April 25, 2012 VIA First Class Mail and Email (secretary@dps.ny.gov) Hon. Jaclyn A.

Brilling Secretary, New York State Public Service Commission Three Empire State Plaza Albany, New York 12223-1350 Re: Case 12-F-0036 In the Matter of the Rules and Regulations of the Board on Electric Generation Siting and the Environment, contained in 16 NYCRR, Chapter X, Certification of Major Electric Generating Facilities

Dear Secretary Brilling: Iberdrola Renewables submits the following comments in the above referenced rulemaking proceeding. Iberdrola Renewables is a part of Iberdrola S.A., an energy pioneer with the largest renewable asset base of any company in the world over 12,000 megawatts (MW) of renewable energy in 23 countries. Iberdrola Renewables, LLC is the second-largest wind operator in the U.S., successfully developing more than 5,000 MW, enough energy to meet the needs of more than one million typical American homes. These projects not only generate clean energy, but represent significant capital investments that have created employment, tax revenues and positive economic impacts in every region of the U.S. In New York State, Iberdrola Renewables owns and operates the 74MW Hardscrabble Wind Farm in Herkimer County and the 321MW Maple Ridge Wind Farm with our joint venture partner, EDP Renewables in Lewis County. In addition, we currently have more than 500MW under development in New York. Based on this experience, Iberdrola Renewables urges the Siting Board to adopt the revisions proposed herein. We commend Department of Public Service Staff for the changes to the earlier version of the proposed regulations that represent improvement. It is clear that Staff endeavored to improve the noise assessment requirements and to accommodate the unique physical aspects of wind energy development, which affects only a small percentage (typically less than 3%) of a projects total leased land. Unlike fossil fuel proposals with smaller project areas, wind projects often require fine tuning of the physical layout during the final engineering phase.
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Case 12-F-0036 - Draft Memorandum and Resolution Initiating Promulgation Process for Proposed Article 10 Regulations and adopting Notice of Proposed Rulemaking, State of New York Board on Electric Generation Siting and the Environment (March 23, 2012) (referred to hereinafter as Notice of Proposed Rulemaking).

With the reduction of the regulatory threshold to 25 MW under Article 10, the Siting Board will decide how the State will meet its policy objectives. The State is already behind schedule for meeting its renewable 2 energy objective of achieving 30% renewable supply by 2015, and will require substantially more new generation to come on line if these goals are to be met in the next three years. Additionally, Governor Cuomos New York Open for Business program and the related and recently announced New York Energy Highway initiative also will rely on the investment and economic benefits that renewable energy projects can bring to the State. As such, in order to achieve these policy goals, the Article 10 regulations must facilitate responsible review that avoids unnecessary delay and avoids unduly burdensome review requirements. Despite positive improvements to the earlier draft of the proposed regulations, several critical amendments are still necessary. Certain application requirements defined in the regulations are contrary to Article 10 and/or seek information that is in some cases burdensome and in others represents the most highly confidential and proprietary information held by wind energy developers. The confidentiality of this information is essential to success in a competitive market. Iberdrola Renewables does not believe this information is necessary to make the findings required by Public Service Law (PSL) 168. We respectfully request that the proposed regulations be modified in the following important ways.

Applicants Should Not Be Required to Disclose Proprietary Information such as Capital Costs or Meteorological Data. Iberdrola Renewables objects to the requirement of Section 1001.14 to provide a detailed estimate of the total capital costs of the proposed facility, and to the requirement to provide cost estimate work papers to any party or to the Department of Public Service. We note that nothing in the application requirements detailed in PSL 164 mentions or requires submission of information regarding costs. Indeed, the legislature specifically deleted the language requiring the submission of cost information contained in the 3 former Article X. Capital cost information is not required to make the findings required by Public Service Law 168(4)(b), (e) and (g). Moreover, the former Article X, which, unlike the present Article 10, specifically required an applicant to submit cost information in certain instances, only required submission of estimated cost 4 information, and participants in the competitive market were exempt from even providing estimated cost 5 information. There is no justification for the onerous cost standard set out in the proposed regulation,
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Case 03-E-0188 - Proceeding on Motion of the Commission Regarding Retail Renewable Portfolio Standard, Order Regarding Retail Renewable Portfolio Standard (Sep. 24, 2004).
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See former N.Y. PSL 164(d). The expired Article X required estimated cost information for facilities not selected pursuant to an approved procurement process, but the current legislation contains no such requirement.
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See former N.Y. PSL 164(d), and former 16 NYCRR 1001.4 (emphasis added).

