Court Opinion

ID: 2750777
Source: CourtListenerOpinion
Date Created: 2014-11-13 15:06:05.667132+00
Date Added: 2024-06-11T11:26:39.560897
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: November 13, 2014                   517776
________________________________

In the Matter of ENTERGY
   NUCLEAR POWER MARKETING,
   LLC, et al.,
                    Petitioners,
      v                                     MEMORANDUM AND JUDGMENT

NEW YORK STATE PUBLIC SERVICE
   COMMISSION et al.,
                    Respondents.
________________________________

Calendar Date:   September 5, 2014

Before:   Stein, J.P., McCarthy, Egan Jr., Lynch and Clark, JJ.

                             __________

      Greenberg Traurig, LLP, Albany (William A. Hurst of
counsel) and Nixon Peabody, LLP, Albany (Andrew C. Rose of
counsel), for petitioners.

      Kimberly Harriman, Public Service Commission, Albany (John
Graham of counsel), for New York State Public Service Commission,
respondent.

      Hiscock & Barclay, LLP, Albany (George M. Pond of counsel),
for Champlain Hudson Power Express, Inc. and another,
respondents.

                             __________

Lynch, J.

      Proceeding pursuant to CPLR article 78 (initiated in this
Court pursuant to Public Service Law § 128) to review two
determinations of respondent Public Service Commission which,
among other things, granted the request of respondents Champlain
Hudson Power Express, Inc. and Champlain Hudson Power Express
                              -2-                517776

Properties, Inc. for a certificate of environmental compatibility
and public need.

      In 2010, respondents Champlain Hudson Power Express, Inc.
and Champlain Hudson Power Express Properties, Inc. (hereinafter
collectively referred to as the applicants) filed an application
for a Public Service Law article 7 certificate of environmental
compatibility and public need (hereinafter EC&PN) to construct,
operate and maintain a power transmission cable running
approximately 332 miles from a hydroelectric power facility in
Canada to Queens County. Shortly thereafter, the applicants
advised the Secretary of respondent Public Service Commission
(hereinafter the Commission) that they and certain governmental
and private entities intended to enter into confidential
settlement negotiations. Said settlement negotiations were
conducted over the course of 16 months among 30 participating
parties representing diverse interests, including petitioners.

      In February 2012, the applicants, along with several of the
parties involved in the negotiations, filed a joint proposal
settling the disputed issues in the case. Although petitioners
and other parties opposed the joint proposal, the assigned
Administrative Law Judges issued a recommendation that the
Commission adopt most of its terms and grant the applicants'
EC&PN. Petitioners and other parties thereafter formally opposed
the Administrative Law Judges' recommended decision. Ultimately,
the Commission concluded that the applicants' proposal met the
required statutory findings of Public Service Law § 126 and
granted the EC&PN on April 18, 2013.

      On May 21, 2013, petitioners filed a petition for rehearing
with the Secretary of the Commission. Finding that petitioners
failed to timely file their petition and otherwise failed to
establish good cause for their delay (see Public Service Law
§§ 22, 128 [1]; 16 NYCRR 3.7 [a]), the Commission issued a
decision denying rehearing. At the request of the applicants and
its own staff, the Commission also undertook to address the
merits of petitioners' request for rehearing and determined that,
had the petition been timely filed, rehearing would have been
denied in any event as there was no showing of error of law or
fact or new circumstances warranting a different determination
                              -3-                517776

(see 16 NYCRR 3.7 [b]). Petitioners then commenced this
proceeding in this Court pursuant to Public Service Law § 128 to
annul the Commission's determination as well as the granting of
the applicants' EC&PN.

      Initially, the filing of a petition for rehearing is
required prior to the commencement of a proceeding in this Court,
as evinced by the plain language of Public Service Law § 128 (1),
which provides that "[a]ny party aggrieved by any order issued on
an application for a certificate may apply for a rehearing under
[Public Service Law § 22] within [30] days after issuance of the
order and thereafter obtain judicial review of such order in a
proceeding as provided in this section. . . . Such proceeding
shall be initiated by the filing of a petition in such court
within [30] days after the issuance of a final order by the
[C]ommission upon the application for rehearing" (see Public
Service Law § 129; Matter of Powerline Coalition v New York State
Pub. Serv. Commn., 244 AD2d 98, 103 [1998], appeal dismissed 92
NY2d 919 [1998]). Thus, only after a petition for rehearing has
been timely filed does this Court have jurisdiction pursuant to
Public Service Law § 128 (1) to review the merits of the
Commission's underlying determination as it relates to the
issuance of the EC&PN (see Matter of Powerline Coalition v New
York State Pub. Serv. Commn., 244 AD2d at 103).

