility and directing Bluestone to serve notice of its
Article VII application by regular mail upon all owners of
property, as shown on the latest real property tax assessment
records for the affected municipalities, within 150 feet of the
edge of the proposed Facility’s ROW.
On August 18, 2011, the Commission issued an Order
Requiring Hearing extending the 60-day timeframe for rendering a
decision under PSL §121-a(7).3 As noted in that Order, the
Commission’s primary purpose in requiring a hearing was to
determine whether certain staking and tree clearing activities
that occurred would affect the determinations that the
Commission must make in this Article VII proceeding.4
Bluestone responded to the deficiency letter on
September 6, 2011. On September 21, 2011 the Secretary issued a
letter to Bluestone stating that its application was in
compliance with PSL §121-a(3) and the Commission’s application
filing regulations. However, the case was held in abeyance
while the investigation case regarding tree clearing proceeded.
The Commission resolved the investigation case by an
order dated April 19, 2012, adopting the terms of an Offer of
Settlement from Bluestone. The order requires Bluestone to
provide $400,000 for a public benefit fund to benefit the public
in the Town of Sanford or Broome County in satisfaction of all
issues raised in the investigation.
3 Case 11-T-0401, Bluestone Order Requiring Hearing (issued
August 18, 2011) (Order Requiring Hearing). 4 Id. at 2.
CASES 11-T-0401 and 12-G-0214
4
Following resolution of the investigation proceeding,
the parties in this Article VII proceeding agreed to pursue
settlement negotiations with the intent of resolving all
outstanding issues. Consequently, on May 4, 2012, Bluestone
filed a Notice of Impending Settlement Negotiations pursuant to
16 NYCRR §3.9, and the parties commenced negotiations.
In addition to Bluestone and Department of Public
Service trial staff (Staff), five parties have intervened in the
Article VII proceeding: the New York State Department of
Environmental Conservation (DEC), the New York State Department
of Agriculture & Markets (Ag & Mkts), DMP New York, Inc. and
Laser Northeast Gathering Company, LLC (collectively, Laser),
the Delaware Highlands Conservancy (DHC), and Ms. Elisabetta
Iaboni.5
On May 10, 2012, Bluestone filed a related petition
for an order granting a Certificate of Public Convenience and
Necessity (CPCN) under PSL §68 to allow Bluestone to exercise
road use and crossing rights pursuant to a road use agreement
between Bluestone and the Town of Sanford (§68 Petition), a
necessary separate approval. In the same petition, Bluestone
requested an order granting lightened regulation.
On June 8, 2012, Bluestone proposed to address the
road crossing component of its Petition case together with the
Article VII proceeding. Therefore, on June 8, 2012, Bluestone
filed a second Notice of Impending Settlement Negotiations
pursuant to 16 NYCRR §3.9, for the Article VII case and the
related Petition case.
On June 26, 2012, Bluestone filed a revised PSL §68
Petition that eliminates the proposal to install compression
5 DHC and Ms. Iaboni were granted party status by a ruling
issued July 11, 2012, and consequently did not participate in negotiations until after that date.
CASES 11-T-0401 and 12-G-0214
5
units or dehydration equipment at the proposed Sanford Station.
The parties held several settlement meetings from May through
early August 2012.
THE JOINT PROPOSAL
On August 9, 2012, Bluestone filed a Joint Proposal
(dated August 8, 2012), that purports to resolve all issues
regarding the Article VII application and the licensing aspect
of the §68 Petition (the Joint Proposal). The signatory parties
to the Joint Proposal are Bluestone, Staff, DEC, Ag & Mkts, and
DHC (collectively, the Signatory Parties). The Joint Proposal
includes proposed terms and conditions for the Article VII
Certificate, the §68 CPCN, and a proposed water quality
certification. The Signatory Parties contend that approval of
the Facility, as conditioned by the terms and conditions of the
Joint Proposal, satisfies the required statutory findings,
minimizes potential adverse environmental impacts, protects
water quality and environmental resources, and ensures public
safety.
Regarding the two remaining parties in this
proceeding, Laser participated in the settlement discussions,
and Ms. Iaboni participated in the later-stage settlement
discussions, but they did not sign the Joint Proposal. Ms.
Iaboni has filed a statement in opposition to the Joint
Proposal.
The Joint Proposal provides substantial changes to the
Project. For example, Bluestone has withdrawn its request for
approval of compression and dehydration equipment at the
interconnection point with Millennium Pipeline. The
reconfigured facility is approximately 0.03 miles shorter than
originally proposed due to elimination of the compression and
dehydration equipment. The Facility is an approximately 9.2
mile natural gas gathering line and metering station located
CASES 11-T-0401 and 12-G-0214
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entirely in the Town of Sanford, Broome County, New York.
Bluestone has agreed to seek future Commission approval in the
event compression facilities are needed.
With the filing of the Joint Proposal, the Signatory
Parties have requested that the Commission waive the hearing
requirement in these proceedings.6
Description of the Project
No party has opposed this
request. The Signatory Parties’ request is hereby granted.
The Facility consists of two components: a) the
Sanford Station, a tie-in site to the existing Millennium
Pipeline in the Town of Sanford, Broome County, New York where
approximately 0.2 miles of station piping, gas monitoring
equipment and an interconnection with Millennium Pipeline will
be installed, and b) approximately 9.04 miles of 20” steel
pipeline in Broome County, New York from the Sanford Station to
a point on the New York–Pennsylvania border where the pipeline
will cross into Susquehanna County, Pennsylvania. The maximum
allowable operating pressure of the system will be 1440 psig.7
The overall facility, including infrastructure in New
York and Pennsylvania (Overall Facility), will provide an outlet
for the production of natural gas from a minimum of 30,000 acres
being developed by affiliates of Southwestern Energy in
Susquehanna County, Pennsylvania. The Overall Facility will be
capable of delivering natural gas from these wells to two
interstate pipelines: the Millennium Pipeline, which will be
interconnected to the Facility in New York, and the Tennessee
Gas Pipeline, which will be interconnected to the Overall
Facility in Pennsylvania. Though compression will not be
6 As noted below, Ms. Iaboni was provided with an opportunity
to request an evidentiary hearing, but declined to do so. 7 A measurement of pressure, above atmospheric pressure,
expressed as pound-force per square inch, measured by a gauge.
CASES 11-T-0401 and 12-G-0214
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required initially at the Sanford Station, Bluestone anticipates
that, in the future, it may need compression to meet the needs
of growth in regional production.
The Sanford Station will be located on a heavily
wooded 108.2 acre site in the Town of Sanford, Broome County,
New York. The facilities at the Sanford Station site will
provide the monitoring and measurement of the volume and quality
of the gas delivered into the Millennium Pipeline and will
provide overpressure protection and flow control.8
Environmental Management & Construction Standards & Practices
As part of the Article VII Application, Bluestone
submitted a project-specific set of Environmental Management &
Construction Standards & Practices (EM&CS&P). However,
Bluestone has withdrawn its request for approval of this
project-specific EM&CS&P. Instead, Bluestone has certified that
it will construct, operate and maintain all Facility fuel gas
transmission lines in accordance with the Department of Public
Service’s Revised EM&CS&P,9
except to the extent specific
measures and techniques are indicated in the terms and
conditions of Joint Proposal, Appendix C.
8 The Sanford Station will contain the following facilities:
pig receiver trap, filter separator, pressurized wastewater tank (for any liquids that might accumulate in the filter separator), meter skid and canopy, regulator skid and building, gas quality building, flare, emergency generator, and interconnecting piping and controls.
9 Case 06-T-1383, Notice of Intent Filed by Fortuna Energy Inc. to Construct a Natural Gas Gathering Pipeline, Approximately 7,225 feet of 4" Steel Coated Pipeline, Located in the Town of Bradford in Steuben County, Order Granting Certificate of Environmental Compatibility and Public Need and Approving Environmental Management and Construction Standards and Practices (issued December 7, 2006).