Former 16 N.Y.C.R.R. 1001.4 (implementing the previous Public Service Law Article X enacted in 1992) required an applicant to provide estimated cost information, if the facility was not selected pursuant to an approved procurement process. The Public Service Commission has previously issued determinations that competition in the electricity supply marketplace is an approved procurement strategy that is consistent with long range New York State Energy Plan objectives. See, e.g., Case 02-E-1127, Petition of Independent Power Producers of New York, Inc. for a Declaratory Ruling that Competition in

particularly in light of the fact that it is not authorized by the legislation, and it is not required to make any of the Siting Boards findings Moreover, capital costs constitute critically sensitive and proprietary information for wind projects. Because wind energy projects have no fuel costs, capital costs are the key driver of profitability. For a company like Iberdrola Renewables, which has built a business model that includes turbine inventories and market plays, proprietary cost forecasting, and industry-specific expertise, a requirement to reveal its formula for success would be an unjustified intrusion. For energy developers operating in the competitive supply markets, detailed cost information is highly confidential, trade secret information that cannot be disclosed to the public, competitors or third parties. The wind data required by proposed Section 1001.6(d) is proprietary. The data itself does not demonstrate that adequate wind conditions exist, the demonstration comes from the analysis. An applicant can demonstrate that it analyzed the data using state-of-the-art industry practices. Accordingly, the Siting Board should not compel disclosure of the data. Some parties may argue that information can be protected from disclosure under the Freedom of Information Law (FOIL) or a protective order under the Department of Public Service (DPS) FOIL 6 implementation regulations, however, these protections are insufficient. Agencies may deny access to 7 trade secret information, but are not required to protect such information. While FOIL contains some limited trade secret protections, the primary purpose is to provide access to government records and a reviewing court insensitive to the trade secrets of a wind energy company may be predisposed to disclosure. FOIL is subject to change that may reduce or eliminate protections to the extent they do 8 exist. Access to the companys confidential information, be it by accident, by agency determination that the information should not be protected, by legislation or otherwise would cause extreme unacceptable economic harm that cannot be allowed under any circumstances. FOIL protections are incomplete, provide no indemnification against harm stemming from disclosure of the information, and are not guaranteed. Indeed, the proposed regulations make disclosure obligatory; Section 1001.14 flatly states that [u]pon the demand of any party or of DPS, the applicant shall supply the work papers, contrary to the misleading characterization of the Notice of Proposed Rulemaking, which states that the presiding 9 examiner may, if needed, provide for sharing of such information. Iberdrola Renewables cannot underemphasize the highly proprietary nature of its calculations of capital cost and meteorological data. These data represent the most sensitive, proprietary and highly confidential information held by our company. It is never divulged to anyone who is not a financial partner who has signed a non-disclosure agreement, who has agreed to significant indemnification provisions and who has the ability to satisfy such indemnifications. Even under such circumstances, the information would only be disclosed on a need-to-know basis. None of these conditions are satisfied under the proposed regulations; thus disclosure would be unacceptable to Iberdrola Renewables. the Electricity Supply Market is an Approved Procurement Process Reasonably Consistent with the 2002 State Energy Plan, Declaratory Ruling Concerning Approved Procurement Process (Oct. 24, 2002).
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16 N.Y.C.R.R. Part 6. N.Y. POL 87(2)(d).