      As referenced within Public Service Law § 128 (1), Public
Service Law § 22 allows any interested person or corporation to
apply for a rehearing within 30 days after service of an order
issued by the Commission "unless the [C]ommission for good cause
shown shall otherwise direct" (accord Matter of MCI Telecom.
Corp. v Public Serv. Commn. of State of N.Y., 231 AD2d 284,
289-290 [1997]). Determining what constitutes "good cause" under
Public Service Law § 22 is within the discretion of the
Commission and, as such, its decision to deny the petition for
rehearing must not be disturbed absent an abuse of that
discretion (see id. at 290; Matter of Gross v State of N.Y. Pub.
Serv. Commn., 195 AD2d 866, 867 [1993], lv denied 82 NY2d 660
[1993]; Matter of Columbia Gas of N.Y. v Public Serv. Commn. of
State of N.Y., 118 AD2d 305, 308 [1986]).
                              -4-                517776

      Here, the Commission issued its initial order granting the
applicants' request for an EC&PN on April 18, 2013. Because the
30th day following the issuance of the order fell on a Saturday,
by operation of law the filing deadline was pushed to the
following Monday, May 20, 2013 (see General Construction Law
§ 25-a [1]). Late in the afternoon of May 20, petitioners'
counsel sent the petition for rehearing to a third-party
commercial vendor service, Registered Post (hereinafter RPost),
to be forwarded to the Secretary of the Commission as well as the
numerous other parties in the proceeding. Less than one minute
later, petitioners' counsel received an automated acknowledgment
of receipt from RPost stating: "Acknowledgment: Your message has
been sent. Rpost will send a Registered Receipt record within
two hours as your proof of delivery, content, and official time."
Without having received such official notice, however, counsel
was informed by RPost the following day that the message was
never delivered due to the high number of recipients.
Consequently, petitioners' petition for rehearing was not deemed
filed until May 21, 2013.

      Aware of the foregoing circumstances, the Commission
determined that, although it had the authority to grant an
extension upon a showing of good cause, petitioners' account of
why the petition was late did not amount to such a showing. In
our view, the Commission abused its discretion by not excusing
for "good cause" the one day delay in the filing of the petition
for rehearing. The focus here is on counsel's use of a
commercial electronic mail service, RPost, to assure
contemporaneous service upon the Commission and more than 100
parties. Counsel timely initiated service through RPost and
received a misleading acknowledgment advising that the message
had been sent. Unbeknownst to counsel, RPost withheld delivery
to ensure, as the Commission noted, that the email was not
"impermissible 'spam.'" While certainly, counsel should have
ensured that he received the registered receipt verifying that
the petition was filed or taken immediate steps to effect service
upon the Commission directly, this is, at most, an example of
"law office failure" that may readily be and should have been
excused (CPLR 2005). Clearly, the minimal delay in no way
compromised an expeditious resolution of the case, which had been
under review for four years. Moreover, since the Commission
                              -5-                517776

fully reviewed the merits of the petition for rehearing at the
request of all participants and denied the petition by finding
that petitioners failed to demonstrate an error of law or fact or
any new circumstances that warranted a different determination
(see 16 NYCRR 3.7 [b]), this Court has jurisdiction to address
the merits of the order granting the certificate (see Public
Service Law §§ 22, 128, 129).1

      We begin by recognizing that, as parties to the proceedings
at the agency level, petitioners have standing (see Matter of
Keyspan Energy Servs. v Public Serv. Commn. of State of N.Y., 295
AD2d 859, 861 [2002]). The criteria for authorizing the
construction and operation of a major utility transmission
facility are set forth in Public Service Law § 126. Under this
statute, the Commission may not grant a certificate approving an
electric transmission project unless it finds and determines (1)
the need for the facility, (2) whether the facility will achieve
the minimum adverse environmental impacts, (3) whether the
facility will be located underground and comport with the state's
long-range plan to expand the electric power grid, (4) that there
has been conformance with applicable state and local laws and
regulations, and (5) that the facility promotes the public
interest, convenience and necessity (see Public Service Law § 126
[1] [a]-[d], [f], [g]). This project involves the placement of a
high voltage, direct current transmission line extending from the
Canadian border to a converter station in Queens and, from there,
a high voltage, alternating current transmission line to the
Rainey Substation. The line will be placed underwater in Lake

    1
        We note that the procedure for judicial review is
outlined in Public Service Law § 128 (1). The statute provides,
as relevant here, that a party aggrieved by an order granting a
certificate must first file a petition for a rehearing. Once a
final order is issued on the rehearing application, that party
may seek judicial review of the underlying order granting the
certificate. What triggers judicial review is the issuance of a
final order on the rehearing petition, not whether the rehearing
petition is granted or denied. As set forth above, we have
confirmed the Commissioner's determination that petitioners did
not demonstrate a need for a rehearing.
                              -6-                517776
Champlain and the Hudson River and underground in the upland
segments.