CASES 11-T-0401 and 12-G-0214
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THE PARTIES’ STATEMENTS IN SUPPORT AND OPPOSITION
The Signatory Parties state that the Joint Proposal
represents a compromise package of concessions and agreements
that address and reasonably resolve all of the principal issues
of concern among the Signatory Parties, as well as a number of
ancillary issues. The Joint Proposal includes a comprehensive
set of proposed Certificate Conditions, the Signatory Parties
assert, that require Bluestone to work in close cooperation with
Staff and DEC (as well as Ag & Mkts) on a wide range of issues
pertaining to construction and operation of the Facility. These
issues include: stream and wetlands crossings, invasive species
control, timber clearing, soil erosion, construction on steep
slopes, protection of existing utilities, hydrostatic testing,
blasting, ROW restoration, and ongoing operation and maintenance
procedures.
Staff supports adoption of the comprehensive terms and
conditions of the Joint Proposal because it represents a
reasonable compromise of the parties’ diverse interests and is
in the public interest. Staff states that the Facility is
needed to provide New York markets with access to a nearby
supply source of natural gas, because both the Millennium and
Tennessee pipelines serve New York markets. The Facility may
also introduce increased competition in the local natural gas
commodity market, Staff asserts, because local production will
displace higher cost supply from traditional supply regions
located out of state. In conclusion of its support for the
Joint Proposal, Staff states that the Joint Proposal’s terms and
conditions would authorize the construction and operation of the
Bluestone Facility subject to specific conditions and safeguards
that will protect the natural environment and the people of the
State.
CASES 11-T-0401 and 12-G-0214
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Ag & Mkts supports the terms and conditions of the
Joint Proposal, noting that its terms and conditions regarding
routing, construction, and mitigation techniques will result in
the protection, to the extent practicable, of the resources
impacted. Ag & Mkts concludes that the Facility, as conditioned
by the Joint Proposal’s terms and conditions, represents the
minimum adverse impact on agricultural lands, considering the
state of available technology and other pertinent
considerations.
In supporting the Joint Proposal’s terms and
conditions, DEC states that its concerns regarding invasive
species, stormwater management, wetlands impacts, and other
potential adverse environmental impacts have been satisfactorily
addressed by the Joint Proposal’s terms and conditions. DEC was
particularly involved in the development of the Stormwater
Pollution Prevention Plan, the Stream and Wetlands Crossing
Tables, and the Invasive Species Management Plan.
Ms. Iaboni filed a statement in opposition to the
Joint Proposal. Ms Iaboni opposes the Joint Proposal on four
grounds: (1) Bluestone must provide financial assurances that it
has the financial capabilities to construct, own, and operate
the Facility; (2) the terms and the conditions of the Joint
Proposal misstate the requirements of the Eminent Domain
Procedures Law (EDPL), (3) there is a lack of need for Bluestone
to use Ms. Iaboni's property, and (4) the Commission’s
authorization of this Facility will have a negative effect upon
the ability of landowners in or adjacent to the ROW to obtain
the value of mineral deposits on their property. In addition,
Ms. Iaboni notes that Bluestone, in its initial application,
Exhibit G, misstated that Ms. Iaboni was “finalizing agreement”
with Bluestone regarding the proposed ROW on her property. Ms.
Iaboni argues that although this misstatement was brought to
CASES 11-T-0401 and 12-G-0214
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Bluestone’s attention, Bluestone continues to leave this
misstatement in place in the revised Exhibit G.
Earlier in the proceedings, Ms. Iaboni was provided
with an opportunity to request an evidentiary hearing, at which
she could have presented evidence that the Facility was not
needed or not in the public interest. But, through her counsel,
Ms. Iaboni declined to request an evidentiary hearing.10
In their reply statements in support, Bluestone and
Staff have responded to Ms. Iaboni’s opposition to the Facility.
Ms. Iaboni’s opposition and the replies of Bluestone and Staff
are discussed further, below.
11
PUBLIC COMMENTS
Several public comments have been received in support
of and in opposition to Bluestone’s proposed facility. Those
commenters in support of the Facility (19 commenters) represent
a broad range of interests, including local landowner
coalitions, government representatives at the state, county and
local level, labor groups, and natural gas industry
representatives. These commenters cite factors including
employment opportunities during Facility construction and
secondary effects including population growth for the community,
increasing school enrollment, and increasing the local tax base.
Those commenters in opposition to the Facility (23
commenters) include local residents and landowners. These
commenters cite concerns about potential adverse health effects,
environmental impacts, compliance with Federal Energy Regulatory
10 See, Cases 11-T-0401 and 12-G-0214, Bluestone Gas Corporation
of New York, Inc., Ruling on Schedule (issued August 15, 2012).
11 Laser, the only other party in these proceedings that is not a signatory to the Joint Proposal, did not file any statement.
CASES 11-T-0401 and 12-G-0214
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Commission (FERC) oversight, encroachment upon landowners’
property rights, and loss of property value.
On August 31, 2012, the Delaware Riverkeeper Network
(DRN) submitted a filing to the Commission in opposition to the
comprehensive Joint Proposal filed in these proceedings. DRN is
not a party to this proceeding, and consequently, the Judge has
treated the DRN filing as a public comment in opposition to this
proceeding. The DRN comments identify five points of opposition
to the Joint Proposal. According to the DRN, before the
Commission approves the Joint Proposal: (1) Bluestone should be
required to seek a formal FERC order exempting Bluestone from
FERC jurisdiction; (2) the Commission should impose a
certificate condition limiting Bluestone’s water body crossing
construction techniques; (3) Bluestone should consult with the
Delaware River Basin Commission (DRBC); (4) no decision on the
Joint Proposal should be made before the state makes a final
decision on whether to allow high-volume hydraulic fracturing in
New York State; and (5) a cumulative environmental impact study
should be conducted.
On September 4, 2012, the Judge provided the parties
with an opportunity to reply to DRN’s comments. DHC and
Bluestone were the only parties to submit a reply to DRN’s
comments. The DRN comments and the replies of DHC and Bluestone
are addressed in the discussion, below.
DISCUSSION, FINDINGS, AND CONCLUSION
Certification Standards
In rendering a decision on an application pursuant to
Article VII, the Commission may not grant a certificate for the
construction or operation of a major utility transmission
facility unless the Commission finds and determines:
the basis of the need for the facility;
the nature of the probable environmental impact;
CASES 11-T-0401 and 12-G-0214
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that the location of the line will not impose an undue
hazard to persons or property along the area traversed by the
line;
that the location of the facility as proposed conforms
to the applicable state and local laws and regulations issued
thereunder;12
that the facility will serve the public interest,
convenience, and necessity.
and,
13
The concept of “environmental compatibility and public
need” requires that the Commission “protect environmental
values, and take into account the total cost to society of such
facilities” when making a decision on whether the Commission
should grant an Article VII certificate.
14
In rendering a decision on an application pursuant to
PSL §68 for approval of the exercise of a franchise, the
Commission may not grant a CPCN unless the Commission finds and
determines:
In rendering this
decision, the Commission cannot look at any single aspect of an
application in a vacuum; rather the Commission must consider the
totality of all of the relevant factors.
12 All of which are binding upon the Commission, except that the
Commission may refuse to apply any local ordinance, law, resolution or other action or any regulation issued there under or any local standard or requirement which would be otherwise applicable if the Commission finds that, as applied to the proposed facility, such is unreasonably restrictive in view of the existing technology, or of factors of cost or economics, or of the needs of consumers whether located inside or outside of such municipality. PSL §126(1)(f).
13 PSL 121-a(7), making applicable to a major transmission facility which extends less than 10 miles (except as described in PSL 121-a(2)) the findings of PSL 126(1)(a), (b), (e), (f), and (g).
14 See Chapter 272 of the Laws of 1970, §1, Legislative Findings.
CASES 11-T-0401 and 12-G-0214
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the applicant has filed a duly certified copy of the
charter of its incorporation;
the applicant has filed a verified statement of the
president and secretary of the corporation, showing that it has
received the required consent of the proper municipal
authorities; and
that such exercise of the right, privilege, or
franchise is necessary or convenient for the public service.
