IN RE NEWARK ENERGY CENTER PROPOSED AIR POLLUTION CONTROLOPERATING PERMIT MODIFICATION(NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION) ( 2017 )


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  •                      NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
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    parties in the case and its use in other cases is limited. R. 1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-5794-14T1
    IN RE NEWARK ENERGY CENTER
    PROPOSED AIR POLLUTION CONTROL
    OPERATING PERMIT MODIFICATION.
    Argued October 31, 2017 – Decided December 1, 2017
    Before Judges Yannotti, Carroll and Mawla.
    On appeal from New Jersey Department of
    Environmental Protection, Program Interest
    No. 08857.
    Raghu Murthy argued the cause for appellants
    Ironbound Community Corporation and New Jersey
    Environmental   Justice   Alliance    (Eastern
    Environmental Law Center, attorneys; Mr.
    Murthy and Aaron Kleinbaum, on the briefs).
    John G. Valeri, Jr. argued the cause for
    respondent Newark Energy Center (Chiesa
    Shahinian & Giantomasi, PC, attorneys; Mr.
    Valeri, on the brief).
    Jung Kim, Deputy Attorney General, argued the
    cause for respondent New Jersey Department of
    Environmental   Protection  (Christopher   S.
    Porrino, Attorney General, attorney; Melissa
    H. Raksa, Assistant Attorney General, of
    counsel; Ms. Kim, on the brief).
    PER CURIAM
    Appellants are the Ironbound Community Corporation and the
    New Jersey Environmental Justice Alliance.              They appeal from a
    decision of the New Jersey Department of Environmental Protection
    (DEP) granting an application by Newark Energy Center (NEC) to
    modify its 2012 Air Pollution Control Operating Permit.
    Appellants contend the DEP issued the modification permit
    without first requiring NEC to provide a public emergency response
    plan, a public emergency notification plan, and detailed public
    reports.     As a consequence, appellants argue the modification
    permit    violates   the   federal   Emergency   Planning   and     Community
    Right-to-Know Act of 1986 (EPCRA), 42 U.S.C.A. §§ 11001 to 11050,
    the federal Clean Air Act (CAA), 42 U.S.C.A. §§ 7401 to 7671(q),
    and the New Jersey Spill Compensation and Control Act (Spill Act),
    N.J.S.A. 58:10-23.11 to -23.24, and thus must be vacated.                 After
    reviewing the record and the applicable statutory and regulatory
    provisions, we affirm the DEP's decision to grant the modification
    permit.
    I.
    We summarize the pertinent facts.           NEC owns and operates a
    natural    gas-powered     electrical      generating    facility    in    the
    Ironbound section of Newark.         On November 1, 2012, the DEP issued
    NEC's initial air control operating permit pursuant to the CAA,
    as implemented in New Jersey by the Air Pollution Control Act
    2                              A-5794-14T1
    (APCA), N.J.S.A. 26:2C-1 to -25.2, and the regulations promulgated
    thereunder, N.J.A.C. 7:27-1.1 to -34.5.            The 2012 permit allows
    NEC to use contaminated water (gray water) obtained from the
    Passaic Valley Sewerage Commission (PVSC) in NEC's cooling tower.
    It also permits NEC to use sulfuric acid to lower the gray water's
    pH level.1    The 2012 permit limits NEC's sulfuric acid emissions
    to 10.57 tons per year.
    Pertinent to this appeal, on August 27, 2014, NEC filed an
    application for a significant modification to its 2012 operating
    permit, pursuant to N.J.A.C. 7:27-22.24.          NEC requested permission
    to increase the amount of sulfuric acid used in its cooling tower
    to sufficiently treat the gray water.              NEC indicated in its
    application that the increased use of sulfuric acid would not
    increase the facility's allowable sulfuric acid emission rate.
    In support of its application, NEC submitted information
    explaining that proper chemical treatment of the cooling water is
    essential    to   keep   system   surfaces   at    the   facility   free    of
    microbiological growth and mineral scales, and to maintain overall
    system cleanliness and efficiency.       NEC's application also advised
    that, in accordance with design specifications, the pH level of
    1
    The pH scale measures how acidic or basic a substance is. The
    pH scale ranges from 0 to 14. A pH of 7 is neutral. A pH less
    than 7 is acidic. A pH greater than 7 is basic.
    3                               A-5794-14T1
    the cooling tower water would be controlled by adding sulfuric
    acid.
