Environmental Law Post

Environmental Law Post

EPA Administrator Takes Aim at Aging Superfund Sites

Posted in Superfund

Despite condoning a 34 percent cut to his agency’s funding for fiscal year 2018, U.S. EPA Administrator Scott Pruitt this week announced a seemingly ambitious plan to expedite the federal Superfund process to address the roughly 1,300 sites listed on the National Priorities List. Characterizing these sites as “languishing,” Pruitt promised that the “days of talking are over,” and that EPA would take immediate action to accelerate cleanup efforts nationwide.

Specifically, on July 25, Pruitt and the U.S. EPA Superfund Task Force released their “Recommendations to Streamline and Improve the Superfund Program.” The Report detailed 42 recommendations organized into five goals, which Pruitt believes will have the effect of expediting the remedial process and promoting reuse of contaminated sites. The high-level goals identified are: (1) expediting cleanup and remediation; (2) re-invigorating responsible party cleanup and reuse; (3) encouraging private investment; (4) promoting redevelopment and community revitalization; and (5) encouraging partners and stakeholders.

(Source: https://www.epa.gov/newsreleases/epa-announces-superfund-task-force-recommendations)

Additionally, Pruitt directed a letter to EPA Regional Administrators across the nation outlining 11 specific action items which the administrators are directed to undertake over the next year. These actions include utilizing interim response actions and removal authority more frequently to address immediate risks and prevent migration at Superfund sites, focus their attention and resources on sites with the most reuse potential, and delete or partially delete sites that meet CERCLA requirements from the National Priorities List.

(Source: https://www.epa.gov/sites/production/files/2017-07/documents/receipt_of_superfund_task_force_report_and_next_steps_for_revitalizing_the_superfund_program_memo.pdf)

Pruitt further promised to use the Agency’s resources to identify a ‘top-10’ list of Superfund sites which pose a risk to public health today, including specifically the West Lake landfill in Missouri and the USS Lead site in East Chicago, Indiana, and to become personally involved in the remediation of those ‘top-10’ Superfund sites.

While the announcement was greeted with optimism by some, it did not go unnoticed that Pruitt’s announcement placed the Superfund program at what he termed its “rightful place at the center of the agency’s core mission,” and admittedly diverted the Agency’s attention away from Obama-era efforts to fight global climate change.

The announcement also left some scratching their heads. “We have Superfund sites, but we don’t have a super fund,” Nancy Loeb, director of the Environmental Advocacy Center at Northwestern University’s Pritzker School of Law commented to the Washington Post. Because the Superfund program has not been adequately funded for years, EPA has had to rely upon polluting parties to fund cleanups, and that process tends to be slower than EPA-conducted cleanups because responsible parties mount legal and administrative challenges along the way. Pruitt played down the need for additional funding to accomplish his goals, and instead stressed the “excitement” of his team to take on the Superfund program.

Only time will tell whether Pruitt’s initiative is the much-needed reboot to the Superfund program.

(Source: https://www.washingtonpost.com/news/energy-environment/wp/2017/07/25/pruitt-says-epa-will-create-top-10-list-for-superfund-cleanup/?utm_term=.629f0440bae8)

Follow our team at Phillips Lytle as EPA’s Superfund initiative unfolds for up-to-date analysis.

NYSDEC Set to Propose Revisions to the Brownfield Cleanup Program: A Preview of Changes

Posted in Brownfield

ExcavatingmachineA preview of at least some of the proposed revisions to the New York State Department of Environmental Conservation’s (“NYSDEC”) regulations for the Brownfield Cleanup Program (“BCP”) (6 N.Y.C.R.R. Part 375) was revealed in May 2017, with official release anticipated later this year. Key changes are expected to include new program and tax credit eligibility requirements as well as clarifications to aspects of program implementation, all in an effort to provide more consistency across remedial programs and to generally update the BCP, now over a decade old. To what extent the revisions will provide clarity to BCP applicants remains to be seen once the changes are officially published. However, the preview reveals there is likely to be more questions and concerns than answers.