FERC Jurisdiction
DRN asserts that Bluestone is required to first obtain
a FERC declaratory ruling disclaiming federal jurisdiction
before this Commission can consider Bluestone’s application
under Article VII or the related Petition. Bluestone responds
that DRN has cited no law or regulation providing such a
requirement. Furthermore, the record in this proceeding shows
that Bluestone discussed the issue of federal jurisdiction with
FERC staff, who agreed with Bluestone’s assessment that the
proposed Facility is a gathering line not subject to FERC
jurisdiction.15 This jurisdictional assessment relies, in part,
upon a FERC Order issued March 5, 2010, to Laser Marcellus
Gathering Company, LLC, in which FERC concluded that, because
the proposed Laser gathering system will perform a gathering
function, it is therefore exempt from FERC jurisdiction.16
15 See Case 11-T-0401 – Bluestone Response to August 10, 2011
Request for Additional Information from Staff, at Response D (filed September 7, 2011) (providing a summary of Bluestone’s consultation with FERC staff). This response was incorporated into the record as part of Joint Proposal, Appendix A.
FERC
staff agreed with Bluestone’s assessment that its Facility is
analogous to the Laser gathering facility. Based upon these
16 Laser Marcellus Gathering Company, LLC, FERC Docket No. CP10-35-000, 130 FERC ¶16,162; 2010 FERC LEXIS 410 (2010).
CASES 11-T-0401 and 12-G-0214
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facts in the record, Bluestone’s Facility is exempt from FERC
jurisdiction as it will perform a gathering function.
The Overall Pennsylvania and New York Facility
The Joint Proposal’s terms and conditions provide that
before commencing construction of the Facility, Bluestone must
file with the Commission the requisite approvals to construct
the Pennsylvania portion of the facility. The Pennsylvania
facility currently consists of a pipeline that will extend south
from the New York-Pennsylvania border to a receipt point near
New Milford, Pennsylvania. In the future, Bluestone plans to
construct additional gathering infrastructure to connect its
interstate facility to the Tennessee Pipeline at an
interconnection point in Pennsylvania. Requiring Bluestone to
demonstrate approval to construct both a receipt point and
delivery point ensures that the Facility can be placed in
service once constructed.
* * *
Pursuant to PSL §§68 and 121-a(7), referencing 126(1),
the following constitutes the Commission’s specific findings and
determinations with respect to the Article VII certificate and
the CPCN.
The Basis of the Need for the Facility
Bluestone has entered into binding, long-term
agreements with Southwestern Energy Service, an affiliate of
Southwestern Energy, to provide gathering and dehydration
services for its production currently under development in
Susquehanna County, Pennsylvania. Southwestern Energy Service
has committed to Bluestone a minimum of 875 BCF17
17 Billion Cubic Feet; one BCF is approximately equal to one
trillion BTUs. (British Thermal Units).
from
approximately 30,000 acres in Susquehanna County. This
CASES 11-T-0401 and 12-G-0214
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commitment shows the magnitude of the potential benefit of the
Facility to New York markets and other northeastern US markets.
The Overall Facility includes an interconnection to the
Millennium Pipeline in New York and an interconnection to the
Tennessee Pipeline in Pennsylvania. As a result, the Overall
Facility will provide New York markets with access to a nearby
supply of gas, because both the Millennium and Tennessee
Pipelines serve New York markets.
An increase of regional natural gas supply has the
potential to mitigate volatility in the price of natural gas,
provide a greater level of security of supply than New York has
been able to achieve previously, in the event of potential
disruptions in other traditional supply regions, as has occurred
during hurricane events in the Gulf Coast basins. An increase
of regional natural gas supply also will reduce the need for
costly interstate pipeline capacity. Although the Facility will
not directly serve any retail customers, markets that can be
accessed via the Millennium Pipeline and pipelines that connect
to it include the service territories of National Grid, Orange
and Rockland Utilities, Inc., Corning Natural Gas Corporation,
Central Hudson Gas and Electric Corporation, and New York State
Electric and Gas Corporation, as well as electric generators
that purchase gas directly from producers and marketers. All of
these benefits accrue from the development of infrastructure
such as the proposed Facility.
Due to the high potential for a large amount of
economically recoverable reserves from the Susquehanna County
region, Bluestone anticipates a significant number of wells
connecting to the Overall Facility in the next few years.
Access to natural gas supply from the Susquehanna County region
via the Facility is likely to immediately introduce increased
competition in the New York natural gas commodity market because
CASES 11-T-0401 and 12-G-0214
16
such regional production will displace higher cost supply from
more distant traditional supply regions.
Other public benefits of the Facility include long-
term economic benefits to the Town of Sanford. The Town of
Sanford will collect substantial annual property taxes on the
Facility. Bluestone estimates that between 250 and 300
temporary construction-related jobs will be created during the
construction phase of Facility, and that once the Facility is
operational, several permanent jobs will be created.
Additionally, Bluestone states, third-party services required to
support the ongoing Facility operations will also provide
economic benefits to the area.
In its comments, DRN contends that no decision on the
Joint Proposal should be made before New York makes a final
decision on whether to allow high-volume hydraulic fracturing in
New York State. However, this Facility is not premised upon
authority for high-volume hydraulic fracturing in New York.
Instead, Bluestone proposes this Facility based upon its
contract with Southwestern Energy Production Company, a producer
of the wells in Pennsylvania that will connect to the Facility.
In sum, the need for this Facility is not dependent
upon any additional New York production.18 As the Commission has
recently stated in another similar proceeding, although
currently a moratorium is in effect on use of high-volume
hydraulic fracturing in New York State for drilling horizontal
wells, no such moratorium exists for the review of pipeline
siting applications.19
18 Joint Proposal, Paragraphs 13 through 15.
Therefore, DRN’s contention that the
Commission’s decision in these proceedings should await a final
19 Case 10-T-0350, Application of DMP New York, Inc. and Laser Northeast Gathering Company, LLC, Order Granting Certificate of Environmental Compatibility and Public Need (issued February 22, 2011) at 59 (Laser Order).
CASES 11-T-0401 and 12-G-0214
17
decision on whether to allow high-volume hydraulic fracturing in
New York State must be rejected.
The Nature of the Probable Environmental Impacts
1. Land Use
Impacts to land use on lands adjacent to the proposed
Facility are anticipated to be minimal and temporary in nature.
The operation of the Facility will not significantly impact the
current agricultural, rural residential, or commercial land use
in the area. Land uses along the proposed pipeline corridor
include undeveloped forested land or woodlands, active
agriculture, open land, land subject to a conservation easement,
pasture land, public road rights-of-way, abandoned agricultural
land, and rock pits and rock quarries. The majority of the
route is undeveloped, characterized with mixed forests,
deciduous forest, evergreens forest, and scrub or shrub forested
vegetation.20
No public lands lie adjacent to the proposed route.
Private recreational land use exists along the proposed pipeline
just south of Laurel Lake Road on a large tract of parkland used
for the Boy Scouts’ Tuscarora Scout Reservation operated by the
Baden Powell Council. The entire proposed pipeline is within
the agricultural zoning district in the Town of Sanford, with
the exception of the Boy Scout camp parcel between milepost (MP)
6.8 and MP 8,
21
20 See generally, Application §2.5.1.
which is zoned as special zoning district.
Bluestone’s ROW agreement with the Boy Scouts includes a “No
Build” window from June 15 to August 31. However, the Boy
Scouts have indicated a willingness to consider accommodating
Bluestone’s construction schedule outside this window, subject
to certain limitations and conditions.
21 Milepost 0.0 is the northernmost portion of the Facility and MP 9.0 is at the Pennsylvania border.
CASES 11-T-0401 and 12-G-0214
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The pipeline crosses New York State certified
Agricultural Districts in Broome County between MP 0.9 and 2.7,
between MP 3.6 and 3.8, and also within portions of the above-
ground Facility site. No long-term impacts on farming,
agricultural activities, or the designated Agricultural District
are anticipated as a result of this project. There will be no
permanent impact to agricultural land use.