    The DEP notified appellants of the proposed modification.
    Additionally, NEC provided appellants with information concerning
    its facility and the chemicals used there, and responded to
    appellants' questions at an October 16, 2014 meeting.              The DEP
    also invited appellants to a meeting to discuss any issues raised
    by NEC's pending application.
    On December 16, 2014, the DEP published notice on its website
    of its intent to approve the proposed significant modification to
    NEC's    permit.   The   notice   stated   that   a   public   hearing   was
    scheduled for February 3, 2015, and public comments were due by
    February 6, 2015.        The DEP directly notified petitioners, the
    United    States   Environmental     Protection       Agency   (EPA),    and
    neighboring states about the pending permit application and public
    comment period.
    The DEP held the public hearing as scheduled, pursuant to
    N.J.A.C. 7:27-22.11(a)(2) and -22.11(f).          At the hearing, the DEP
    explained its purpose was to "seek public comments on proposed
    departmental actions modifying the [NEC] air pollution control
    operating permit."       The DEP further stated it was proposing to
    approve the modification based on NEC's "compliance with all
    applicable state and federal air pollution control laws and rules."
    4                              A-5794-14T1
    Public comments spanned a wide variety of topics, including
    emission increases; air quality modeling and monitoring; discharge
    prevention and containment in the event of an explosion or spill;
    and the potential danger to the Ironbound community and the
    surrounding environment.      Appellants participated in the hearing
    and submitted written comments to the DEP and EPA expressing their
    concerns about the proposed increase in the amount of chemicals
    transported, stored, and added as part of NEC's water treatment
    process.
    On July 2, 2015, the DEP issued a report responding to the
    public comments.       The DEP proposed to approve NEC's application
    to increase the annual permitted water tower chemical use limit
    and storage based on its calculations showing that emissions would
    remain unchanged even with the additional chemical use.              The DEP
    determined the additional chemicals were needed to raise the pH
    of the cooling tower water and this would not cause any increase
    to   sulfuric   acid   emissions.     It    further   noted    the   proposed
    modifications    would   require    NEC    to   continuously   monitor     the
    cooling tower water pH level; perform monthly calculations of the
    sulfuric acid emissions from the storage tank, turbines, duct
    burners, and auxiliary boiler; and monitor the total sulfuric acid
    emissions from the facility to ensure they comply with the annual
    emission cap.    In short, the DEP concluded the proposed increased
    5                                A-5794-14T1
    use of chemicals/sulfuric acid at NEC's facility would not result
    in any permitted emissions increase.
    The    DEP    also    addressed    the        public     comments      expressing
    concerns about public safety.             It noted "[t]here are many [s]tate
    and [f]ederal laws and regulations designed to protect people and
    the environment from incidents at facilities storing, handling,
    or processing hazardous chemicals," including the Spill Act and
    EPCRA.       The report explained that NEC has an approved Discharge
    Cleanup and Removal plan (DCR plan) and an approved Discharge
    Prevention, Containment and Countermeasures Plan (DPCC plan), as
    required      by    the   Discharges     of       Petroleum     and   other    Hazardous
    Substances Rules, N.J.A.C. 7:1E-1.1 to -10.4, and specifically
    N.J.A.C. 7:1E-4.2 and -4.3 (DPHS rules).                  The report further noted
    that   NEC     attempted      to   contact        the   Local    Emergency      Planning
    Committee (LEPC) to provide the DCR and DPCC plans as required by
    EPCRA.        The   DEP     explained,   however,        that    the   plans    contain
    security-sensitive information and are not generally available to
    the public, pursuant to N.J.A.C. 7:1D-3.2(b)(7).                       It noted that,
    under EPCRA, "the LEPC for Newark is responsible for establishing
    an   emergency       plan    covering    community        response      and     possible
    evacuations in the case of releases and explosions."
    The DEP issued a proposed permit action on July 7, 2015,
    signaling its intention to approve the requested modification to
    6                                  A-5794-14T1
    NEC's air pollution control operating permit.                 As mandated by the
    CAA and APCA, the DEP sent the proposed permit to the EPA for its
    review and comment.        42 U.S.C.A § 7661d; N.J.A.C. 7:27-22.12.             The
    EPA had no comments, and, after the forty-five day review period
    expired, the DEP issued the modification permit on August 24,
    2015.