New eligibility requirements will likely include a formalized obligation for BCP applicants to conduct a search for potentially responsible parties (“PRPs”) before the application will be deemed complete. The scope and extent of PRP searches are expected to be outlined in the proposed regulations and will likely warrant close review as PRP searches can be time-consuming and costly.

The revised rules may allow sites listed as Class 2 on the NYSDEC’s Registry of Inactive Hazardous Waste Sites to be eligible if the site is owned by a volunteer and no viable PRP is found, a change from the current regime which deems Class 2 sites ineligible. Class 1 sites would remain ineligible under the revisions.

Other new requirements are expected to include formalization of the tangible property credit (“TPC”) as related to the source of contamination, such that if contamination is entering the site from an off-site source, TPC would not be available. TPC eligibility will also require a demonstration of economic hardship for sites in cities with a population of one million or more.

New deadlines are likely to be imposed for execution and recording of environmental easements. While previously the regulations contained no set timeframe, the NYSDEC intends to propose new rules that sites with institutional or engineering controls will be required to execute an environmental easement within 180 days of the commencement of the remedial design or at least three months prior to the anticipated date of the Certificate of Completion (“COC”).

A number of areas that have previously been the subject of uncertainty and debate are expected to be “clarified,” including waivers for environmental permits, the factors used to determine if the application will serve the public interest, transfer of COCs to successors-in-interest of the real property, mitigation of off-site impacts, contamination levels for eligibility purposes, contents of reports, and the NYSDEC’s authority to execute “cash out” consent orders.

While the cleanup tracks will generally remain the same, the NYSDEC may propose a “conditional Track 1” for volunteers that use long-term institutional or engineering controls for groundwater contamination, such that the volunteer will first receive a Track 2 cleanup, and if groundwater levels reach asymptotic levels within five years, then a Track 1 COC would be issued. However, that change would conflict with the clear statutory definition of Track 1 in Article 27 of the Environmental Conservation Law, which permits volunteers to qualify for Track 1 under these same circumstances without showing five years of asymptotic levels – certainly a change to look out for when the revisions are formally proposed.

Once the proposed revisions are published in the New York State Register, the minimum 45-day public comment period will commence to allow stakeholders to weigh in on the proposed changes. The NYSDEC anticipates at least two public hearings will be held as well as webinars to explain the proposed revisions and anticipated timeline. While the changes may provide more certainty in some respects, a close review will be warranted to evaluate the potential impact to new and existing projects to ensure that the program continues to drive redevelopment and sustainable economic growth across the state.

Significant Changes Proposed for NYSDEC’s SEQRA Regulations

Posted in Legislation

Four years after beginning the process, the New York State Department of Environmental Conservation (“NYSDEC”) issued its proposed amendments to the New York State Environmental Quality Review Act (“SEQRA”) regulations (“SEQRA Regulations”). According to NYSDEC, the “principal purpose of the amendments is to streamline the SEQR[A] process without sacrificing meaningful environmental review.”

For many, the most notable proposed amendments to the SEQRA Regulations include revisions to the lists of Type I and Type II actions. Those revisions reduce certain Type I action thresholds, which may require agencies to render Type I action determinations that previously may have been considered Unlisted or Type II. For Type I actions, an applicant must submit a full environmental assessment form, and an agency must perform a coordinated environmental review; in addition, they are most likely to require an environmental impact statement. Unlisted actions only require a short environmental assessment form and an uncoordinated environmental review, while Type II actions are not subject to SEQRA’s environmental review.

In contrast, however, NYSDEC is proposing to increase the list of Type II actions, particularly for projects that align with New York State’s environmental and energy policy goals. Examples of actions that would be considered Type II under the proposed amendments include (1) retrofitting an existing structure or facility to incorporate green infrastructure, (2) installing fiber-optic or other broadband cable technology in existing highway or utility rights of way, and (3) installing five megawatts or less of solar energy arrays on certain properties or structures. The proposed amendments to the lists of Type I and Type II actions are likely to impact many applicants and agencies.

NYSDEC is accepting comments on the proposed amendments until close of business on May 19, 2017. As a result, agencies such as IDAs, developers and applicants should analyze the proposed amendments to the SEQRA regulations, and consider whether it may be appropriate to submit comments to NYSDEC.