Indeed, a recent recommendation to modify FOIL would require commercial enterprises to periodically renew requests for confidentiality. The New York Department of State Committee on Open Government, Report to the Governor and the State Legislature, p. 16 (2011). The risk of such a change resulting in disclosure would be unacceptable.
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Notice of Proposed Rulemaking, pp. 10-11.

Of significant import, cost and meteorological analyses are not relevant to an Article 10 proceeding. The Siting Board does not set wholesale rates. The purpose of Article 10 is not to analyze the cost structure of the applicant, it is not to set rates for the facilitys output, and it is not to assess how the applicant determined the capacity factor of the facility. Other facts are available to determine whether a facility is feasible and in the public interest, and that a wind energy resource exists. Indeed many feasible wind projects have been constructed in New York without requiring such intrusive disclosures. Article 10 applicants participating in a competitive marketplace, who are not regulated monopoly utilities, and who do not have the ability to exert market power should not be required to provide capital costs. Wind developers should not be required to disclose proprietary meteorological data. Requested Modification: Sections 1001.6(d) should be stricken or modified to require only a summary of wind meteorological analysis procedures used to demonstrate an adequate characterization of the wind condition supporting the estimated capacity factor." Section 1001.14 should be stricken, or should exempt nonutility applicants from submitting confidential or proprietary cost information.

Section 1001.31(e) Should Not Conflict With PSL 168(3)(e) or Previous Siting Decisions in New York, and the Regulations Should Not Restrict the Siting Boards Granted Authority Over Unreasonably Burdensome Local Laws. Public Service Law 168(3)(e) provides an established standard for overriding local laws that is very similar to the standard in previous Article X legislation for which Siting Board precedent exists. Under Article 10, the Siting Board may elect not to apply any local law that is unreasonably burdensome in view of the existing technology or the needs of or costs to ratepayers. However, the proposed regulations interpret that standard in a way that varies so significantly from the legislation as to change its nature, and limit the Boards statutory authority. The Siting Board should rely on its granted authority. The Article 10 legislation establishes the standards for project approval. Once a project meets these standards there should be a low threshold for showing that local laws, which impose additional requirements, are unreasonably burdensome. This is especially true in New York, where numerous wind projects have been approved (some by the Public Service Commission) pursuant to a fairly uniform set of siting standards. Moreover, PSL 168(3) allows an applicant broad discretion in choosing the approach to make the case for local law override and the Siting Board has broad authority to grant the request. This flexibility is consistent with legislative intent and the historic approach for justifying an override as established under the prior Article X. However, the proposed regulations ignore these sensible precedents, adopt standards of proof regarding potential local law overrides that are precisely the opposite of those outlined in PSL 168(3)(e) and establish rigid tests and review standards that are not set forth in the law and undercut and restrict the flexibility otherwise granted to the Siting Board. The proposed regulations improperly establish local law standards, as opposed to Article 10 standards, as the assumed threshold of compliance. Regardless of whether a project as proposed is well within the standards for approval established in PSL 168(3)(a-d), the regulations would allow such project only upon a showing that the applicant could not reasonably make design changes to accommodate local standards and that the project proposal was the minimum necessary departure from local law 11 requirements no matter how onerous such local requirements might be. The Siting Board must eliminate these provisions because Article 10 requires the exact opposite analysis. A projects
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See N.Y. PSL 168(3)(a-d). See 16 N.Y.C.R.R. 1001.31(e) (proposed).