      In their petition for a rehearing, petitioners mainly
reiterated that the Commission failed to adequately assess the
economic risk of the project to the detriment of the ratepayers,
as well as the project's adverse environmental risks,
particularly to endangered species, including the atlantic
sturgeon. As such, petitioners did not sufficiently establish
that there was an error of law or fact or new circumstances and,
therefore, rehearing was properly denied (see 16 NYCRR 3.7 [b]).
Turning to the merits of the order granting the EC&PN (see Public
Service Law § 128 [1]), we are unpersuaded by petitioners'
contentions that there is not substantial evidence in the record
to support the Commission's determination.

      Although Public Service Law § 126 does not require the
Commission to determine whether the project is economically
feasible, the record confirms that the Commission directly
addressed petitioners' economic risk concerns as part of its
needs assessment. Importantly, an applicant is only authorized
to recover the project costs through wholesale power transactions
and not through rates charged to the consumer. In fact,
certificate condition No. 15 (b) prohibits the facility from
directly receiving cost-of-service rates. Moreover, the
Commission reasonably discounted petitioners' concern that
consumers would be required to indirectly subsidize the project
should wholesale buyers pay above-market prices. The Commission
pointed out that buyers would be discouraged from entering into
such agreements for the Commission is authorized to reject the
overpayments. Moreover, whether the project is economically
feasible depends on future gas price forecasts subject to
dramatic change that no one can definitively predict, which is a
risk that the project investors must assume. From a nonmonetary
perspective, there are three uncontested aspects of the project
that validate the Commission's findings of need and public
interest. The project will increase transmission capacity to
meet New York City's heavy needs, the use of a hydropower
resource will enhance fuel diversity and reduce harmful emissions
resulting from New York City's use of oil- and gas-based
electricity sources, and these characteristics promote the 2009
                              -7-                517776
State Energy Plan and New York City's PlaNYC goals. The record
also demonstrates that the Commission seriously assessed the
probable environmental impacts of the project and determined that
the facility minimized any adverse environmental impact.

      Petitioners contend that the Commission failed to
adequately consider the potential harm to aquatic species,
including the endangered shortnose and atlantic sturgeon, posed
by the placement of cables underwater. The plan requires the
underwater cables to be buried at least six feet beneath the
lake/river bottom, except in areas of utility crossings and hard
rock. In these areas, the cable will be covered by concrete
mats. The specific risks emanate from the use of the concrete
mats as well as magnetic and electromagnetic field impact. The
record supports the Commission's determination that any risk has
been minimized by the placement of the cable route utilizing
existing habitat information designed to avoid significant
coastal fish and wildlife habitat areas designated by the
Department of State (see 19 NYCRR part 602) and the exclusion
zones identified by the parties in the joint proposal. There is
also expert record evidence supporting the Commission's
conclusion that the magnetic fields' impact on sturgeon and other
aquatic species would be minimal. Further, we agree with the
Commission's observation that the July 5, 2011 letter from the
Army Corps of Engineers addressing the cable route under Lake
Champlain and the Hudson River was a preliminary assessment.
Moreover, the certificate is conditioned on the applicants'
procurement of a construction permit from the Army Corps of
Engineers, which has jurisdiction over these navigable waterways,
prior to commencing construction.

      Finally, petitioners contend that the Commission violated
the "public trust doctrine" by approving that part of the cable
route under Stony Point State Historic Park and Rockland Lake
State Park. We first note that petitioners failed to preserve
this issue for review by omitting the contention from their
rehearing petition (see Public Service Law §§ 128, 129). In any
event, the certificate requires the applicants to obtain approval
for overland placement of the cable directly from the owners of
such property in accordance with state law. Through its
approval, the Commission did not grant the applicant permission
                              -8-                517776
to occupy state park land. Given the above, we conclude that the
record contains substantial evidence to support the Commission's
determinations (see Public Service Law § 128 [2] [b]).

     Stein, J.P., McCarthy and Egan Jr., JJ., concur.

Clark, J. (concurring).