New York PSC Opens Evidentiary Hearing on ESCO Markets

Posted in Energy

Lightbulb-evolutionConsiders Full-scale Regulation, Tariffs and Voiding Existing Contracts

On December 2, 2016, the New York Public Service Commission issued a Notice of Evidentiary and Collaborative Tracks and Deadline for Initial Testimony and Exhibits, which initiates a new round in the agency’s regulatory investigation of New York’s retail energy markets. The proceeding will examine measures that may be taken to ensure customers are receiving “valuable services and paying just and reasonable rates for commodity and other services” from Energy Service Companies (ESCOs). In its notice, the Commission reiterated its determination (from 2014) that the retail markets serving mass-market customers “are not providing sufficient competition or innovation.” The Commission will consider three broad questions:

  1. Whether ESCOs should be completely prohibited from selling their current products to mass-market customers;
  2. Whether the regulatory regime, rules and Uniform Business Practices applicable to ESCOs need to be modified to implement such a prohibition, to provide additional guidance as to acceptable rates and practices of ESCOs, or to create enforcement mechanisms to deter customer abuses and overcharging, including whether ESCOs should be subject to Article 4 of the Public Service Law, and
  3. Whether new ESCO rules and products can be developed that would provide sufficient real value to mass-market customers in the future in a manner that would ensure just and reasonable rates.

“Track I” of this proceeding will consider the first two measures through an evidentiary hearing before the Commission followed by the filing of post-hearing briefs. “Track II” will consider the third measure, which will include a series of collaborative stakeholder meetings and the opportunity to comment prior to Commission action. It is expected that Commission Staff, ESCOs, regulated utilities, and consumer groups will provide testimony and exhibits throughout this process. A PSC “Statement,” issued in conjunction with the Notice, stated that the hearings “will give ESCOs the opportunity to explain their pricing practices and to hear from consumers who have been harmed by these practices.”

The Commission provided a total of twenty topics that it expects parties to address throughout their Track I testimony and exhibits. Those topics relate to the general structure of the ESCO markets, including, among others:

  • Whether the “regulatory regime of how the Commission applies the Public Service Law to ESCOs should be modified . . .?”
  • Whether and how the Commission’s key 1997 interpretation that Public Service Law (PSL) Article 4 does not apply to ESCOs should be revisited?
  • Whether penalties can be applied under its current interpretation of PSL Article 4?
  • If Article 4 regulation is necessary, what burdens would be imposed on ESCOs—such as whether stock issuances or transfers/sales would require commission approval? (These are burdensome requirements that typically apply to entities regulated by PSL Article 4, such as utilities or merchant power plants).
  • Should ESCOs be required to file tariffs?
  • Whether “the Commission should take steps to void existing ESCO contracts” if tariffs are required?
  • Whether the requirements of Public Service Law Article 6 should be applied to ESCOs? (Article 6 includes, among other things, authority for control of holding companies and transactions between affiliated transactions, as well as authority for refunds, reparations, and temporary rates) (The bulk of Article 6 is used to protect captive utility customers from financial manipulation or unwise financial decisions).
  • Whether ESCOs should be required to obtain Certificates of Public Convenience and Necessity under Public Service Law Section 68?
  • Whether door-to-door and outbound telemarketing practices should be prohibited?
  • Evidence that an ESCO has, in fact, in recent years offered or is currently offering lower prices on an annual basis compared to the incumbent utility consistently (and evidence that the price offering was profitable or resulted in a loss)
  • The Commission is also requesting extensive and detailed data for 2014, 2015 and 2016:
  • prices charged for retail electric and gas to mass-market ESCO customers (including prices for comparable default service), and prices for different product offerings (fixed vs. variable). Prices are to be provided on an annual, seasonal and monthly basis where possible, and separated by residential and small commercial;
  • number of ESCO customers served;
  • volume of sales; and
  • extensive complaint data.

The Notice states that “[a]ll parties to the proceedings may be subject to discovery regarding Track I issues.”

The Commission, apparently, intends this process to provide the administrative record that the New York Supreme Court found lacking in the Reset Order litigation earlier this year. As indicated by its Statement, the Commission believes that doing so will lead to a retail market that provides “useful, value-added, economical services to New York consumers particularly as part of [its] efforts under Reforming the Energy Vision.”