    As a result of this action, NEC's 2012 permit was modified
    to: (1) include the sulfuric acid storage tank in the existing
    facility-wide       sulfuric   acid    limit       and   include    storage    tank
    emissions in the calculation to demonstrate compliance with this
    limit; (2) raise the permitted water tower chemical use limit from
    470 tons per year to 2267 tons per year; (3) add monitoring and
    record    keeping    requirements      to    the    cooling    tower   flow    rate
    limitation; and (4) add a new permit condition to regulate the pH
    of the cooling tower water.           This appeal followed.
    II.
    Appellants' primary contention on appeal is that the DEP was
    required to obtain a complete public emergency response plan,
    emergency notification plan, and detailed public reports before
    approving the modification to NEC's air control operating permit.
    They     assert     that    such   emergency        planning       documents    are
    prerequisites to approval of the modification permit pursuant to
    the Spill Act, EPCRA, and Section 112(r) of the CAA. Consequently,
    7                                 A-5794-14T1
    appellants contend the lack of compliance with these statutory
    provisions renders issuance of the modification permit void.                    In
    response, NEC and the DEP argue that the modification permit
    complies with all applicable statutes and the DEP did not abuse
    its discretion in issuing the permit.
    Appellate    review   of    an       administrative    agency's     final
    determination is limited and deferential.              In re Herrmann, 
    192 N.J. 19
    ,   27    (2007).    We   accord      "a   'strong   presumption       of
    reasonableness' to an administrative agency's exercise of its
    statutorily delegated responsibilities."             Lavezzi v. State, 
    219 N.J. 163
    , 171 (2014) (citation omitted).              A reviewing court may
    "not substitute its judgment . . . for that of [the] administrative
    agency."     In re Young, 
    202 N.J. 50
    , 70 (2010).
    Unless an agency's decision is "arbitrary, capricious, or
    unreasonable, or [] not supported by substantial credible evidence
    in the record as a whole[,]" it will be affirmed.                 Barrick v.
    State, 
    218 N.J. 247
    , 259 (2014) (quoting In re Stallworth, 
    208 N.J. 182
    , 194 (2011)).       In making this determination, a reviewing
    court must examine:
    (1) whether the agency's action violated the
    legislative policies expressed or implied in
    the act governing the agency; (2) whether the
    evidence in the record substantially supports
    the findings on which the agency's actions
    were premised; and (3) "whether in applying
    the legislative policies to the facts, the
    8                                A-5794-14T1
    agency clearly erred in reaching a conclusion
    that could not reasonably have been made on a
    showing of the relevant factors."
    [Id. at 260 (quoting In re Carter, 
    191 N.J. 474
    , 482 (2007)).]
    The burden of proving arbitrary, capricious or unreasonable action
    is upon the challenger.       See Bueno v. Bd. of Trs., 
    422 N.J. Super. 227
    , 234 (App. Div. 2011).
    An   agency's    "interpretation         of   statutes   and    regulations
    within its implementing and enforcing responsibility" is entitled
    to deference.     
    Ibid. (citation omitted); see
    also Barry v. Arrow
    Pontiac, Inc., 
    100 N.J. 57
    , 70 (1985) ("[T]he grant of authority
    to an administrative agency is to be liberally construed to enable
    the agency to accomplish the Legislature's goals."                     (citation
    omitted)).    Still, an agency's interpretation of the operative law
    must not be "plainly unreasonable."                Waksal v. Dir., Div. of
    Taxation, 
    215 N.J. 224
    , 231 (2013) (citation omitted); see also
    In   re   Agric.,    Aquacultural,        &    Horticultural        Water     Usage
    Certification Rules, 
    410 N.J. Super. 209
    , 223 (App. Div. 2009)
    ("[A]dministrative      agencies      derive        their     authority         from
    legislation, the terms of which they cannot alter, nor are they
    permitted    to   frustrate   the   legislative       purpose.").       Although
    "deference is generally given to an administrative agency charged
    with interpretation of the law, we are not bound by the agency's
    9                                     A-5794-14T1
    legal opinions."          
    Bueno, supra
    , 422 N.J. Super. at 234 (citation
    omitted); see also A.B. v. Div. of Med. Assistance & Health Servs.,
    
    407 N.J. Super. 330
    , 340 (App. Div.), certif. denied, 
    200 N.J. 210
    (2009).