Due to the rural nature of the area, private
residences in proximity to the route are scattered and
infrequent. Only nine residences are located within 500 feet of
the proposed ROW.
2. Topography, Geology, and Soils
Construction and operation of Facility will not have a
significant adverse impact upon topography, geology or soils.22
The proposed Facility is located within one Major Land Resource
Area (MLRA) recognized by the United States Department of
Agriculture, Natural Resources Conservation Service (NRCS): the
Glaciated Allegheny Plateau and Catskill Mountains.23
Approximately 2% of the total pipeline route crosses
hydric soils. Hydric soils may indicate the presence of
wetlands or agricultural drain tiles. Approximately 68% of the
route crosses soils that are classified as farmland of statewide
importance. Farmlands of statewide importance include lands
other than prime farmland, which have a good combination of
physical and chemical characteristics for the production of
crops.
22 See Article VII Application, §2.5.1. 23 MLRAs are geographically associated land resource units,
usually encompassing several thousand acres, characterized by a particular pattern of soils, geology, climate, water resources, and land use. This MLRA is designated as MLRA 140 by the NRCS.
CASES 11-T-0401 and 12-G-0214
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Topography in the Facility area ranges from rolling
hills to steep slopes. Slopes range from 0 to 80%, although
approximately 95% of the proposed route traverses slopes that
are 25% or less.
3. Vegetative Communities
There are no Old Growth Forest or Sugar Bush areas in
the vicinity of the proposed Facility. Additionally, there are
no trees listed in the Registry of Big Trees in New York State
in the vicinity of the proposed Facility route.
4. Fish and Wildlife Resources and Invasive Species
a. Migratory Birds
The Facility route has been evaluated for migratory
bird habitat and flyways, and the project area is within the
Atlantic Flyway. However, it is not within one of the major fly
routes.
b. Rare, Threatened and Endangered Species
No known habitats of federal or State-listed
threatened or endangered plant and animal species have been
identified for the Facility.
c. Invasive Species
Invasive species are non-native species that can cause
harm to the environment or to human health. In some areas along
the route, invasive species are prevalent. During field
surveys, the following plant invasive species were identified:
Black locust (Robinia pseudoacacia), multiflora rose (Rosa
multiflora), Japanese knotweed (Fallopia japonica), and reed
canary grass (Phalaris arundinacea). The terms and conditions
of the Joint Proposal include an Invasive Species Management
Plan.24
24 Joint Proposal, Appendix C, Attachment 5.
Bluestone’s compliance with the Invasive Species
Management Plan will minimize the introduction and spread of
invasive species within the Facility project area.
CASES 11-T-0401 and 12-G-0214
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5. Hydrology – Wetlands and Streams
a. Waterbodies
The proposed Facility route includes a total of 34
waterbody crossings. A number of the streams and rivers crossed
provide habitat for a range of aquatic species including
freshwater mussels, invertebrates, fish, and other freshwater
aquatic biota. The Facility was developed to minimize the
environmental impacts associated with stream and river
crossings, and the Joint Proposal’s terms and conditions provide
waterbody crossing methods.25
As noted in the Joint Proposal, waterbody crossing
methods will be in compliance with the Commission-approved
EM&CS&P and the Crossing Methods set forth in Proposed
Certificate Conditions.
Use of best management practices
identified in the EM&CS&P will result in only temporary impacts
to the waterbodies. Furthermore, the Joint Proposal’s terms and
conditions provide that once the crossing has taken place, the
area will be graded and seeded, if necessary, to restore the
stream and its banks to their former condition.
26 Most waterbodies will be crossed via
the open cut method, utilizing either a dry crossing, flume, or
dam and pump method. The Joint Proposal’s terms and conditions
provide that the “method chosen will depend on whether each
stream is dry or wet at the time of crossing, and on the amount
of flow at the time of crossing.27
Proposed Certificate Condition 1(h1) provides that
“during open cut crossings the dam and pump method shall be used
to prevent sedimentation and interruption of stream flow during
construction.”
28
25 See the EM&CS&P and Joint Proposal, Appendix C, Attachment 4.
This certificate condition was developed in
26 Joint Proposal, Appendix C, Attachment 4. 27 Joint Proposal at 16-17. 28 Id. at Appendix C, p. 8.
CASES 11-T-0401 and 12-G-0214
21
consultation with Staff and DEC, and it provides limitations on
the amount of downstream turbidity from construction activity.
DRN contends that the Joint Proposal should not be
approved absent a condition that expressly prohibits use of the
“wet cut” waterbody crossing method. The terms and conditions
of the Joint Proposal, including Condition 1(h1), provide that
Bluestone will utilize only “dry crossing methods,” as DRN
advocates in its comments. Consequently, DRN’s request for a
condition expressly prohibiting the use of “wet cut” waterbody
crossing method is unnecessary because the Joint Proposal’s
terms and conditions already preclude use of wet cut methods.
b. Waterbody Classifications
It is the policy of New York State to preserve and
protect lakes, rivers, streams, and ponds. All waters of the
State are provided a class and standard designation based on
existing or expected best usage of each water or waterway
segment.29
The Joint Proposal’s terms and conditions provide that
cold water in-stream construction activity must be completed
between May 15 and September 30. Stream crossings will be
conducted pursuant to the United States Army Corps of Engineers
(USACE) Nationwide 12 permit
30 and the Water Quality
Certification.31
The four streams that the Facility (or related access
roads) will cross are protected waterbodies. These four streams
Stream crossings conducted outside of these
windows will utilize bored crossings to minimize impacts to
aquatic resources.
29 See Title 5 Article 15 of the Environmental Conservation Law. 30 The USACE Nationwide 12 permit is a general permit regulating
utility line activities that have minimal environmental effects, issued pursuant to Clean Water Act §404.
31 See Joint Proposal Appendix D.
CASES 11-T-0401 and 12-G-0214
22
will be crossed by the pipeline and two of the streams also will
be crossed by an access road.
The Facility route in New York is located within the
Delaware River Basin Watershed and the Susquehanna River Basin
Watershed. The majority of the Facility is located within the
Delaware River Basin Watershed32 and a small portion of the
Facility is in the Susquehanna River basin watershed.33 Each of
these respective watersheds has a regulatory commission that has
been charged with monitoring water withdrawals within the
watershed.34
DRN’s contention that Bluestone must obtain approval
of the DRBC regarding construction of this pipeline mis-
apprehends the record in these proceedings. By letter dated
April 3, 2012, the DBRC advised Bluestone that the Facility is
not reviewable under the DRBC’s Rules of Practice and Procedure.
The terms and conditions of the Joint Proposal provide that
Bluestone will not withdraw or discharge any water from the
Delaware River Basin watershed for its Facility.
35
No adverse impacts to watersheds are anticipated.
Instead,
Bluestone will obtain the water needed for hydrostatic testing
from locations outside of the Delaware River Basin.
Consequently, DRN’s contentions that Bluestone must obtain
approval of the DRBC for this Facility and that Bluestone must
submit a water withdrawal application to the DRBC, must be
rejected.
32 From MP 0.0 to 8.7. 33 From MP 8.7 to 9.0; i.e., 0.3 miles. No water will be
withdrawn from or discharged to the Susquehanna River Basin watershed within New York for the Facility.
34 The DRBC and the Susquehanna River Basin Commission. 35 Joint Proposal, Paragraph 42.
CASES 11-T-0401 and 12-G-0214
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c. Wetlands
Wetlands surveys of the Facility area were performed
following review of the U.S. Fish & Wildlife Service, National
Wetlands Inventory (NWI) and New York State Freshwater Wetlands
Maps. Two NWI wetland complexes are located within the survey
area for the Facility.36
The total acreage of wetlands that occur within the
Facility footprint is 1.72 acres. However, only 1.25 acres will
be permanently impacted.
No state-regulated wetlands are located
within the survey area for the Facility.
37
The USACE, in accordance with Clean Water Act §404,
allows compensatory mitigation for unavoidable wetland impacts.
