New York v. Niagara Mohawk Power Corp.

• Decision Date: 28 April 2003
• Docket Number: No. 02-CV-24S.,02-CV-24S.
• Citation: 263 F.Supp.2d 650
• Court: U.S. District Court — Western District of New York
• Parties: State of NEW YORK and Erin M. Crotty, Commissioner of the New York State Department of Environmental Conservation, Plaintiffs, v. NIAGARA MOHAWK POWER CORPRATION, NRG Energy, Inc., NRG Northeast Generation,<SMALL><SUP>1</SUP></SMALL> NRG Dunkirk Operations, Inc., Dunkirk Power, LLC, NRG Huntley Operations, Inc., Huntley Power, LLC, NRG Northeast Generating, LLC, NRG Eastern, LLC, and NRG Operating Services, Inc., Defendants.

263 F.Supp.2d 650

State of NEW YORK and Erin M. Crotty, Commissioner of the New York State Department of Environmental Conservation, Plaintiffs, v. NIAGARA MOHAWK POWER CORPRATION, NRG Energy, Inc., NRG Northeast Generation,¹ NRG Dunkirk Operations, Inc., Dunkirk Power, LLC, NRG Huntley Operations, Inc., Huntley Power, LLC, NRG Northeast Generating, LLC, NRG Eastern, LLC, and NRG Operating Services, Inc., Defendants.

No. 02-CV-24S.

United States District Court, W.D. New York.

April 28, 2003.

COPYRIGHT MATERIAL OMITTED

Michael Joseph Myers, J. Jared Snyder, Office of the Attorney General Environmental Protection Bureau, Albany, NY, for Plaintiffs.

Thomas R. Lotterman, Duke K. McCall, III, Swidler Berlin Shereff Friedman, LLP, Washington, DC, Joseph M. Finnerty, Stenger & Finnerty, Buffalo, NY, Timothy J. Lambrecht, Devorsetz, Stinziano, Gilberti, Heintz & Smith, P.C., Syracuse, NY, Kevin J. Brown, William J. Gilberti, Jr., Devorsetz, Stinziano, Gilberti, Heintz & Smith, P.C., Syracuse, NY, William M. Bumpers, David Super, Baker Botts LLP, Washington, DC, for Defendants.

DECISION AND ORDER

SKRETNY, District Judge.

I. INTRODUCTION

Plaintiffs State of New York and Erin M. Crotty ("the State") bring this action as parens patriae pursuant to the citizen suit provisions of the Clean Air Act, 42 U.S.C. §§ 7604(a) and 7477, seeking redress for alleged violations of the federal Clean Air Act and related state environmental conservation laws by Defendants Niagara Mohawk Power Corp. ("Niagara Mohawk") and nine other defendants² (the "NRG Defendants").

Presently before this Court are two separate Motions to Dismiss the State's Amended Complaint³: one filed by Niagara Mohawk, the other filed jointly by the NRG Defendants.⁴ This Court heard oral argument on both motions on July 16, 2002, and took the matters under advisement at that time. For the reasons stated below, this Court will grant in part and deny in part Niagara Mohawk's Motion to Dismiss, and grant the NRG Defendants' Motion to Dismiss in its entirety.

II. BACKGROUND

A. Regulatory Background: The Clean Air Act

The Clean Air Act, 42 U.S.C. § 7401 et seq., was originally enacted in 1955. Congress has since enacted significant amendments to the Act, most notably in 1970, 1977 and 1990. The federal regulations implementing the Clean Air Act are codified at 40 C.F.R. § 50 et seq. Though somewhat of a work in progress, the objective of the Clean Air Act has remained constant: for the federal government to work with the states to promote the public health and welfare by protecting and enhancing the quality of the nation's air, and to encourage and assist in the development and operation of regional air pollution prevention and control programs. 42 U.S.C. §§ 7401(b)(1) and (4).

While the Clean Air Act is a piece of federal legislation, the Act itself recognizes that air pollution prevention and control measures must be directed at the source of the pollution. 42 U.S.C. § 7401(a)(3). Primary responsibility for implementation of the Act therefore falls on state and local governments. Id. Accordingly, the interplay and cooperation of the federal and state governments is crucial to meet the objectives of the Clean Air Act. See, e.g., 42 U.S.C. § 7402.

Under the Act, the United States Environmental Protection Agency is charged with establishing primary and secondary national ambient air quality standards for particular air pollutants.⁵ See 42 U.S.C. §§ 7408, 7409. Each state must submit a "state implementation plan" ("SIP") providing for the implementation, maintenance, and enforcement of these primary and secondary national ambient air quality standards. 42 U.S.C. § 7410. New York has complied with this requirement. See 6 N.Y.C.R.R. §§ 200-317.

The Act also provides for "new source review," which is intended to control emissions from new and modified stationary sources.⁶ For "nonattainment areas,"⁷ the plan requirements codified at 42 U.S.C. §§ 7501-7515 govern; for "attainment areas," ⁸

the provisions for the prevention of significant deterioration of air quality ("PSD") codified at 42 U.S.C. §§ 7470-7492 control.

At issue here are the PSD provisions. These provisions were enacted in 1977 to ensure that attainment areas continue to maintain the national air quality standards. United States v. Illinois Power Co., 245 F.Supp.2d 951, 953 (S.D.Ill.2003); LaFleur v. Whitman, 300 F.3d 256, 260-61 (2d Or. 2002). The express purpose of these provisions, inter alia, is to protect public health and welfare from any adverse effects from air pollution and to ensure economic growth while preserving clean air resources. 42 U.S.C. §§ 7470(1) and (3).

