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Atlantic City Electric Co. and Jersey Central Power and Light Co v. New Jersey Department of Environmental Protection

July 22, 2011

ATLANTIC CITY ELECTRIC CO. AND JERSEY CENTRAL POWER AND LIGHT CO., APPELLANTS,
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, RESPONDENT.



On appeal from the adoption of N.J.A.C. 7:13 by the Department of Environmental Protection.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued on January 3, 2011

Before Judges Lisa, Reisner and Sabatino.

Appellants are utility companies that construct and maintain electric transmission lines and facilities. They challenge the legality of regulations promulgated by the Department of Environmental Protection (DEP) under the Flood Hazard Area Control Act (FHACA), N.J.S.A. 58:16A-50 to -101. Under prior regulations, the installation and maintenance of linear development infrastructure (LDI), which consists primarily of utility poles, towers, and power lines, was generally unregulated. The new regulations require permits for the construction of these facilities and also prescribe standards for vegetation management related to them. The new regulations also reduced the net fill allowance in these areas from twenty percent to zero percent. The new rules were first proposed and published on October 2, 2006. See N.J.A.C. 7:13. They were ultimately adopted on October 2, 2007, and published on November 5, 2007.

Appellants argue that (1) because DEP failed to adequately explain its change in position regarding the need for FHACA regulation of LDI, the rules violate the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -25; (2) the vegetation management provisions of the new rules create irreconcilable conflicts with other state and federal laws and regulations pertaining to electric transmission lines and facilities; and (3) the new zero net fill standard is arbitrary and capricious. For the reasons that follow, we reject these arguments and conclude that the new rules are valid.

I.

The FHACA, initially enacted in 1962, authorizes the DEP to adopt rules "concerning the development and use of land in any delineated floodway which shall be designed to preserve its flood carrying capacity and to minimize the threat to the public safety, health and general welfare." N.J.S.A. 58:16A-55(a). The DEP is further statutorily directed to provide for "the waiver, according to definite criteria, of strict compliance with the rules and regulations, where necessary to alleviate hardship." N.J.S.A. 58:16A-55(b).

We need not trace in detail the history of rules promulgated pursuant to this authority. All parties agree that in earlier versions of the rules, LDI were deemed non-regulated uses and did not require permits, provided they were properly anchored to withstand flooding and erosion. The basis for this status was a finding by DEP that LDI did not present a sufficiently significant disturbance of flood hazard areas to affect flood flow or elevations.

The 1995 version of the rules was set to expire on June 30, 2005. DEP planned a comprehensive revision of the rules, but, to prevent expiration of the existing rules, it readopted the existing rules as an interim measure until the new rules could be formulated. The record of that process includes comments and responses published on February 6, 2006, which revealed mixed positions regarding the issue now before us.

On the one hand, DEP noted that exempt activities that were of an insignificant nature should remain exempt. It cited as an example "the placement of utility poles [and] jacking of utility lines beneath channels" as examples, stating that "[s]ince these activities, when done properly, do not contribute to flooding or environmental degradation, the [DEP] is not considering removing all such exemptions from the chapter." On the other hand, DEP noted its obligation to amend its rules from time to time based on its experience in administering them, and, in that regard, specifically pointed to "[r]ecent flooding events [that] served to underscore the need for comprehensive revisions to the rules." Accordingly, DEP was considering a number of amendments "such as further restricting the placement of fill in flood hazard areas [and] stricter requirements for structures in flood hazard areas," acknowledging that it had not, at that time,"determined the full extent of the changes to be included in the anticipated proposal."

DEP's reference to "recent flooding events" pertained to an unusual number of severe flooding incidents in 2004 and 2005, causing substantial damage and dislocation along the Delaware River. Between 1995 and 2005, the National Flood Insurance Program in New Jersey paid more than $241,000,000 in claims. A rainstorm spanning several days in the spring of 2005 flooded approximately 3,500 homes and caused the evacuation of more than 5,500 people. In response to these events, Acting Governor Codey established the Delaware River Flood Mitigation Task Force on April 18, 2005. The Task Force was chaired by the DEP Commissioner and included among its members experts in the field of flood management, some of whom were representatives of relevant federal agencies, such as the Federal Emergency Management Agency (FEMA) and the United States Army Corps of Engineers.

The work of the Task Force was ongoing during the readoption of rules process. In the February 6, 2006 published comments and responses, one commenter suggested that DEP should not wait for the Task Force to issue its final report before proposing new rules. DEP responded that it did not intend to wait until the Task Force made its final recommendations before proposing revisions to the FHACA rules. It further stated that "[i]f the Task Force report recommends that further changes should be made to this chapter, the [DEP] will consider those changes and propose amendments as appropriate."

The Task Force issued its final report on August 22, 2006. DEP published its proposed new rules, those that are now before us, on October 2, 2006. DEP incorporated some of the Task Force's recommendations, including its recommendation to reduce the twenty percent net fill standard to zero percent in flood hazard areas.

II.