Such impacts must be minimized, and finally compensated for, to
the extent appropriate and practicable. The 1.25 acres of
wetlands permanently impacted by Facility construction will be
mitigated at a 2:1 ratio, a total of 2.5 acres of mitigation at
an off-ROW location. Bluestone has prepared a compensatory
mitigation plan for the Project.
These wetlands range in size from
0.003 acre to 0.17 acre.
38 Mitigation monitoring of the
compensatory wetlands will occur for a period of three to five
years, as required by USACE.39
d. Springs and Wells
One State-listed well has been identified within 500
feet of the proposed construction work areas for the Facility.
However, to ensure all springs and wells along the route have
been identified, Bluestone contacted individual landowners in
36 At MPs 3.11 and 6.31. 37 See Joint Proposal, Paragraph 44. 38 See Joint Proposal, Appendix A, Exhibit 11. 39 A ROW Restoration Plan that contains provisions for restoring
impacted wetlands is included with the Article VII Application as Exhibit FF.
CASES 11-T-0401 and 12-G-0214
24
proximity to the Facility route. Eleven landowners identified
well locations approximately 500 feet from proposed construction
areas. No adverse impacts to springs or wells are anticipated.
6. Aesthetic, Visual and Recreational Resources
In Broome County, the topography ranges from rolling
hills to steep slopes. No officially designated visual
resources such as scenic areas, roads, vistas and overlooks are
present in the Facility project area. During the planning and
pipeline phase of Facility, efforts were made by Bluestone to
minimize visual impacts where practicable including expanding
distances of the ROW from residences, altering the ROW route to
improve the visual aesthetics of road crossings, and the
avoidance of forested areas.
However, Bluestone identified the Route 17 crossing as
having an aesthetic effect as viewed from other portions of the
Route 17 roadway. As a result, Bluestone identified two
alternative routes to ascend the hillside south of Route 17.
The alternative routes utilize the existing topography and land
features to mitigate the visual effect of the ROW as seen from
the highway. The terms and conditions of the Joint Proposal
incorporate the preferred alternative in the proposed ROW. The
selected alternative utilizes points of inflection, or changes
in the direction of the pipeline route, on each side of Route 17
to minimize the visual impact of the ROW and the sight lines
created by the ROW.
Construction activities will be short-term, and any
long-term changes will be relatively minor. Potential visual
impacts during construction will be temporary due to the fact
that activities will be limited to pipeline ROW and access
roads. Only nine residences are located within 500 feet of the
ROW that could potentially have a view of the construction
activities. No known cultural or public recreational areas have
CASES 11-T-0401 and 12-G-0214
25
been identified that would have a view of the construction
activities associated with the pipeline.
Long-term facilities will include the small utility
buildings located at the Sanford Station, at the northern
“beginning” of the line. The existing woods that will remain
undisturbed around the perimeter of the Sanford Station will
provide natural screening of the Sanford Station site.
Consequently, the Sanford Station structures will not be visible
at the nearest residences and will not have a substantial impact
on the existing scenic quality of the area. Potential visual
impacts during construction of the Sanford Station will be
minimized because the activities will be limited primarily to
the access road and a footprint for the Sanford Station
facilities not to exceed 10.5 acres.
The nearest residence to the Sanford Station is more
than 2,100 feet away from the station. Construction activities
associated with the above-ground Sanford Station facilities or
the completed Sanford Station facilities will not be within view
from this residence. The above-ground facilities will be
located in the center of an existing wooded tract that will act
as a natural buffer to provide visual screening. Additionally,
the existing vegetation and terrain elevation differences will
further minimize any potential visual impacts.
7. Cultural Resources
Five inventoried archaeological resources have been
identified within two miles of the proposed Facility project
area. Four of the five were identified as part of a previous
Phase I archaeological survey undertaken for the Millennium
Pipeline corridor. All five inventoried sites occur on steep,
wooded slopes. Due to the presence of these archaeological
resources, the northernmost mile of the Facility and the
proposed Sanford Station are delineated as occurring within an
CASES 11-T-0401 and 12-G-0214
26
archeologically sensitive area. The remainder of the proposed
alignment south to the New York-Pennsylvania border occurs
outside any archeologically sensitive areas.
The New York Office of Parks, Recreation, and
Historic Preservation (OPRHP) has indicated that the Facility,
as currently designed, will have no effect on cultural resources
listed in the National Register of Historic Places (NRHP) or
eligible for inclusion in the NRHP. No additional cultural
resources work will be required for the Facility.
Additionally, in the event that cultural resources are
discovered during the construction of the Facility, Bluestone
has prepared an Unanticipated Discovery Plan.40
8. Noise and Traffic Impacts
This plan
provides procedures to follow if previously undiscovered
archaeological resources or human remains are identified during
soil sampling (excavation, boring, and coring) or during
pipeline construction.
The Application identifies the potential visual,
noise, and traffic impacts associated with construction and
operation of the Facility. An ambient sound survey and noise
impact evaluation has been conducted for the Facility.41
Vehicular and pedestrian traffic impacts during
construction will be minimal due to the rural nature of the
pipeline route. To mitigate construction impacts, Bluestone
will use, as a marshaling yard, the property owned by State Line
Resources LLC located at 180 Gulf Summit Road in Sanford. This
property is located approximately one-half mile from the right-
of way. The Bluestone contractor will maintain at least one
lane of traffic open for detours around construction at road
40 Joint Proposal, Appendix A, Exhibit 12. 41 See Application Exhibit C-13.
CASES 11-T-0401 and 12-G-0214
27
crossing locations, where practical, in accordance with
Bluestone’s Traffic and Transportation Management Plan.42
A private access road will be built from Pazzelli Road
into the site to the area where the Sanford Station Facilities
will be installed. During construction, intermittent truck
traffic will occur on the roads leading to the station site.
Such traffic will consist of dump trucks, concrete trucks and
freight delivery trucks. In addition, during the construction
period, daily traffic to and from the site will not exceed 30
vehicles used by workers employed at the site. After startup of
the Facility, the average number of vehicles accessing the
Sanford Station during regular operation will not exceed five
per day. To control for dust impacts due to increased traffic
during construction, Bluestone’s contractor will apply water as
a dust control measure, as necessary.
Traffic during normal operations of the pipeline and
Sanford Station will consist of small commercial vehicles.
Traffic will enter and exit the site between 7:00 a.m. and
7:00 p.m. Traffic flow will occur at regular intervals and will
be infrequent.
Noise impacts expected during construction will be
minimized by the rural and forested nature of the pipeline
route. Typical construction noise impacts associated with the
Facility will occur as a result of construction activities,
including limited excavation, earth moving, and possible
blasting. Construction activities will be conducted from
7:00 a.m. to dusk. To mitigate construction noise, construction
equipment manufacturers’ sound muffling devices will be used and
kept in good repair.
Once the Facility is operational, noise levels at the
Facility will be minimal. No compression or similar
42 See Application Exhibit EE.
CASES 11-T-0401 and 12-G-0214
28
mechanically driven equipment will be located at the Sanford
Station site. The only sources of noise associated with the
station include the occasional venting of gas as required for
periodic maintenance and noise from the flow control valves,
which are enclosed in an acoustically insulated building.43 As
described in the noise analysis, the operation of the station
has an estimated Leq sound level that is well below Commission
precedent of 40 dBA at the residences nearest to the Facility.44
Blasting activities are addressed separately, below.
9. Air Permitting
The Facility poses only a small potential for air
emissions from the equipment that will be located at the Sanford
Station. Such equipment includes the flare, pressurized
wastewater tank, and emergency generator. On February 1, 2012,
Bluestone obtained a Minor Source State Air Facility
Registration, issued by DEC.
The terms and conditions of the Joint Proposal provide
that all of the incoming gas to Sanford Station will be
odorized. Bluestone periodically will vent the wastewater
storage tank and blowdown emissions through an enclosed flare,
to mitigate any odors from the natural gas odorizing additive.