      I disagree that law office failure applies to the matter at
hand. Public Service Law § 22 specifies that respondent Public
Service Commission (hereinafter the Commission) can provide for
acceptance of a late-filed petition upon the demonstration of
good cause only, and it neither refers to nor incorporates
therein the provisions of CPLR 2005, i.e., the statute that
permits courts to excuse delay or default as a result of the less
stringent standard of law office failure. The CPLR is intended
to govern only "the procedure in civil judicial proceedings in
all courts of the state and before all judges" (CPLR 101; see
CPLR 105 [d]) and, absent explicit mandate, does not apply to
administrative proceedings like the one herein (see generally
Matter of United States Power Squadrons v State Human Rights
Appeal Bd., 84 AD2d 318, 325 [1981], affd 59 NY2d 401 [1983];
Matter of Nute v Bank of Commerce, 30 AD2d 1011, 1012 [1968]).
Moreover, the concept of law office failure, which only applies
in a limited context even in the civil arena (see CPLR 2004, 3012
[d]; 3215 [c]; 3216 [e]; 3404, 5015 [a] [1]; Tewari v
Tsoutsouras, 75 NY2d 1, 12-13 [1989]; Cruz v Bronx Lebanon Hosp.
Ctr., 73 AD3d 597, 598 [2010]; Storchevoy v Blinderman, 303 AD2d
672, 673 [2003]; LaValle v Astoria Constr. & Paving Corp., 266
AD2d 28, 28 [1999]; Martinez v New York City Tr. Auth., 183 AD2d
587, 587 [1992]), was intended to prevent clients from being
denied their day in court in the instance of an inadvertent
occurrence such as a misplaced file or an inaccurate diary entry
where there is no prejudice to the opposing party (see CPLR 2005;
Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws
of NY, Book 7B, CPLR C2005 at 350-352). Thus, in the absence of
an explicit reference to the CPLR, I disagree with the majority
and would review petitioners' conduct, as the Commission did,
according to the standard of good cause.
                              -9-                517776
      In this regard, while I agree with petitioners that their
petition for rehearing was electronically sent to Registered Post
(hereinafter RPost) within the applicable 30-day statutory time
period, that is not the appropriate inquiry here. Rather, this
Court is constrained to determine any abuse of the Commission's
broad discretion against the backdrop of the explicit statutory
mandate that a document is deemed filed upon receipt by the
Secretary of the Commission (see 16 NYCRR 3.5 [d]). Even after
acknowledging that petitioners' counsel very likely expected
RPost to promptly file the petition with the Secretary as
required, I find counsel's failure to follow up with RPost or the
Commission itself after not having received either the notice of
proof of delivery within two hours, as advised, or a recognition
of filing by the Commission to be illustrative of an absence of
good cause. This seems especially so in light of the record,
which demonstrates that petitioners' counsel was experienced in
this process and was not without recourse to ensure compliance
with the applicable statutory time limit (see Public Service Law
§ 128 [1]). Moreover, I share the concern of the Commission that
the perceived legislative intent to expedite siting cases weighs
against accepting petitioners' untimely petition (see generally
Matter of Kaur v New York State Urban Dev. Corp., 15 NY3d 235,
261 [2010], cert denied ___ US ___, 131 S Ct 822 [2010]). While
the majority views one day as minimal in light of the length of
this litigation as a whole, it is my view that petitioners'
failure to meet the statutory mandate of filing within 30 days
effectively concluded the litigation and, therefore, that one day
bears tremendous significance.

      Thus, I find no basis upon which to disturb the
Commission's determination that petitioners' petition was
untimely (see Matter of Powerline Coalition v New York State Pub.
Serv. Commn., 244 AD2d 98, 103 [1998], appeal dismissed 92 NY2d
919 [1998]; see also Matter of O'Brien v DiNapoli, 116 AD3d 1124,
1125 [2014], lv granted 23 NY3d 908 [2014]). In the absence of a
timely petition for rehearing, I find that the merits of the
underlying certificate of environmental compatibility and public
need are precluded from review by this Court (see Public Service
Law §§ 22, 128, 129; Matter of Powerline Coalition v New York
State Pub. Serv. Commn., 244 AD2d at 103; Matter of MCI Telecom.
Corp. v Public Serv. Commn. of State of N.Y., 231 AD2d 284,
                              -10-                 517776
289-290 [1997]; Matter of Gross v State of N.Y. Pub. Serv.
Commn., 195 AD2d 866, 868 [1993]). Accordingly, I would confirm
the Commission's determination that petitioners' petition was
untimely and dismiss the petition. However, if I were to agree
that the petition for rehearing was timely giving this Court
jurisdiction, I would concur with the majority's outcome.

      ADJUDGED that the determinations are confirmed, without
costs, and petition dismissed.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court