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compliance with the standards established under PSL 168(3)(a-d), not standards established in local law, is the starting point for the override analysis. As also noted above, sensible and relatively uniform precedent for Article 10 standards, especially regarding the environmental standards, have been established in the many approved, successful wind projects in New York State. The regulations should recognize this history and these relatively uniform design precedents for wind projects in New York. In this regard the regulation should provide that applicants who can demonstrate compliance with standards found acceptable at operating New York wind farms have sustained their burden of proof on the unduly burdensome issue. This would shift the burden of proof on this issue to those advocating more stringent standards. The proposed regulations establish three different tests in order to qualify for a local law override. None of these tests is set forth in the PSL and none of the proof or review standards set forth for these tests is mentioned in the PSL. Equally problematic is the fact that without any legislative authority or rationale, the regulations establish different standards of proof for each test. While some may believe that the tests as stated could be an approach for sustaining burdens of proof under PSL 168(e) the Section does not so limit the Siting Board. Accordingly, consistent with this PSL section and the approach under prior Article X, applicants should have broad latitude in making the case for local law override and the Siting Board should maintain its granted authority. As such, the required test protocols in 1001.31(e)(1-3) should be eliminated Finally the Siting Board must adopt regulations to clarify that an applicant must demonstrate consistency with local laws in effect on the date the Article 10 application is filed. Local governments could, after an application is filed, adopt local laws that are obstacles to the development of a project, effectively preempting the Siting Boards authority, and creating a moving target for applicants. In order to avoid efforts to game or delay the Article 10 review process, the Siting Board should include regulatory provisions that presume laws adopted after an application is filed are unreasonably burdensome. Requested Modification: Section 1001.31(e)(1) through (3) should be stricken. Section 1001.31(e) should be modified to eliminate justification requirements regarding a Projects non-compliance with local standards. Section 1001.31(e) should include a burden of proof provision that recognizes New York States siting precedent in evaluating whether local laws are unreasonably burdensome. Section 1001.31(e) should clarify that the Siting Board will evaluate a proposed facilitys compliance with local laws in effect on the date the application is submitted.
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The Standard for Triggering an Administrative Hearing Should be Clarified. Under the regulations, a party can force a quasi-judicial hearing upon a showing by any party participating in the proceeding that an issue or evidence is material and relevant. The more rigorous substantive and significant standard should be used instead because it is generally referenced as the trigger for 13 quasi-judicial hearings for the type of issues that will be adjudicated in these proceedings, and would ensure more efficient, focused hearings. Requested Modification: Revise Section 1000.12(2) to specify a substantive and significant standard.
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See 16 N.Y.C.R.R. 1001.31(e)(1-3) (proposed). See 6 N.Y.C.R.R. 624.4(c).

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Requirements for Exhibits 8 and 10 Should Not Exceed the Requirements of PSL 164(b)(viii), nor Conflict with or Conflate the NYISO Interconnection Process. Article 10 decision making under PSL 168 and submission requirements PSL 164(b)(viii) require concept-level analysis of electric system issues. Article 10 applicants can meet these requirements by presenting evidence showing that the New York State electric grid can reliably accept significant amounts 14 of additional wind energy generation (up to 8 GW) with no adverse reliability impact, as well as through submission of the System Reliability Impact Study required in Exhibit 5. Accordingly, the obligations of proposed Sections 1001.8, 1001.10(b) and 1001.10(e), which go beyond the requirements of Article 10, should exempt wind energy facilities, not only because it is duplicative of the NYISO interconnection process capacity resource deliverability studies are performed by NYISO as part of the Facilities Study Class Year process but because they are unnecessary, costly, and of limited utility. The regulations create the potential for conflict with the analysis performed as part of the 15 NYISO interconnection process. The requested studies require proprietary information and projections (guesses) of future prices of natural gas and coal, as well as how existing generating units bid into the market that can have dramatic effects on the outcome of the study. By contrast, the NYISO each year will study, assess and require system upgrades to ameliorate transmission system impacts based on the best available information. The NYISOs assessment should not be duplicated or contradicted in an Article 10 proceeding. It would be premature for the Siting Board to assess system reliability determinations that are properly within the province of the NYISO. The Siting Board can rely on the NYISOs assessment of the New York State electric grid impacts for a future Class Year to ensure reliability of the electricity grid. Requested Modification: The final rules should specify that completion of the NYISO interconnection process, which will be included as a compliance filing, will satisfy Sections 1001.8, 1001.10(b) and 1001.10(e).