The primary purpose of the flare is safe combustion of natural
gas that is blown down (i.e., vented to the flare) to de-
pressurize equipment for periodic maintenance. The flare will
mitigate the release of odors from the station.
10. Road and Railroad Crossings
Seven public road crossings are planned for the
construction of the Facility, including William Law, School
House, Tennent, County Road 28, NYS Route 17, and Laurel Lake
43 See Application Exhibit C-13. 44 See Application Exhibit C-13, Noise Study.
CASES 11-T-0401 and 12-G-0214
29
Road. Bluestone has received a road crossing permit for NYS
Route 17.
One railroad will be crossed by Facility.45
11. Workspace
All roads
and the railroad may be crossed using the open-cut crossing or
conventional bore methods.
Application Exhibit F provides the location for all
workspace along the proposed pipeline route. The workspace
acquired from a landowner will be used as set forth in the terms
of the ROW agreement with that landowner.
12. Blasting
Blasting may be utilized along the Facility ROW.
Bluestone’s Blasting Plan serves as an overall guidance document
for blasting on the Facility route.46
In the event that blasting is required during
construction, Bluestone’s blasting contractor will provide
advance notice to all applicable and potentially-affected
entities, including adjacent property owners, local
municipalities, and other entities that may be required to be
notified, as set forth in the terms and conditions of the Joint
proposal and applicable regulations, as described in the
Bluestone plans to blast
only in the areas where the rock cannot be economically
excavated by conventional means. The primary type of blasting
will be ditch excavation, but blasting may also be required
during the ROW grading operation. The Joint Proposal’s terms
and conditions provide that if blasting activities are required,
Bluestone will retain the services of a duly licensed, bonded
blasting contractor.
45 See Application Exhibit AA. 46 See Joint Proposal, Appendix C, Attachment 3.
CASES 11-T-0401 and 12-G-0214
30
Bluestone Blasting Plan.47
13. Cumulative Impacts
Bluestone’s contractor will provide
such notice at least 48 hours prior to each blasting event
In its comments, DRN asserts that currently, no local,
state, or federal body is reviewing the cumulative impact of
pipeline construction activity in the Marcellus Shale Region,
and therefore, the Commission should require a cumulative
environmental impact analysis to be conducted for this Facility.
To the extent DRN requests that the Commission
consider future development of Marcellus Shale Region in New
York, DRN’s request is overbroad. DRN is essentially asking the
Commission to conduct the type of review that might be
appropriate if Bluestone were proposing several projects in New
York, or if the Commission were considering a generic policy for
development of natural gas gathering lines in the Marcellus
Shale Region of New York.48
These proceedings have included a comprehensive review
of all potential impacts of this Facility. As conditioned by
the Joint Proposal’s terms and conditions, any adverse
environmental impacts from the Facility will be minimal and
local, not regional, in nature. Such impacts are primarily
limited to temporary, construction-related disturbance and
inconvenience.
Here, the Commission is considering
a single facility and any substantial modification of this
Facility would be subject to further Commission review.
49
47 Within ¼ mile radius from the pipeline centerline.
Bluestone has agreed to several construction-
related measures and guidelines, in an effort to minimize
48 In its reply to DRN’s comments, DHC affirms its support for Bluestone’s Facility, but also advocates consideration of cumulative impact analysis in the review of future similar projects and encourages the development of a method for cumulative impact review for such projects.
49 See Joint Proposal, Paragraph 19, et seq.
CASES 11-T-0401 and 12-G-0214
31
adverse impacts to all property owners on or adjacent to the
proposed ROW. These measures and guidelines in the Joint
Proposal include utilizing this Commission’s generic EM&CS&P, a
Blasting Plan, an Invasive Species Management Plan, and a
Stormwater Pollution Prevention Plan. Other measures include
the elimination of proposed temporary construction workspace in
two separate areas along the proposed ROW, thereby avoiding
unnecessary impacts to two water bodies, and specific
construction techniques in four locations along the proposed ROW
to minimize the time that open trenches are present on steep
slopes, thereby reducing the occurrence of soil erosion that
typically results from construction on steep slopes.
Under these circumstances, all impact analysis
necessary in this case has been conducted in order for the
Commission to reach the decision to issue the Certificate and
CPCN.
Location of Line Will Not Impose Undue Hazard
The Facility will be designed, constructed, tested,
operated, and maintained in accordance with the provisions of
State and federal regulations.50
50 16 NYCRR Part 255 and 49 CFR 192 (Transportation of Natural
and Other Gas by Pipeline: Minimum Federal Safety Standards).
These regulatory standards
require, among other things, the x-ray of 10% of the welds,
because the Facility is located entirely within a Class I
location under U.S. Department of Transportation (DOT)
regulations. However, the Joint Proposal’s terms and conditions
provide that Bluestone will exceed these minimum requirements
and perform nondestructive radiographic testing on 100% of the
welds along the entire length of the pipeline. Furthermore,
Bluestone has designed the pipeline to meet the more stringent
design requirements of a DOT Class II location for all DOT Class
I locations.
CASES 11-T-0401 and 12-G-0214
32
Additional safety measures include:
Conformance with Gas Safety Regulations51
Odorization and monitoring of the Facility on a
continual basis;
to ensure
appropriate cover of the pipeline for all situations;
Bluestone’s membership in “Dig Safely New York” as an
excavator and operator. Bluestone’s contractors, prior to
construction of the Facility, will make the required calls to
the “One Call System” to have all utilities staked prior to
commencement of construction;
Real-time monitoring of the Facility 24 hours a day,
365 days a year, once the Facility is constructed and in
service, by Bluestone’s gas control personnel, as described in
Bluestone’s Operations and Maintenance Plan; and,
Ensuring the gas delivered into the Facility will meet
the gas quality specifications of the Millennium pipeline,
including monitoring on a real-time basis the quality of gas
coming into all receipt points of the Facility and the quality
of gas at the Sanford Station. Bluestone has the ability to
shut in the Facility at the Sanford Station or at any receipt
point if gas quality does not meet Millennium’s gas quality
standards. Conditioning or processing of the production gas, to
the extent necessary, will be done in Pennsylvania upstream of
the Facility. Such conditioning or processing may include the
use of water separation and dehydration facilities located
upstream of the Facility.
Conformity to Applicable State and Local Laws
The record in this proceeding shows that if a
Certificate and CPCN were to be granted subject to the terms and
conditions of the Joint Proposal, including the proposed
51 See 16 NYCRR Part 255.327.
CASES 11-T-0401 and 12-G-0214
33
certificate conditions, Bluestone will be required to adhere to
the substantive provisions of State laws and regulations in the
construction and operation of the Facility. Similarly,
notwithstanding Bluestone’s exemption from the jurisdiction of
local municipalities, the Facility will be constructed in a
manner that conforms to all substantive local laws and
ordinances.
Incorporation
Bluestone has satisfied the requirements of PSL §68 by
filing with the Secretary a copy of Bluestone’s Certificate of
Incorporation pursuant to the Transportation Corporations Law
(filed with the N.Y.S. Department of State on April 21, 2010)
and a Certificate of Good Standing (issued on May 7, 2012 by the
N.Y.S. Department of State).
Franchise from the Proper Municipal Authorities
With its §68 Petition, Bluestone has filed a copy of
the executed Road Use Agreement with the Town of Sanford.52 In
this instance, Bluestone is seeking approval of the exercise of
a franchise, the Road Use Agreement, between Bluestone and the
Town of Sanford.53
52 PSL §68 provides that a gas corporation seeking a CPCN must
file with the Commission “a verified statement of the president and secretary of the corporation, showing that it has received the required consent of the proper municipal authorities.” Here, in lieu of such a filing, Bluestone has filed a copy of the Road Use Agreement with the Town of Sanford. In providing the agreement itself, Bluestone has substantially complied with this statutory filing requirement.
53 As used in PSL §68, the term “franchise” includes consents to use municipal property. See Case 10-G-0462, Petition of DMP New York, Inc. and Laser Northeast Gathering Company, LLC, Order Granting Certificate of Public Convenience and Necessity and Providing for Lightened Rate Making Regulation (issued February 22, 2011) at 5.