Phillips Lytle’s Energy Practice Team has extensive expertise in Public Service Commission/Utility regulatory matters, including all aspects of retail energy regulation in New York. For more information about Phillips Lytle’s Public Service Commission practice, contact: Thomas F. Puchner, Partner, (518) 472-1224 Ext. 1245, tpuchner@phillipslytle.com.

New York Public Service Commission Clarifies REC and ZEC Obligations

Posted in Energy

LSE Obligation Deadlines ApproachEnergySourcesing

In August 2016, the Public Service Commission (“Commission”) issued the Clean Energy Standard Order to set the framework for accomplishing two goals: achieving 50 percent renewable generation by 2030 and preserving the economic viability of three zero-emissions nuclear power plants as a bridge to the clean energy future. To meet the first goal, the Commission directed each Load Serving Entity (“LSE”) to purchase Renewable Energy Credits (“RECs”) from new renewable sources built after January 1, 2015. LSE’s are required to meet their obligations in one of three ways: (1) by purchasing RECs from the New York State Energy Research and Development Authority (“NYSERDA”), (2) purchasing RECs from other eligible sources, or (3) making Alternative Compliance Payments (“ACPs”) to NYSERDA.

In order to maintain the economic viability (and operation) of New York’s upstate nuclear plants as a bridge to a low-carbon future, the Commission also established a Zero Emissions Credit (“ZEC”) program to subsidize the nuclear fleet, which is struggling to compete against low-cost gas generation. The ZEC program is structured similarly to the REC program, requiring LSEs to purchase ZECs, which recognize the zero-emissions attributes of nuclear power, proportionate to their annual energy sales. NYSERDA will contract with each eligible nuclear plant for ZECs, and each LSE will be required to purchase its pro rata share.

On November 17, 2016, the Commission issued an Order Providing Clarification regarding the LSE’s REC obligations. The Commission will require each LSE to procure a quantity of RECs equal to 0.035% of the LSE’s total 2017 load. The Commission’s order clarifies that the 0.035% target mandate relates only to the estimated number of RECs from renewable energy projects that were not in operation prior to January 1, 2015 that will be available to NYSERDA for sale to LSE’s during 2017. Based on that calculation, NYSERDA will offer 56,142 MWh of RECs for 2017 compliance at a price of $21.16/MWh. If a LSE intends to purchase RECs from NYSERDA during the 2017 compliance period, it must inform NYSERDA by December 1, 2016 and compete the REC request form using the confirmation ID supplied by NYSERDA.

Also on November 17, 2016, the Commission issued an Order Approving Administrative Cost Recovery, Standardized Agreements and Backstop Principles. The order established the system through which RECs and ZECs will be bought and sold. NYSERDA will build a purchase and sale platform and will enter into contractual relationships with each LSE to provide monthly REC and ZEC payments. The order also approved standardized REC and ZEC contracts established in the appendix. Each LSE must provide NYSERDA with executed agreements by December 17, 2016. Each LSE is also required to register an account in the New York Generation Attribute Tracking System (“NYGATS”) in order to transact RECs and ZECs, receive communications, and generate compliance reports for each annual compliance period.

With each LSE purchasing RECs and ZECs in the NYSERDA platform, the Commission hopes to move toward a 50 percent renewable generation goal while subsidizing nuclear base-load generation to avoid sharp increases in carbon emissions that could fill the generation gap if nuclear exited the market in the short term. In support of the Clean Energy Standard Order, the Commission recently approved the $110 million sale of the FitzPatrick nuclear power plant from Entergy to Exelon Corporation. While the 830 MW plant was scheduled to close due to low natural gas prices undercutting its competitiveness in the market, the Commission approved state subsidies (funded primarily via the sale of ZECs) and the sale to Exelon in order to keep the plant operational as a bridge until more renewable energy capacity is constructed. State approval is only the first step. Before the sale is finalized it must also be approved by the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission.