The Regulations Should Not Impose Unnecessarily Burdensome Application Requirements. Section 1001.11(c) of the proposed regulations imposes burdensome application requirements. The stated information implies the need for final engineering, which is beyond that which is required by the 16 statute. Article 10 specifies that applicants provide conceptual engineering plans. The problem with proposed Section 1001.11(c) is that it is burdensome as applied to a wind energy developer. While the information sought may be reasonable for traditional energy developments proposed on a limited number of parcels, it is infeasible for the large acreage covered by wind energy development leases. For example, the requirement to provide initial and proposed contours requires the same type of survey that

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New York Independent System Operator, Final Report of the NYISO 2010 Wind Generation Study (Sep. 2010).
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Preparation of an SRIS requires input data that is typically proprietary or difficult to acquire. For example, it is difficult to determine which generating units are co-generation facilities with steam hosts as required by 16 N.Y.C.R.R. 1001.8(a)(8) (proposed).
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N.Y. PSL 164(b)(iv).

the draft regulations waive for the preparation of Exhibit 13. Applicants seeking approval of a wind energy project would bear significant cost to generate the requested material. The detailed design information listed in the draft of Section 1001.11(c) would, however, be provided to 18 the Department of Public Service in required compliance filings. Compliance filings must be approved and may be conditioned, so there is no risk of harm to this process, yet it is essential to provide practicality and flexibility needed for wind energy developers seeking a Certificate. The information required at the application stage should be conceptual in nature, as set out in the authorizing statute, allowing the applicant to survey and engineer the project once, based on the final approved facility. Section 1001.4(c) should clarify that the map required under this section is required to show only proposed land use plans which are fully permitted as of the date of the Article 10 application. This section and other sections regarding impact analysis should make clear that only structures that are in existence (or at a very minimum have received a valid building permit) as of the date of the Article 10 application will be considered in the review process. This language will avoid gaming or delay of the Article 10 review. Requested Modification: Clarify that Section 100.1.11(c) requires only conceptual engineering information and that Section 1001.4(c) and Article 10 review identify and take into account only structures or land use plans which are fully permitted as of the date of the Article 10 application.

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The Provisions for Modification and Revision Should Not Be Rigid, Impractical or Inconsistent with the PSL. We appreciate that Staff made amendments to the original definitions of modification and revision in order to address the minor component location adjustments that inevitably occur at wind project sites between initial design and construction. As these adjustments are generally benign, the aim should be to treat most of them as modifications (which does not implicate significant additional review) as opposed to revisions (which would trigger additional intervenor funding requirements and administrative hearings). Unfortunately, the proposed revisions may actually make things worse. The amendment addresses only turbine moves up to 500 feet that do not significantly increase impacts 19 on sensitive resources or decrease compliance with setback and similar requirements. The standard ignores adjustments other than turbine relocations, which frequently occur at projects without causing additional impacts. These can include changes in service road choice or alignment and relocation of interconnection lines, among other things. By singling out only turbine relocations under the definition of modification the amended language implies that all other moves should be treated as revisions. Indeed, the proposed regulations would treat component location changes that reduce impacts to be a revision.

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The Appendix to the Notice of Proposed Rulemaking requires Exhibit 13 to include a survey, except that for wind facilities a map may be used instead of a survey to fulfill this requirement. 16 N.Y.C.R.R. 1001.13 (proposed).
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16 N.Y.C.R.R. 1002.2(b) (proposed). 16 N.Y.C.R.R. 1000.2(x) and (ak) (proposed).