The new regulations set forth a broad scheme of addressing "regulated activities" in "regulated areas." N.J.A.C. 7:13-2.1(a). Generally, a permit is required to conduct a regulated activity within a regulated area. Ibid. The new rules provide for five types of permits: permits-by-rule, general permits, individual permits, emergency permits, and CAFRA*fn1 permits. N.J.A.C. 7:13-2.1(b).

Because it considers certain activities to have the potential to exacerbate flooding, DEP regulates those activitieswithin flood hazard areas*fn2 and riparian zones*fn3 . Regulated activities include the removal of vegetation in the riparian zone, alteration of the topography of the land, establishment of an impervious surface, storage of unsecured materials, and construction. N.J.A.C. 7:13-2.4. DEP also regulates a substantial amount of water in the State, including all non-coastal and non-manmade waterways draining more than fifty acres of land. N.J.A.C. 7:13-2.2(a)1-3.

Based on the definition of "regulated activities," the placement and maintenance of LDI now require a permit, which was not required under the previous rules. Further, the new rules require that future projects within the riparian zone avoid tree and vegetation clearing and require the re-planting of vegetation disturbances. Finally, with respect to the issues on appeal, the new rules have replaced the twenty-percent net fill standard with a zero-percent standard.

Permits-by-rule allow specified activity without prior DEP approval, as long as the conduct conforms with the permit specifications. N.J.A.C. 7:13-7.1. One such permit-by-rule pertains to the placement of LDI. N.J.A.C. 7:13-7.2(c). The conditions for permits-by-rule are stringent, and include a prohibition on trees being cleared, cut or removed within the riparian zone. N.J.A.C. 7:13-7.2(c)1.iii, 2.iv, 3.ii. Also, vegetation that is disturbed must be replanted within six months. N.J.A.C. 7:13-7.2(c)1.iv, 2.v, 3.iii, 5.iii. In appellants' comments, they explained that often the removal of trees and vegetation is critical to the installation and maintenance of LDI.

As part of the permit-by-rule requirements for open-frame utility towers, the footings must be constructed at or below grade. N.J.A.C. 7:13-7.2(c)2.i. Appellants' comments noted three problems with this requirement. First, it is often necessary to construct towers in the flood fringe*fn4 or floodway*fn5 .

Second, footings must be placed above the flood elevation because of the possibility of the steel tower frame corroding in the water. Third, requiring the footings to be situated below grade increases the impact on the environment, due to increased maintenance.

Restrictions on vegetation disturbance also apply as part of the new permit-by-rule requirements for underground utility lines that are "jacked," or directionally drilled, under a channel or waterway. N.J.A.C. 7:13-7.2(c)3.ii--iii. DEP stated that these permits were required because of "the potential for utility lines to be incorrectly jacked under waterways and threaten the integrity of the channel." Appellants, and PSE&G Services Corp., explained in their comments that the restriction may prevent the jacking of lines because it may be necessary to remove vegetation and trees to use the technology.

In response to these comments, DEP noted that tree removal should not be permitted automatically. Instead, it should only be considered through the individual permit application process. Further, there is a general permit available for continued routine maintenance on structures existing prior to the passage of the new regulations. N.J.A.C. 7:13-7.2(b)1. That general permit would extend to general maintenance on LDI built under the new regulations.

The new rules also created General Permit 8 for the construction of utility lines across a body of water draining less than fifty acres of water. N.J.A.C. 7:13-8.10. Such utility lines are required to comply with the standards for riparian zone vegetation disturbance as set forth in N.J.A.C. 7:13-10.2. N.J.A.C. 7:13-8.10(b)4. Appellants note that there are few qualifying waterways in the state to which this general permit would apply. In response, DEP acknowledged that, if the general permit did not apply to a particular project, then construction of LDI would need to satisfy the requirements for an individual permit.

Similar to permits-by-rule and general permits, individual permits also contain standards for vegetation removal according to Table C in N.J.A.C. 7:13-10.2. N.J.A.C. 7:13-10.2(r)1.

If an applicant cannot satisfy the requirements of the individual permit, the regulatory scheme provides for hardship exceptions. N.J.A.C. 7:13-9.8. This requires satisfaction of any one of these three criteria: (1) there is no feasible prudent alternative; (2) the cost of compliance is unreasonably high in relation to the compliance benefits; or (3) DEP and the applicant agree to alternative protective measures. N.J.A.C. 7:13-9.8(a).

Finally, hardship waivers are available if all four of the following criteria are satisfied: (1) because of extraordinary circumstances, compliance would constitute undue hardship; (2) the proposed activity would not pose a threat to continuous or nearby property; (3) the proposed activity would not threaten the environment or the public health, safety or welfare; and (4) the applicant did not create the hardship. N.J.A.C. 7:13-9.8(b).

Appellants' comments to the proposed rules asserted several potential conflicts between federal and state non-FHACA regulations. The Federal Emergency Regulatory Commission (FERC) and the New Jersey Board of Public Utilities (BPU) both ...


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