NY DPS Staff Report on Value of DER

Posted in Energy

solarhouseThe New York Department of Public Service Staff released a complex report of recommendations to the New York Public Service Commission on how to properly value distributed energy resources (“DERs”) as the state transitions away from net energy metering (“NEM”). Reforms to NEM—which credits distributed generation at the retail rate of electricity—have been a controversial topic in numerous states as utilities warn of revenue losses and customer cross-subsidies caused by outdated rate designs that do not properly calculate the costs and benefits of NEM to the grid.

As many states continue to quibble over the details and fairness of NEM, New York’s Reforming the Energy Vision (“REV”) proceeding recognizes the broader forces reshaping the power sector and attempts to modernize the ill-equipped, industrial-age regulatory model. One of the key pieces to that modernization puzzle is creating a comprehensive framework for valuing DER, including energy efficiency, demand response, distributed storage and distributed generation, all of which will become integral tools in the operation of the modern electric grid. This Staff report marks a major milestone in the creation of that value framework.

The report proposes to replace NEM with its “Phase One” tariff by the end of 2016, which will ultimately be replaced by a “Phase Two” methodology in 2018. The report notes that while NEM has provided a simple and easy-to-understand compensation mechanism, it is an “imprecise and incomplete signal of the full value and costs of DER.” More precise price signals will be required in order for the NY REV model to replace the outdated regulatory model and create a system where customers and third parties make choices about how to use power and invest in DERs. The report proposes to gradually transition New York away from NEM, grandfathering current NEM customers into that compensation policy for the next 20 years and allowing new behind-the-meter customers to continue using the NEM framework until 2020, at which point the credits would gradually decline until they ultimately merge with the value of DER formula adopted by the Commission.

To replace the NEM formula, the Staff report outlines a value stack consisting of four primary benefits that DERs can provide and assigns a value formula to calculate each benefit. Those benefits fall into four categories: (1) energy (electricity generation); (2) capacity (availability of the system to provide electricity during peak demand); (3) distribution system value (deferment of infrastructure upgrades); and (4) environmental and public health.

Importantly, the report adopts monetary crediting as opposed to volumetric crediting. While volumetric crediting accounts for only the volume of electricity generated, monetary crediting provides a more complete value because it accounts for additional metrics, such as the location and time at which the electricity is generated.

While the energy value is fairly straightforward, there could be debate around the capacity value and environmental value. Calculating a capacity value for intermittent resources is inherently difficult for certain DER resources due to uncontrollable events such as clouds and wind patterns. Part of that formula could be tied to the variability of intermittent resources, but that would present issues for securing project finance. Solar advocates will certainly want to be a part of that discussion to ensure the Commission reaches the proper balance.

The report recommends crediting DER for its environmental value that is at least as high as the Social Cost of Carbon as defined by the EPA, or higher as reflected in Tier 1 REC prices established by the New York State Energy Research and Development Authority (“NYSERDA”). NYSERDA expects to publish the quantity and price of Tier 1 RECs for 2017 compliance in November 2016.

One major component of the value stack that the report did not address is the value of DERs to the local distribution grid. In the absence of detailed distribution-level data, the report recommends a Market Transition Credit (“MTC”) which recognizes that such a value exists, but its exact numerical value is unknown. Determining the value of DER to the distribution system will be a key task of the Commission as it works on a Phase Two methodology, which is expected by 2018.

In its final iteration, the value stack for DER may prove to be more of an art than a science. As U.S. Supreme Court Justice Stephen Breyer once wrote in Regulation and its Reform, “To spend hours of hearing time considering ‘rate of return’ models is of doubtful value; and suggestions of a proper rate – carried out to several decimal places – give an air of precision that must be false.”

If successful, New York’s innovative approach to valuing the costs and benefits of DERs to the grid could spark discussions in other states around how to modify NEM policies. Meanwhile, stakeholders in New York will begin to dissect this report and draft comments to ensure their products and services are valued appropriately in the Commission’s expected order in December.

