Danskammer Energy, LLC v. New York State Department of Environmental Conservation

In a lawsuit challenging the denial of a Title V air permit for construction and operation of an expanded and repowered natural gas-fired power plant, a New York Supreme Court held that New York’s Climate Leadership and Community Protection Act (CLCPA) granted the New York State Department of Environmental Conservation (NYSDEC) authority to deny the permit application based on a provision requiring state agencies to consider whether decisions “are inconsistent with or will interfere with the attainment of the statewide greenhouse gas limits” established under the CLCPA. If decisions are deemed inconsistent, agencies must provide a detailed statement of justification as to why limits cannot be met and identify alternatives or greenhouse gas mitigation measures. The court found that the provision’s plain language granted NYSDEC authority to deny a permit, rejecting the owner’s interpretation that the provision required to review consistency with CLCPA goals but did not authorize denial of a permit. The court said such a review would serve “no practical or meaningful purpose” and would render the legislature’s mandate to reduce emissions “completely toothless for years to come.” The court also rejected the owner’s contentions that NYSDEC “usurped a legislative function in denying the permit” and that NYSDEC violated the owner’s due process rights under the New York Constitution and the State Administrative Procedure Act “by promulgating a de facto ‘rule’ prohibiting all gas-fired power plants in New York.” Although the court concluded that it could consider the claims that NYSDEC exceeded its authority and acted unconstitutionally, the court did not decide “significant, fact driven substantive issues” arising from the determination that the project would be inconsistent with CLCPA goals and was not otherwise justified. The court said the owner had failed to exhaust its administrative remedies concerning these issues, which would be addressed in a pending administrative appeal.