IROQUOIS: PSC LACKS AUTHORITY FOR PENALTY

The New York Public Service Commission lacks authority to impose a threatened $1.1 million penalty for environmental violations by Iroquois Gas Transmission System and five contractors. That's what Iroquois argued in its response to an Aug. 21 PSC order covering 11 alleged violations of the commission's certificate and of the company's environmental management and construction plan (EM&CP).

Sept. 16, 1991

4 min read

The New York Public Service Commission lacks authority to impose a threatened $1.1 million penalty for environmental violations by Iroquois Gas Transmission System and five contractors.

That's what Iroquois argued in its response to an Aug. 21 PSC order covering 11 alleged violations of the commission's certificate and of the company's environmental management and construction plan (EM&CP).

Iroquois bases its argument on its status as a federally regulated interstate pipeline. In addition, Iroquois has responded to the particulars of the violations, saying the facts alleged in the order are "seriously misstated," The violations related to wetlands protection and slash burning (OGJ, Sept. 2, p. 33).

When these facts are corrected, Iroquois said, it becomes clear no violation occurred of either the certificate or the EM&CP.

Even as it prepared its Sept. 5 response, the company let a contract for the project's final spread, 9 miles on Long Island.

Michael Curran & Associates, Houston, and Otis Eastern Service Inc., Wellsville, N.Y., began work last week on the portion through Huntington and Smithtown, N.Y. Contract value was set at $6.4 million.

Iroquois Pres. Robert J. Reid said direct deliveries to Long Island are on target for early 1992 despite many stop work orders issued this spring and summer by the PSC for various environmental violations.

PRECEDENT CITED

In making its argument, Iroquois cited last year's Second Circuit Court of Appeals' decision in National Fuel Gas Supply vs. Public Service Commission. The court found, said Iroquois' response to the show cause order, that the Natural Gas Act (NGA) preempts enforcement of Article VII of New York's Public Service Law against a regulated interstate pipeline.

In that case, the court cited the possibility of a penalty against National Fuel as an action that might "prevent construction of federally approved interstate gas facilities." And such action, said Iroquois, "would therefore be precluded by the comprehensive and preemptive scope of the NGA." That decision "clearly forecloses the PSC from enforcing a penalty action against Iroquois."

Ed Collins, PSC spokesman, said the commission staff will take "an appropriate amount of time" to analyze Iroquois' response and make recommendations to the commission.

At that time, the commission will decide whether to go into state court seeking penalties. Those could exceed $1.1 million, depending on how long the staff determines each violation lasted. Penalties are set at a maximum of $100,000/day/violation.

COMPANY ACTIONS

Iroquois contends it has consistently acted responsibly in all the instances cited in the order.

In the breaching of the Spread 3 beaver dam and subsequent draining of a protected wetlands Iroquois said the dam was only temporarily breached and surface water level in the wetland was temporarily lowered. There was "no damage to the wetland or the beaver lodge itself."

Iroquois further said such ponds have been drained by Spread 1 contractor Murphy Bros. with full consent of the PSC staff. In any case, the company contends the lodge, which is the protected environmental feature listed in the EM&CP, was not damaged.

Further, the dam was repaired by the contractors at Iroquois' direction within 2 days. Although the wetland's surface was lowered, the wetland was in no sense destroyed as the show cause order alleges, Iroquois' response said.

Iroquois further denies that any PSC staff stop work order was ignored. A July 12 oral order to stop all clearing of wetlands on Spread 3 was obeyed. Clearing resumed only on July 19 when a written stop work order, received July 17 by Iroquois, was lifted.

PSC had issued 10 citations for 11 violations. Two of the violations allegedly occurred in this wetlands incident. The remaining nine citations involved violations of rules on proper slash burning.

In those incidents, Iroquois said one landowner gave permission for a burn pile to be located nearby and did not file a complaint.

In another instance, a burn pile was moved away from one house in which an asthmatic child lived but too near another house whose owners could not be contacted.

A PSC inspector filed a complaint, and the burn pile was later moved to an authorized location, Iroquois said.

Iroquois further said that, contrary to claims in the PSC order, all the cited burning instances were supervised.