New York’s Clean Energy Standard and its Impact on the State’s Energy Portfolio

Posted in Legislation

The New York State Public Service Commission (“PSC”) recently issued an order that will shape New York’s energy portfolio for years to come. The Clean Energy Standard (“CES”), issued and effective August 1, 2016, is a bold initiative that mandates renewable energy supply 50 percent of the State’s electricity needs by 2030. New York seeks to achieve this goal by focusing on three major areas: (1) large utility scale solar, wind and other renewables; (2) offshore wind; and (3) subsidized nuclear power. The expectation is that by 2030, New York greenhouse gas emissions will be reduced by 40 percent from 1990 levels.

Currently, New York generates about 23 percent of its electricity from renewable resources, but about 80 percent of that comes from hydroelectric. This means that solar, wind and non-hydro renewables account for only five percent of New York’s current electricity requirements.

In order to meet these ambitious goals, solar and wind generation will have to substantially increase. The State believes that there is a lot of potential in offshore wind in the Atlantic Ocean, and the CES sets out a path to developing this resource. The Deepwater Wind Project, off the coast of Montauk, Long Island, is currently going through the regulatory approval process with support from the State. The State hopes that this 90 megawatt wind farm is only the beginning of tapping into offshore wind potential. It is unclear what role offshore wind in the Great Lakes will play, and whether or not it will receive the same State support.

The plan to subsidize nuclear power is somewhat surprising given Governor Andrew Cuomo’s historic position on nuclear energy… Most notably, Cuomo has called for the permanent shutdown of Indian Point Energy Center, a nuclear power plant about thirty miles north of Manhattan. In marked contrast, the State is planning on entering into long-term subsidized contracts with two “at risk” nuclear power plants in upstate New York. Although these plants are no longer competitive in the New York market due to their high operation and maintenance costs, the fear of losing up to 17 percent of the State’s “clean” energy from nuclear power has made the nuclear subsidies a key component in reaching the 2030 Renewable Energy Standard (“RES”).

The CES order reinforces the Governor’s opposition to natural gas – as the resource that many considered to be the bridge between today and 2030. Governor Cuomo banned high volume hydraulic fracturing in New York in December of 2014. Doubling down in April of this year, the Cuomo administration denied necessary water quality permits for the federally approved Constitution Pipeline which proposes to deliver Marcellus formation natural gas from Pennsylvania to New York and other northeast markets.

The CES sets lofty goals in a relatively short amount of time and will have significant impacts on energy generators and customers. The CES requires utilities and retail energy service providers to build new renewable facilities, enter into purchase agreements with other renewable energy generators, or otherwise purchase Renewable Energy Certificates to meet the new RES. Whether the “50 by 30” goal can be met, and the economic impacts absorbed, remains to be seen.

Additional Assistance
Phillips Lytle Partner, David P. Flynn, was assisted in the preparation of this article by Luke Donigan.

For assistance regarding New York’s Clean Energy Standard, please contact David P. Flynn at (716) 847-5473, dflynn@phillipslytle.com, or any of the attorneys on our Energy Industry Practice Team.

Reset of New York Toxic Tort Statute of Limitations Signed into Law

Posted in Legislation

On June 23, 2016, we wrote about legislation that had passed both the New York State Assembly and New York State Senate that would allow people to bring a timely personal injury claim arising from claimed exposure to contaminants within three years of a site’s designation as either a Federal or New York State Superfund Site.

On July 21, 2016, Governor Andrew Cuomo signed this legislation into law as Chapter 128 of the laws of 2016.

As we previously mentioned, this new law could create an incentive for the New York State Department of Environmental Conservation to be more aggressive in the listing of new sites. Also, as every new Superfund Site designation in New York now opens up the possibility of previously time-barred suits becoming viable, a PRP’s response strategy to known or suspected contaminated sites will be as important as ever.

Maximum Civil Penalties for Environmental Violations Set to Dramatically Increase

Posted in Legislation

CA-2016-07-19Through an interim final rule effective August 1, 2016, the U. S. Environmental Protection Agency (“EPA”) is increasing the maximum daily penalties it may assess for environmental violations that occurred any time after November 2, 2015. Any violation of an environmental statute enforced by the EPA, i.e., Clean Water Act, Clean Air Act, TSCA, RCRA, CERCLA and EPCRA, may now have a penalty that is up to 150 percent higher than the previous daily maximum. For example, a Class I violation of EPCRA carries a statutory maximum penalty of $25,000 under 42 U.S.C. 11045(a). Now, the maximum daily civil penalty for that violation is $53,907.