    In the present case, the DEP issued the air pollution control
    operating permit to NEC pursuant to the APCA and the CAA.                         The
    APCA     authorizes       the     DEP   to    promulgate       rules     preventing,
    controlling and prohibiting air pollution throughout the State.
    N.J.S.A. 26:2C-8.         Under the APCA, "[n]o person shall construct,
    reconstruct, install, or modify equipment or control apparatus"
    except    in   accordance        with   the    APCA     and   implementing    rules.
    N.J.S.A. 26:2C-9.2(a).            Additionally, the DEP may not issue an
    operating permit or operating permit revision unless the applicant
    shows that the equipment or control apparatus will operate as the
    APCA and implementing rules intend.                N.J.S.A. 26:2C-9.2(b).
    The goal of the CAA is to "protect and enhance the quality
    of the Nation's air resources[.]" 42 U.S.C.A. § 7401(b)(1). Title
    V of the CAA requires certain stationary sources of air pollution
    to obtain operating permits.                 42 U.S.C.A. §§ 7661 to 7661(f);
    Ocean Cty. Landfill Corp. v. USEPA, 
    631 F.3d 652
    , 654 (3d Cir.
    2011).     Title V does not impose "substantive pollution-control
    requirements     .    .   .     [i]nstead,    it   is    designed   to    facilitate
    compliance and enforcement by consolidating into a single document
    10                                  A-5794-14T1
    all of [a] facility's obligations under the [CAA]."          Util. Air
    Regulatory Grp. v. EPA, __ U.S. __, ___, 
    134 S. Ct. 2427
    , 2436,
    
    189 L. Ed. 2d 372
    , 385 (2014).
    The Title V operating permit program is primarily implemented
    and enforced by the states, with federal oversight by the EPA.            In
    New Jersey, the DEP is the Title V permitting authority.             Ocean
    Cty. 
    Landfill, supra
    , 631 F.3d at 654.         The operating permit
    program includes public notice and comment requirements.      N.J.A.C.
    7:27-22.11.   After the public comment period closes and the DEP
    considers comments on the draft operating permit, it then sends
    the EPA a copy of the proposed permit, the comments received, and
    its response to those comments for the EPA's review.          N.J.A.C.
    7:27-22.12.   If the EPA does not object to the proposed permit
    within forty-five days, the DEP is then authorized to take final
    action on the application for the operating permit.        
    Ibid. Under the CAA/Title
    V/APCA framework, all "major" facilities,
    meaning those with the potential to emit certain threshold amounts
    of various pollutants, are required to obtain an operating permit.
    42 U.S.C.A. §§ 7661 to 7661(f).        NEC's facility constitutes a
    major facility, and, therefore, NEC was required to apply for a
    permit   modification.   As   noted,    NEC   sought   a   significant
    modification of its permit to allow it to use an increased amount
    of sulfuric acid in the water cooling process.
    11                                A-5794-14T1
    The DEP issued the modification permit after determining that
    the added chemicals presented no increase in emissions pollution.
    Before the public comment period began, the DEP issued a notice
    of its intent to approve the modified permit based on NEC's
    certification that it "meets all applicable requirements of the
    Federal   [CAA]   and   the   New   Jersey   [APCA]."   Following     DEP's
    "evaluation of the information included in [NEC's] application,
    and a review of [NEC's] compliance status, [the DEP] concluded
    that this [modified] permit should be approved."              After the
    required public notice and comment period ended, the DEP submitted
    the proposed permit for EPA review.          The EPA offered no comments
    or concerns, and the DEP issued the modification permit upon
    determining it complied with the APCA.
    Based on our review, we conclude there is sufficient credible
    evidence in the record to support the agency's determination.            NEC
    explained why it needed to increase the amount of sulfuric acid
    used in the treatment process, how the sulfuric acid would be used
    to raise the pH level of the gray water, and that this would not
    result in any additional acid emissions.         The modified air permit
    maintained the same allowable emission limits as the initial
    operating permit and imposed additional monitoring and record
    keeping conditions to ensure compliance.          The permit application
    process comported with all procedural and notice requirements, and
    12                             A-5794-14T1
    appellants do not contend otherwise.       Since NEC's application for
    the modification permit complied with the APCA and its implementing
    regulations, the DEP's decision to grant the permit was not
    arbitrary, capricious, or unreasonable.
    We   reject   appellants'   contention   that    the   DEP    was   also
    required to determine whether NEC was in compliance with the Spill
    Act, EPCRA, and the CAA before approving the modification permit.
