Senate probe of power plant calls for stronger anti-corruption practices
Originally published in
Times Union
on
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A state Senate investigation into the permitting process for the controversial Competitive Power Ventures power plant in Orange County found issues with how the state regulates environmental projects. The panel’s report recommends several changes to those processes, including beefing up state staff and passing legislation to suspend or deny permits under certain circumstances.
CPV operates the Valley Energy Center, a 680-megawatt combined-cycle natural gas-fired plant that fully opened in 2018. The plant is operating without a federal Clean Air Act Title V permit, which is necessary for major sources of pollutants.
Some of the findings in the 200-page report released this week by the state Senate Committee on Investigations and Government Operations noted deficiencies within the state Department of Environmental Conservation. It said the department is understaffed and overtaxed and noted issues with how DEC handled environmental permitting as regulations changed over the years.
The report also found that CPV did not perform due diligence in verifying executive ethics disclosures and that the Planning Board in the town of Wawayanda, where the plant is located, was not prepared to be the lead agency for the project during its State Environmental Quality Review Act process, better known as SEQRA.
“Our investigative report lays bare the numerous regulatory and statutory deficiencies that allowed a flawed project like CPV to advance through the permitting process,” said state Sen. James Skoufis, chair of the investigative committee whose district includes Wawayanda. “Particularly when dealing with air and water quality, the state’s environmental permitting process must be far better shielded from undue influence and operate with the highest level of integrity to ensure the public’s trust. The 2025 legislative session ought to advance the recommendations highlighted in our report as a means to rebuild confidence in agency decision-making.”
Matt Litchfield, a vice president at the power company, noted in a statement to the Times Union that the company fully cooperated with the investigation.
“CPV Valley remains in full compliance with the requirements of our air permits that are currently in effect under New York law,” Litchfield wrote. “Our focus continues to be on safely and responsibly operating the facility, which remains the most efficient and lowest emitting fossil generator in the state and plays a pivotal role in helping maintain a reliable energy supply for New York. We look forward to continuing our relationship with our local and state partners as we help lead New York’s energy transition.”
The investigative committee launched its formal review last fall of the air-permit review process overseen by the DEC and certain business dealings of CPV and the power plant. As part of the review, the committee reviewed thousands of pages of documents from the company and state environmental regulators, and also interviewed CPV personnel. Some documents from the company included internal communications, emails, memos and reports.
The report noted CPV’s responsiveness, but knocked the state environmental agency for being “generally uncooperative with the majority of requests for information and documents.” It said the agency issued “blanket” denials for certain documents it deemed confidential, which the report said “undermined government transparency and accountability.”
“The committee condemns the department’s lack of candor and overall refusal to share any supposedly privileged documents or communications for review,” the report states.
Dana M. Ferine, a spokeswoman for the state Department of Environmental Conservation, said the department “conducts a transparent and thorough review of applications for environmental permits to ensure protection of public health and the environment.”
She added that the department is reviewing the power company’s air permit applications and “will determine whether issuance of the permits is inconsistent with or would interfere with the greenhouse gas emissions limits established by the Climate Leadership and Community Protection Act (of 2019).”
Ferine said if the applications are determined to be complete they will “release the draft permits for public review and comment prior to making a final decision.”
There had been intense local opposition in the lead-up to the plant’s full-time operations in 2018. Activists and Wawayanda residents turned out in droves to town government and Planning Board meetings. Residents claimed emissions were making them sick and noisy construction was disrupting their sleep.
Former Town Supervisor John Razzano also expressed frustration back then with the plant’s activities. CPV was also caught up in the corruption prosecution of Joseph Percoco, Gov. Andrew M. Cuomo’s former executive deputy secretary. Percoco was found guilty in 2018 of honest services fraud, conspiracy to commit honest services and solicitation of bribes and gratuities.
Peter Galbraith Kelly, a former CPV senior executive, pleaded guilty in federal court to arranging a “low-show job” for Percoco’s wife that paid nearly $287,000 between 2012 and 2016.
Federal prosecutors alleged that the payments secured Percoco’s help in getting a much-needed power purchase agreement for the plant. The state was seeking replacement energy sources following the announced closure of the Indian Point nuclear plant.
The case against Kelly resulted in a hung jury. He subsequently pleaded guilty to a single count of fraud conspiracy. Several elements of Percoco’s conviction were thrown out last year by a U.S. Supreme Court decision, but not the crimes related to CPV.
In 2018, following the criminal trials, DEC declined to renew a necessary permit for the company, preventing the newly completed 680-megawatt Valley Energy Center from operating. The permit, originally issued in 2013, was not renewed because the plant “does not meet current regulatory requirements,” DEC said at the time.
CPV appealed DEC’s decision to deny the renewal, and a judge allowed the plant to continue operating while the litigation continued. The power plant operates under a pre-construction air state facility permit.
Recommendations in the investigative report include:
- Advancing legislation to suspend or deny environmental permits to companies if corruption was involved in the permitting process whether by a government agency or energy company, even if related to an earlier permit.
- Investing in advanced tracking tools and fostering collaboration between Regional Greenhouse Gas Initiative state and non-RGGI states to address energy leakage.
- Forming a commission to review the Emissions Reduction Credit market, instituting transparency measures to prevent price manipulation, and conducting regular audits by an independent body.
- Preventing preferential treatment by keeping all advance notice of requests for information and requests for proposals release dates for projects confidential until official release.
- Ensuring consistency in Title IV and Title V permitting timelines and providing guidelines to avoid disadvantaging compliant firms.
- Requiring private companies seeking business with executive branch offices to obtain signed ethics disclosure forms when hiring immediate family of executive branch officials, and enacting penalties for noncompliance.
- Clearly defining DEC’s jurisdiction and establishing guidelines for pipeline permitting under the Natural Gas Act and Section 401 of the Clean Water Act.
- Providing localities access to the necessary expertise and resources of relevant state agencies to ensure proper oversight and competence in the permitting process.
- Restoring and expanding DEC’s workforce to handle inspections and enforcement effectively.