CASES 11-T-0401 and 12-G-0214
34
The Facility will occupy and traverse under roads
owned by the Town of Sanford. On October 6, 2011, a Road Use
Agreement was executed by Bluestone and the Town of Sanford.
Public Interest, Convenience, and Necessity
The discussion of the public interest, convenience,
and necessity begins by addressing Ms. Iaboni’s remaining
issues.
1. Bluestone’s Financial Capability
Ms. Iaboni contends that Bluestone has not provided
satisfactory assurance of its financial capabilities. Bluestone
is financing the Facility internally through its parent company,
DTE Pipeline Company. DTE Pipeline Company is a wholly owned
subsidiary of DTE Energy Company.54
Joint Proposal, Paragraph 121 describes Bluestone’s
management team and financial capability, as follows:
Bluestone’s management team
comprises individuals that have successfully developed other,
similar projects.
121. Bluestone is an experienced and financially viable developer and operator of energy projects. Bluestone's management team experience includes the design and construction of several pipelines, including the Vector Pipeline, the Millennium Pipeline, and the Dawn Gateway Pipeline. Bluestone is financing the [Facility] internally through its parent company, DTE Pipeline Company. DTE Pipeline Company is a wholly owned subsidiary of DTE Energy Company ("DTE Energy"). DTE Energy is a publicly traded company listed on the New York Stock Exchange with $8.5 billion in equity market capitalization (as of June 30, 2011), $26 billion in assets (as of year end 2011) and in 2011 had $8.9 billion in revenues and $711 million in net income. DTE Pipeline Company's assets include a 26.25 percent in the Millennium Pipeline, located primarily in New York and a 40 percent interest in the Vector
54 See Joint Proposal, Paragraphs 120 and 121.
CASES 11-T-0401 and 12-G-0214
35
Pipeline that runs between Chicago, Illinois and Ontario, Canada. DTE Energy, through its subsidiaries, also is an experienced developer, builder, owner and operator of natural gas gathering systems having developed built and operated over 840 miles of gathering pipeline providing over 500 MMDth/day (peak) of throughput. Thus, the [Facility] is economically feasible, and, as described in this Joint Proposal, environmentally compatible, safe and in the public interest.
In addition, Bluestone has entered into a binding,
long-term agreement with Southwestern Energy Services (SES), an
affiliate of Southwestern Energy, to provide gathering and
dehydration services for SES’s production currently under
development in Susquehanna County, Pennsylvania. SES has
committed to Bluestone a minimum of 875 BCF from approximately
30,000 acres in Susquehanna County. Several wells that will
ultimately deliver natural gas to the Facility have already been
successfully drilled.55
Furthermore, the Road Use and Crossing Agreement
between Bluestone and the Town of Sanford requires Bluestone to
obtain and deliver to the Town a bond in the amount of $1
million before starting construction under any town road. The
bond ensures that any damage to town roads will be repaired.
The financial strength and development experience of DTE Energy,
the contractual commitments from SES, and the requirement of the
road use and crossing bond adequately establish Bluestone’s
financial capabilities to construct, own, and operate the
Facility.
In sum, the record in these proceedings shows that
Bluestone is an experienced and financially viable developer and
operator of energy projects.
55 Joint Proposal, Paragraphs 14 through 16.
CASES 11-T-0401 and 12-G-0214
36
2. Eminent Domain Procedure Law Considerations
Ms. Iaboni asserts that the Joint Proposal incorrectly
states the requirements of the Eminent Domain Procedure Law
(EDPL) and that the Commission should require Bluestone to
comply with the provisions of the EDPL.
Joint Proposal, paragraph 116 provides that:
Bluestone agrees that it is prohibited by law from commencing construction of the Facility on any parcel of property if it has not obtained the necessary property rights for such parcel of property.
Joint Proposal, Appendix C, Paragraph 1(q), provides:
At least 5 days prior to the commencement of construction, Bluestone shall file with the Secretary all landowner easement agreements or other documents evidencing the right to access such property. For property that will be acquired pursuant to the Eminent Domain Procedure Law, Bluestone shall file with the Secretary proof that it has filed a Notice of Pendency and a Petition pursuant to New York Eminent Domain Procedure Law §402 at least 5 days before the commencement of construction.
Ms. Iaboni asserts that the phrase “necessary property
rights” in Joint Proposal, Paragraph 116, is vague. Reading
Appendix C and Paragraph 116 together, Ms. Iaboni is concerned
that, after filing a Notice of Pendency and a Petition pursuant
to EDPL §402, Bluestone will assert it has the “necessary
property rights” to enter and commence construction of the
Facility on lands subject to eminent domain proceedings, before
a Judicial determination of property rights has been reached
under the EDPL.
Both Bluestone and Staff contend that the Joint
Proposal’s terms and conditions provide that Bluestone must
obtain necessary property rights through negotiation with the
CASES 11-T-0401 and 12-G-0214
37
landowner, or through eminent domain proceedings, before it can
enter upon or construct the facility on that property. Staff
states that the purpose of Paragraph 1(q) is to ensure that
before the start of construction on any parcel of property,
Bluestone will demonstrate, by a filing with the Secretary,
either that it has already acquired the necessary property
rights or that it will shortly be acquiring such rights through
eminent domain, for the entire length of the Facility.
Bluestone and Staff contend that the terms and conditions of the
Joint Proposal are sufficiently clear and Ms. Iaboni’s concerns
are misplaced.
However, the language of the Joint Proposal, Appendix
C, Paragraph 1(q) can be revised to provide further
clarification to address Ms. Iaboni’s concern. Paragraph 1(q)
can be revised to clarify that the filing with the Secretary of
a Notice of Pendency and a Petition pursuant to the EDPL for
property that will be acquired by eminent domain is a pre-
condition to Bluestone’s commencement of construction upon the
other lands for which Bluestone has obtained landowner easement
agreements or other documents evidencing the right to access
such property. Bluestone and Staff agree that this is the
intended meaning of the terms of the Joint Proposal. Therefore,
the operative language is revised, as follows:
Bluestone shall not begin construction of the Facility until 5 days after it has filed with the Secretary proof that it has filed a Notice of Pendency with the applicable County Clerk and a Petition with a court of competent jurisdiction pursuant to New York Eminent Domain Procedure Law (EDPL) §402 with respect to all properties that will be acquired pursuant to the EDPL. Bluestone shall not begin construction upon any property until 5 days after it has filed with the Secretary documentation evidencing vesting of title to that property, such as a recorded deed or easement obtained from the original landowner
CASES 11-T-0401 and 12-G-0214
38
or an acquisition map filed pursuant to an order of a court of competent jurisdiction pursuant to the EDPL.
Also, Ms. Iaboni expresses concerns about the
Facility’s potential impacts to mineral deposits, such as
bluestone or shale gas, located on and under her property and
the property of other owners on or adjacent to the proposed ROW.
Bluestone contends that this concern should not serve as a basis
for rejecting or modifying the Joint Proposal. Ms. Iaboni’s
concern, Bluestone asserts, relates to property values.
Bluestone contends that to the extent it already has agreements
or commitments with other property owners, those property owners
have been or will be compensated for the potential disturbances
to their property. Such property valuation issues, Bluestone
asserts, are not properly addressed within the scope of an
Article VII proceeding. Instead, Bluestone argues, property
valuation issues are properly addressed either through
Bluestone’s negotiation with individual property owners or,
failing to reach a negotiated agreement, through an eminent
domain proceeding in the courts.
In addition, Bluestone contends that Ms. Iaboni has
not presented any evidence that the Facility will adversely
impact any mineral deposits on her property. In the event that
Bluestone and Ms. Iaboni cannot reach a negotiated agreement
regarding the value of Ms. Iaboni’s land, Bluestone intends to
acquire the necessary property rights pursuant to the EDPL. In
that event, Bluestone contends that the EDPL provides Ms. Iaboni
with an opportunity to present evidence to a court of law
regarding the value of the portion of her land that Bluestone
seeks to acquire for the Facility, including interests in
mineral rights.
