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Iberdrola comment letter to NYS, PSC ~ RE: Article 10

Iberdrola comment letter to NYS, PSC ~ RE: Article 10

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Iberdrola submits comments to NYS ,PSC
Iberdrola submits comments to NYS ,PSC

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07/08/2013

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April 25, 2012VIA First Class Mail and Email (secretary@dps.ny.gov)Hon. Jaclyn A. BrillingSecretary, New York State Public Service CommissionThree Empire State PlazaAlbany, New York 12223-1350Re: Case 12-F-0036
 –
In the Matter of the Rules and Regulations of the Board on Electric GenerationSiting and the Environment, contained in 16 NYCRR, Chapter X, Certification of Major ElectricGenerating FacilitiesDear Secretary Brilling:Iberdrola Renewables submits the following comments in the above referenced rulemaking proceeding.
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 Iberdrola Renewables is a part of Iberdrola S.A., an energy pioneer with the largest renewable asset baseof 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 morethan 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 havecreated employment, tax revenues and positive economic impacts in every region of the U.S. In NewYork State, Iberdrola Renewables owns and operates the 74MW Hardscrabble Wind Farm in HerkimerCounty and the 321MW Maple Ridge Wind Farm with our joint venture partner, EDP Renewables in LewisCounty. In addition, we currently have more than 500MW under development in New York. Based onthis 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 proposedregulations that represent improvement. It is clear that Staff endeavored to improve the noiseassessment requirements and to accommodate the unique physical aspects of wind energy development,which affects only a small percentage (typically less than 3%) of
a project’s
total leased land. Unlikefossil fuel proposals with smaller project areas, wind projects often require fine tuning of the physicallayout during the final engineering phase.
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Case 12-F-0036 - Draft Memorandum and Resolution Initiating Promulgation Process for ProposedArticle 10 Regulations and adopting Notice of Proposed Rulemaking, State of New York Board on ElectricGeneration Siting and the Environment (March 23, 2012) (referred to hereinafter as Notice of ProposedRulemaking).
 
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With the reduction of the regulatory threshold to 25 MW under Article 10, the Siting Board will decide howthe State will meet its policy objectives. The State is already behind schedule for meeting its renewableenergy objective of achieving 30% renewable supply by 2015,
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and will require substantially more newgeneration to come on line if these goals are to be met in the next three years. Additionally, Governor
Cuomo’s “New York Open for Business” program and the related and recently announced “New York
Energy High
way” initiative also will rely
on the investment and economic benefits that renewable energyprojects can bring to the State. As such, in order to achieve these policy goals, the Article 10 regulationsmust facilitate responsible review that avoids unnecessary delay and avoids unduly burdensome reviewrequirements.Despite positive improvements to the earlier draft of the proposed regulations, several criticalamendments are still necessary. Certain application requirements defined in the regulations are contraryto Article 10 and/or seek information that is in some cases burdensome and in others represents the mosthighly confidential and proprietary information held by wind energy developers. The confidentiality of thisinformation is essential to success in a competitive market. Iberdrola Renewables does not believe thisinformation is necessary to make the findings required by Public Service Law (PSL) § 168. Werespectfully 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 orMeteorological Data.Iberdrola Renewables objects to the requirement of Section 1001.14 to provide a detailed estimate of thetotal capital costs of the proposed facility, and to the requirement to provide cost estimate work papers toany party or to the Department of Public Service. We note that nothing in the application requirementsdetailed in PSL §164 mentions or requires submission of information regarding costs. Indeed, thelegislature specifically deleted the language requiring the submission of cost information contained in theformer Article X.
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 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 anapplicant to submit cost information in certain instances, only required submission of
estimated 
costinformation,
4
and participants in the competitive market were exempt from even providing estimated costinformation.
5
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 PortfolioStandard,
 
Order Regarding Retail Renewable Portfolio Standard (Sep. 24, 2004).
3
See
former 
N.Y. PSL § 164(d). The expired Article X required estimated cost information for facilitiesnot selected pursuant to an approved procurement process, but the current legislation contains no suchrequirement.
4
 
See
former 
N.Y. PSL § 164(d), and
former 
16 NYCRR
 
§ 1001.4 (emphasis added).
5
 
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 strategythat 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
 
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particularly in light of the fact that it is not authorized by the legislation, and it is not required to make anyof the Siting Board
’s 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 acompany like Iberdrola Renewables, which has built a business model that includes turbine inventoriesand market plays, proprietary cost forecasting, and industry-specific expertise, a requirement to reveal itsformula for success would be an unjustified intrusion. For energy developers operating in the competitivesupply markets, detailed cost information is highly confidential, trade secret information that cannot bedisclosed to the public, competitors or third parties.The wind data required by proposed Section 1001.6(d) is proprietary. The data itself does notdemonstrate that adequate wind conditions exist, the demonstration comes from the analysis. Anapplicant 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 ofInformation Law (FOIL) or a protective order under the Department of Public Service (DPS) FOILimplementation regulations,
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however, these protections are insufficient. Agencies “may deny access” to
trade secret information, but are not required to protect such information.
7
While FOIL contains somelimited trade secret protections, the primary purpose is to provide access to government records and areviewing court insensitive to the trade secrets of a wind energy company may be predisposed todisclosure. FOIL is subject to change that may reduce or eliminate protections to the extent they doexist.
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 Access to the company’s confidential information, be it by accident, by agency determination that
the information should not be protected, by legislation or otherwise would cause extreme unacceptableeconomic 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 notguaranteed. 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
examiner “may, if needed, provide for sharing of such information.”
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 Iberdrola Renewables cannot underemphasize the highly proprietary nature of its calculations of capitalcost and meteorological data. These data represent the most sensitive, proprietary and highlyconfidential information held by our company. It is never divulged to anyone who is not a financial partnerwho has signed a non-disclosure agreement, who has agreed to significant indemnification provisionsand who has the ability to satisfy such indemnifications. Even under such circumstances, the informationwould only be disclosed on a need-to-know basis. None of these conditions are satisfied under theproposed regulations; thus disclosure would be unacceptable to Iberdrola Renewables.the Electricity Supply Market is an Approved Procurement Process Reasonably Consistent with the 2002State Energy Plan, Declaratory Ruling Concerning Approved Procurement Process (Oct. 24, 2002).
6
16 N.Y.C.R.R. Part 6.
7
N.Y. POL § 87(2)(d).
8
Indeed, a recent recommendation to modify FOIL would require commercial enterprises to periodicallyrenew 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 indisclosure would be unacceptable.
 
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Notice of Proposed Rulemaking, pp. 10-11.

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