The increase in maximum penalties is a result of the 2015 amendment to the Federal Civil Penalties Inflation Adjustment Act of 1990 (the “Act”). The amendment requires federal agencies to adjust their civil penalties with an initial one-time “catch-up” adjustment so that the new maximums will take effect by August 1, 2016. Beginning January 15, 2017, agencies will also be required to make annual, rather than quadrennial, adjustments for inflation. The adjustment is calculated by multiplying the originally enacted maximum penalty amount, or the amount last adjusted by statute, by the difference between the Consumer Price Index for all Urban Consumers (“CPI-U”) during the month of October 2015 and the CPI-U for the month of October during the year that the penalty was enacted or last adjusted. The Act does provide, however, that the “catch-up” adjustment shall not exceed 150 percent of the penalty that was in effect on November 2, 2015. If the adjustment exceeds 150 percent, then the 150 percent value will be the new maximum penalty. The results of the EPA’s calculations and new maximum daily penalties can be found in Table 2 of 40 C.F.R. Section 19.4: Civil Monetary Penalty Inflation Adjustments.

This maximum daily penalty increase will undoubtedly impact settlement negotiations, and resolving alleged environmental violations with the EPA will become even more costly and potentially more contested and time-consuming. The EPA suggests that the new rule will not necessarily change the civil penalties that it chooses to impose, but nevertheless will have the overall impact of making environmental violations more costly and challenging to defend and resolve. Furthermore, state agencies responsible for environmental enforcement may now choose to increase their own maximum penalties to keep pace with the EPA. The potential for substantially higher maximum daily penalties may also cause the EPA to reevaluate how it chooses to enforce environmental statutes, and the agency will certainly have more bargaining power when it comes to assessing penalties.

Additional Assistance
Phillips Lytle Partner, David P. Flynn, was assisted in the preparation of this article by Luke Donigan.

For assistance regarding maximum civil penalties for environmental violations, please contact David P. Flynn at (716) 847-5473, dflynn@phillipslytle.com, or any of the attorneys on our Environment Practice Team.

NYSDEC Requests Information About PFCs

Posted in Superfund

Phillips Lytle Environment Client Alert June 2016By two letters dated June 14, 2016, the New York State Department of Environmental Conservation (“NYSDEC”) initiated two information requests to businesses across the State to identify the use of certain perfluorinated compounds (“PFCs”). The letters were sent to chemical bulk storage facilities, petroleum bulk storage facilities, major oil storage facilities, fire departments and airports. NYSDEC added certain PFCs to New York’s list of hazardous substances by emergency regulations on January 27, 2016, and added other PFCs on April 25, 2016. Final rulemaking regulating these substances is ongoing, with the public comment period closing July 8, 2016.

One of NYSDEC’s letters requires completion of a survey to identify the use, storage, manufacture, release or disposal of PFCs. The second letter focuses on users of PFCs in connection with fire suppression foams, informs users of new registration, storage, use and disposal requirements, and also surveys past usage of foams to identify possible soil or groundwater contamination. The goal of these letters is to collect information from businesses across the State about the use of PFCs, the phase-in of requirements leading to a permanent prohibition of PFC releases, and to identify facilities and other sites where PFCs have caused environmental contamination. NYSDEC is clearly focusing on businesses where PFCs were either manufactured, used to make other products, released or disposed of.

If you receive one or both of NYSDEC’s letters, be mindful of the importance of determining how the new PFC regulations and NYSDEC’s information requests may impact your business. Care must be taken in considering responses to NYSDEC inquiries. Information requests of this kind often have a long-term horizon in NYSDEC evaluation and use, and may lead to further requests for information or subject sites to environmental investigation and/or remediation. In fact, many businesses are still dealing with the fall-out from responding to similar surveys in the 1980s.

Additional Assistance
For assistance regarding NYSDEC information requests, please contact Morgan G. Graham at (716) 847-7070, mgraham@phillipslytle.com, David P. Flynn at (716) 847-5473, dflynn@phillipslytle.com, or any of the attorneys on our Environment Practice Team.