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The solution is to revise the regulatory definition of revision by deleting (at least for wind projects) the language providing that substantial changes in location automatically qualify as revisions. In this way, changes in location of project components would be treated like all other project amendments, under the definition. As a result of this change to the proposed regulations, if a change regarding the location of any project component does not significantly increase impacts or decrease compliance, it should be considered a modification. The determination of revision or modification would be based on the potential impacts of the amendment regardless of the nature of such amendment. The intervenor funding payment required for revisions is inconsistent with PSL 164(6) and must be revised. Presently, under 1000.10(b)(2), if a project change is considered a revision and subject to a new review, the applicant must pay $75,000 to the intervenor fund regardless of the nature of the revision or size of the project. For projects up to the size of 75 MW, this would mean that these projects would have more intervenor fund exposure for revisions ($75,000) than for the application ($1,000/MW). The draft regulations create this lack of parity; it is not contained in Article 10 itself, which allows the Siting Board to impose an intervenor fund payment up to $75,000, but does not require such payment 21 automatically in all instances. The Siting Board should conform the regulations to the statutory language. Additionally the regulations should provide that applicants intervenor payment exposure for a revision should not exceed its 22 application fee amount ($1000/MW). Requested Modification: Strike the 500-foot standard from the definition of Section 1000.2(x and ak). Strike the language regarding substantial changes in location in Section 1000.2(ak). Conform the intervenor funding requirements in Section 1000.10(b)(2) to the discretionary language in PSL 164(6) and cap the intervenor funding exposure for revisions in an amount that is less than the intervenor funding payment required for the original application.

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The Proposed Regulations Should Not Impose Burdensome Timing Requirements. Despite the intention to provide expeditious Article 10 certification decisions in an approximately 1-year timeframe, the proposed regulations required a much longer processing time because it requires a 523 24 month public participation review process and a 3-month pre-application process in advance of the 12month application process. The minimum 20-month timeframe set out in the proposed regulations is nearly twice as long as the 12-month process that the Notice of Proposed Rulemaking claims would 25 generally be imposed.

We note that the mandatory nature of the public involvement program (PIP) is an unexplained departure from the voluntary approach under the former Article X regulations. (See, former Article X regulations at
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16 N.Y.C.R.R. 1000.2 (ak) (proposed). N.Y. PSL 164(6)(a) (emphasis added). N.Y. PSL 164(6)(a). 16 N.Y.C.R.R. 1000.4(d) (proposed). 16 N.Y.C.R.R. 1000.5(c) (proposed). See Notice of Proposed Rulemaking, p. 2.

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16 NYCRR 1000.3). In enacting the previous regulations, the Siting Board specifically found that In a competitive environment, it is not necessary to spell out in detail the nature of the public involvement 26 process or to make staff approval mandatory. There is no basis for departing from the sensible and successful precedent set forth in former Article X. At a minimum, the PIP process should proceed in parallel with the preliminary scoping statement process. Furthermore, developing a PIP and undertaking scoping may be unnecessary for a project that has completed this process or has an accepted Draft Environmental Impact Statement (DEIS) under the State Environmental Quality Review Act (SEQRA), but is opting into the Article 10 review process. For these circumstances the regulations should allow for waiver of the PIP/scoping requirements and timeframes. Similar to the discussion above regarding local laws adopted after an application is filed, one other timing issue exists that should be clarified. The Siting Board should consider impacts only to sensitive receptors which are in existence and have all required permits as of the date of the application. This is particularly important given the lengthy Article 10 timing requirements laid out above. The process should not allow for a moving target, nor should it allow illegitimate applications to construct new receptors from being filed in response to an application. Requested Modification: The regulations should be amended to allow the timeframes and procedures set out in Sections 1000.4(d) and 1000.5(c) to be optional (or waived with justification, such as for sufficient previously established public involvement programs and/or for projects which have obtained an accepted DEIS under SEQRA). Section 1001.19(a) should clarify that the Siting Board will review and assess impacts only regarding sensitive receptors that exist or are fully permitted at the time of application.
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Conclusion Iberdrola Renewables respectfully requests careful consideration of the foregoing comments and modification of the proposed regulations to make them consistent with the Article 10 legislation and remedy problematic provisions discussed herein. For further discussion of these comments please contact me at 484-680-9085 or ethumma@iberdrolaren.com.

Sincerely,

Eric Thumma Director, Policy and Regulatory Affairs Iberdrola Renewables, LLC

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See, Case No. 97-F-0809 (12/16/97) at p. 4

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An applicant should only be required to demonstrate consistency with local laws in effect on the date the Article 10 application is filed.