    We find appellants' reliance on these additional statutory and
    regulatory provisions misplaced because they lie outside the air
    pollution control approval process.
    The Spill Act requires that facilities submit a DPCC plan and
    a DCR plan.   N.J.S.A. 58:10-23.11d2 and -23.11d3.          While the DEP
    reviews these plans to prevent discharge and provide emergency
    response plans, the Spill Act's controlling provisions fail to
    mention permitting, and do not link the Spill Act's emergency
    planning and reporting obligations to a facility's eligibility for
    a permit to operate.    Moreover, the Spill Act and its implementing
    regulations contain distinct enforcement mechanisms that provide
    for civil administrative penalties for violations, and do not
    include forfeiture or denial of a permit application.               N.J.A.C.
    7:1E-6.1 to 6.9.
    Similarly, EPCRA also fails to note a link between its
    emergency   planning   and   reporting   strictures   and   a     facility's
    13                                 A-5794-14T1
    eligibility for an operating permit.               Rather, like the Spill Act,
    EPCRA provides its own unique enforcement provisions allowing for
    citizen suits and the imposition of mandatory civil penalties upon
    entities that fail to comply with its reporting requirements.                      42
    U.S.C.A. §§ 11045 and 11046.
    Finally, appellants contend the DEP erred by issuing the
    modified permit without first requiring NEC to comply with Section
    112(r) of the CAA, also known as the Chemical Accident Prevention
    Provisions (CAPP Rules). 40 C.F.R. §§ 68.1 to .220. Specifically,
    they assert that "the 2012 Permit . . . included a condition which
    incorporated [CAA] Section 112(r) . . . [which] places the burden
    upon NEC to complete a public emergency response plan, and a public
    emergency notification plan."
    While    NEC's   initial      2012     operating    permit   required     the
    creation of a risk management plan, pursuant to Section 112(r),
    this      requirement   only    applies     if    the   facility    is   producing,
    processing, handling, or storing a chemical specifically listed
    in   40    C.F.R.   68.130     in   an   amount    above   a   certain    threshold
    quantity.      Contrary to appellants' assertion, sulfuric acid, which
    is the basis of their concern, is not a regulated substance
    14                                 A-5794-14T1
    pursuant to Section 112(r) and is not included in the list of
    regulated substances codified at 40 C.F.R. 68.130.2
    In any event, even if sulfuric acid is a regulated substance
    and the CAPP rules apply, as appellants contend, Section 112(r)
    and the CAPP rules make no mention of their bearing on permitting
    decisions.   Simply stated, while separate, independent federal and
    state laws may impose public emergency response and notification
    planning requirements upon industrial facilities such as NEC, they
    did not govern the DEP's decision to approve NEC's application to
    modify its air permit.
    Affirmed.
    2
    In their reply brief, appellants additionally argue that NEC
    stores ammonia in two tanks onsite, and that Section 112(r)
    similarly applies to ammonia.     However, an issue that is not
    addressed in a party's initial merits brief is deemed to be waived.
    See Drinker Biddle & Reath LLP v. N.J. Dept. of Law & Pub. Safety,
    
    421 N.J. Super. 489
    , 496 n.5 (App. Div. 2011); Liebling v. Garden
    State Indem., 
    337 N.J. Super. 447
    , 465-66 (App. Div.), certif.
    denied, 
    169 N.J. 606
    (2001). It is improper for a party to use a
    reply brief to raise an issue for the first time or enlarge the
    main argument. State v. Smith, 
    55 N.J. 476
    , 488, cert. denied,
    
    400 U.S. 949
    , 
    91 S. Ct. 232
    , 
    27 L. Ed. 2d 256
    (1970); L.J. Zucca,
    Inc. v. Allen Bros. Wholesale Distribs. Inc., 
    434 N.J. Super. 60
    ,
    87 (App. Div.), certif. denied, 
    218 N.J. 273
    (2014); N.J. Citizens
    Underwriting Reciprocal Exch. v. Kieran Collins, D.C., LLC, 
    399 N.J. Super. 40
    , 50 (App. Div.), certif. denied, 
    196 N.J. 344
    (2008); Borough of Berlin v. Remington & Vernick Eng'rs, 337 N.J.
    Super. 590, 595-96 (App. Div.), certif. denied, 
    168 N.J. 294
    (2001).
    15                          A-5794-14T1