CASES 11-T-0401 and 12-G-0214
39
The Facility property valuation issues identified by
Ms. Iaboni are appropriately addressed either through
negotiation or in an eminent domain proceeding.
3. Location of Facility on the Iaboni Property
Ms. Iaboni asserts that Bluestone does not have to
locate the Facility on her property or, in the alternative, does
not have to locate the Facility on her property to the extent
proposed in the Joint Proposal. Ms. Iaboni states that, whereas
Bluestone’s original application proposed a route traversing 986
linear feet of her property, the Joint Proposal’s route proposes
traversing 2176 linear feet of her property. This proposed
increase, Ms. Iaboni implies, is not justified and, compared to
Bluestone’s original application, shows that less of her
property is “needed.”
In response, Bluestone asserts that its original
application, filed pursuant to PSL §121-a(3), provides no basis
to support Ms. Iaboni’s request to re-route the Facility to
avoid her property. PSL §121-a(3), Bluestone emphasizes,
expressly exempts applicants seeking to construct a natural gas
transmission line of less than 10 miles from providing a
description of any reasonable alternate location for the
proposed facility, a description of the comparative merits and
detriments of each location submitted, or a statement of the
reasons why the primary proposed location is best suited for the
facility.56
Moreover, Bluestone contends the record in these
proceedings shows that the proposed route is appropriate. The
Facility’s original route traversed property that contained
several buildings and structures in close proximity to each
other, including one building that would have been only 39 feet
from the proposed ROW. In addition, the original route
56 See PSL § 121-a(3)(a).
CASES 11-T-0401 and 12-G-0214
40
traversed three invasive species areas. The current route
completely avoids these structures and invasive species areas.
Following consultation with Staff, Bluestone determined that the
currently proposed route is better suited to the construction
and operation of the Facility than the originally-proposed
route.
Ms. Iaboni’s conclusory statement that the Facility
should be re-routed is not sufficient to warrant a change to the
route of the Facility. Consequently, Ms. Iaboni’s request that
the Facility be re-routed to avoid, or traverse less of, her
property must be rejected.
* * *
Certification of the Facility will serve the public
interest, convenience and necessity. Broad support has been
demonstrated for the Joint Proposal. Among the Signatory
Parties, the state agencies, as well as DHC, have a role to
protect the public interest. DHC holds conservation easements
donated to it as a benefit to the general public and states that
its role is to protect the public interest.
The compromises set forth in the Joint Proposal are
reasonable and appropriate. A comparison of Bluestone’s initial
proposal to the recommendations set forth in the Joint Proposal
demonstrates that the settlement results are within the bounds
of a litigated outcome. For example, Bluestone initially
proposed to install compression and dehydration equipment at the
Sanford Station. Under the Joint Proposal’s terms and
conditions, Bluestone has withdrawn that request and will seek
future Commission approval if or when compression is needed at
the Sanford Station. Bluestone agreed that all natural gas
entering the Facility will be dehydrated before entering New
York State and will meet the gas quality specifications in
Millennium Pipeline's tariff approved by the FERC. In addition,
CASES 11-T-0401 and 12-G-0214
41
Bluestone has modified the angle of crossing at two points of
the Route 17 crossing in order to minimize the visual impact of
the Facility at those crossing locations. These modifications
to the Facility indicate substantial negotiation among the
parties, resulting in reduced adverse impacts in New York.57
This Facility is needed to transport gas from gas
wells in Pennsylvania to the Millennium pipeline in New York.
Millennium helps supply local distribution companies in the
Southern Tier of New York and in New York City gas markets.
Significant local need and demand for the Facility exists.
Furthermore, the Facility is expected to produce economic
benefits to the local economy during construction and operation
of the Facility.
The development, financing, construction and operation
of the Facility will be on an entrepreneurial basis with no
reliance on cost-of-service rates set for Bluestone by either a
Federal or State regulatory entity. Furthermore, the Facility
will not be included in utility rate base, either directly or
indirectly through a contractual arrangement with a regulated
utility.
The Joint Proposal is a reasonable compromise of the
Signatory Parties’ diverse interests and positions. The terms
and conditions of the Joint Proposal, including the proposed
Certificate Conditions, will maximize the safety of the Facility
and will minimize its adverse environmental impacts. Many of
the proposed Certificate Conditions are similar to, or more
stringent than, conditions that the Commission recently adopted
57 Public comments opposing the Facility identified concern
about health effects and adverse environmental impacts of the compression units and dehydration equipment proposed in Bluestone’s original application. The current project eliminates these features and therefore addresses these concerns.
CASES 11-T-0401 and 12-G-0214
42
for a similarly-sized natural gas gathering line located in the
same geographic region as the Bluestone Facility.58
The record in these proceedings demonstrates that the
overall sum of the Joint Proposal’s terms and conditions is in
the public interest. The Certificate of Environmental
Compatibility and Public Need and the Certificate of Public
Convenience and Necessity are granted, subject to this order,
which adopts the terms and conditions of the Joint Proposal,
except as expressly modified above.
Construction
of the Facility will not have any significant permanent adverse
impacts.
It is ordered:
1. Bluestone Gas Corporation of New York, Inc. is
granted a Certificate of Environmental Compatibility and Public
Need, and a Certificate of Public Convenience and Necessity (for
road use and crossings) authorizing construction and operation
of the Facility, as detailed in the Article VII application, the
PSL §68 Petition, and supplemental filings, including the
August 8, 2012 Joint Proposal.
2. The terms and conditions of the August 8, 2012
Joint Proposal, submitted by the Signatory Parties and attached
to this order, are adopted and made a part of this order, except
for Appendix C, Paragraph 1(q) of the Joint Proposal, which is
modified as described herein above.
3. Bluestone Gas Corporation of New York, Inc.
shall, within five days after the issuance of the Certificates,
submit to the Secretary a verified statement that it accepts and
will comply with the Certificates and the conditions placed upon
58 Case 10-T-0350, Application of DMP New York, Inc. and Laser
Northeast Gathering Company. LEC, Ordering Granting Certificate of Environmental Compatibility and Public Need, (issued February 22, 2011) at 69—89 (“Laser Order”).
CASES 11-T-0401 and 12-G-0214
43
the Certificates. Failure to comply with this condition shall
invalidate the Certificates.
4. Bluestone Gas Corporation of New York, Inc. shall
construct, operate and maintain all fuel gas transmission lines
less than ten miles long in accordance with the DPS’s Revised
EM&CS&P, effective December 7, 2006, as adopted in PSC Case No.
06-T-1383, except to the extent specific measures and techniques
are indicated in the conditions contained in Appendix C of the
Joint Proposal.
5. The maximum pressure of the pipeline shall not
exceed 1,440 pounds per square inch gauge; the Company shall
design, construct, test, operate and maintain the pipeline in
accordance with the provisions of 16 NYCRR Part 255 applicable
to steel transmission lines; the Company shall be a member of
the one-call notification system in the area where the line is
located and comply with the requirements for excavators and
operators for the protection of underground facilities set forth
in 16 NYCRR Part 753; at least 30 days before construction
commences, the Company shall submit an Appendix 7-D to Gas
Safety Staff in Albany; also, the Company shall notify Dig
Safely New York of the addition of this pipeline to its system
prior to the pipeline in-service date.
6. Bluestone shall perform nondestructive
radiographic testing on 100% of the welds along the entire
length of the pipeline.
7. Bluestone Gas Corporation of New York, Inc. shall
integrate and coordinate maintenance of the certified Facility
with that of adjacent facilities.
8. Bluestone Gas Corporation of New York, Inc. shall
promptly notify the Secretary in writing should it decide not to
complete construction of all or any portion of this Project and
shall serve a copy of such notice upon all parties.
CASES 11-T-0401 and 12-G-0214
44
9. The Secretary may extend any deadlines
established by this order for good cause shown.
10. These proceedings are continued.
(SIGNED) Commissioner