Under 42 U.S.C. § 7475(a), no major emitting facilities⁹ on which construction ¹⁰ is commenced after August 7, 1977, may be constructed unless the preconstruction requirements of 42 U.S.C. § 7475 have been satisfied. Those requirements include, among others, that a preconstruction permit setting forth emissions limitations for the proposed facility be obtained, that the proposed facility be subject to the best available control technology¹¹ ("BACT") for each pollutant subject to regulation, that there be an analysis of any air quality impacts projected due to the growth of the proposed facility, and that the person who owns or operates the proposed facility agree to conduct such monitoring as may be necessary to determine the effect of any emissions. See 42 U.S.C. §§ 7475(a)(1), (4), (6) and (7).

B. The State's Amended Complaint

At this stage, this Court assumes the truth of the factual assertions contained in the State's Amended Complaint. See Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 1850, 48 L.Ed.2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir.1997).

1. Niagara Mohawk

The State alleges that Niagara Mohawk constructed or modified two major emitting facilities—the Dunkirk and Huntley power plants (the "Facilities")—without securing the proper preconstruction permits and implementing the proper pollution emissions controls required by federal and state law. (Amended Complaint, ¶¶ 1, 2.) The Dunkirk facility is located in Dunkirk, New York; the Huntley facility is located in Tonawanda, New York. (Amended Complaint, ¶¶ 2,18,19.)

Beginning in the early 1980s, Niagara Mohawk instituted a program to extend the operational lives of its aging powergenerating boiler units at the Facilities. (Amended Complaint, ¶¶ 63.) Each of the ten boiler units in question were nearing their anticipated retirement dates.¹² (Amended Complaint, ¶¶ 48, 49, 56, 57, 58.) Extending the operational lives of these units would allow Niagara Mohawk to recoup lost generating capacity and decrease the occurrences of forced outages. (Amended Complaint, ¶¶ 63, 70.)

In 1985, Niagara Mohawk developed a two-phase approach for examining the boiler units at the Facilities. (Amended Complaint, ¶ 67.) The first phase consisted of inspecting high energy components such as turbine generators, steam and mud drums, economizer inlet headers and piping subject to creeping. (Amended Complaint, ¶ 67.) The second phase involved inspecting boilers, major equipment and piping susceptible to corrosion, electrical, instrumentation and control items. (Amended Complaint, ¶ 67.)

In 1987, Niagara Mohawk organized a life extension project team to coordinate life extension modifications at the Facilities. (Amended Complaint, ¶ 69.) Niagara Mohawk determined that extending the operational lives of the Facilities would cost approximately nine times less than building three new coal-fired units. (Amended Complaint, ¶ 69.) It therefore continued modifying the Facilities as part of its life extension program. (Amended Complaint, ¶ 70.)

Between 1982 and 1999, each of the boiler units at the Facilities underwent modification upgrades. (Amended Complaint, ¶¶ 71-75 (Unit 1), 101-108 (Unit 2), 134-142 (Unit 3), 168-173 (Unit 4), 64, 199-204 (Unit 63), 231-236 (Unit 64), 262-266 (Unit 65), 292-295 (Unit 66), 321-326 (Unit 67), 352-361 (Unit 68).) Each of these modifications constituted a "major modification" or "construction of a major emitting facility" requiring the issuance of a preconstruction permit prior to commencement of construction. (Amended Complaint, ¶¶ 77,110, 144, 175, 206, 238, 268, 297, 328, 363.) Niagara Mohawk never applied for or obtained the appropriate permits for any of these modifications. (Amended Complaint, ¶¶ 78, 111, 145, 176, 207, 239, 269, 298, 329, 364.) Nor did Niagara Mohawk implement BACT for the emissions of nitrogen oxides and sulfur dioxide from the Facilities. (Amended Complaint, ¶¶ 87, 119, 154, 185, 216, 248, 278, 307, 338, 373.)

Niagara Mohawk owned and operated the Facilities until June 11, 1999, at which time it transferred ownership to the NRG Defendants. (Amended Complaint, ¶¶ 2, 13.)

2. NRG Defendants

Defendant NRG Energy, Inc., currently owns and operates the Dunkirk facility through its subsidiaries Defendants NRG Eastern, LLC, NRG Northeast Generating, LLC, NRG Operating Services, Inc., Dunkirk Power, LLC and NRG Dunkirk Operations, Inc. (Amended Complaint, ¶ 2.) Defendant NRG Energy, Inc. also currently owns and operates the Huntley facility through its subsidiaries NRG Eastern, LLC, NRG Northeast Generating, LLC, NRG Operating Services, Inc., Huntley Power, LLC and NRG Huntley Operations, Inc. (Amended Complaint, ¶ 2.)

Although the State has generally lumped Niagara Mohawk and the NRG Defendants together in its Amended Complaint, it is clear from oral argument that the State does not assert that the NRG Defendants actually made any modifications to the Facilities. Rather, the State alleges that the NRG Defendants are liable for continuing to operate the Facilities without preconstruction permits and without implementation of BACT.

III. DISCUSSION

A court may dismiss an action pursuant to Rule 12(b)(6) of the Federal Rules of Civil...