LAW OFFICES

BERKMAN, HENOCH, PETERSON & PEDDY, PC. IOO GARDEN CITY PLAZA, GARDEN CITY, NY I I S30

GILBERT HENOCH KENNETH S. BERKMAN STEVEN J. PEDDY GARY H. FRIEDENBERG RONALD M. TERENZI MIRIAM R. MILGROM STEPHEN J. BROOKMEYER GREGORY P. PETERSON PETER P. PETERSON (1936-2001)

JAMES ESPOSITO VINSON J. FRIEDMAN MURRAY GOLDBERG JOSEPH E. MACY STANLEY MISHKIN DOUGLAS E. SPELFOGEL JACK M. STEINGART LISA M. STEPHAN PETER SULLIVAN

TELEPHONE: (516) 222-6200

FACSIMILE: (516) 222-6209

E-MAIL: thefirm@bhpp.com

carreAP

COUNSEL JAMES M. PED0W1TZ LEONARD S. ELMAN

BENET E. BRIOGEMAN ROBERT T. BLOOM

MARK WEPRIN

VINCENT P. ADOMAITES DAN M. BLUMENTHAL ROBERT BOMMARITO DONNA M. CASAZZA KAREN A. FOLEY CARA GOLDSTEIN MARTIN J. GOLDSTEIN THOMAS C. HABERLACK DEBORAH IAMMARINO WILLIAM B. IFE ADAM S. KALB ZHANNA S. KANDEL

JOSEPH H. KLIEGMAN RONALD P. LABECK BRUCE D, MAEL THOMAS McKEVITT DENAOHENSTEIN ANDREW M. ROTH ROSLYN Z. ROTH SEAN SEXTON ROBERT I. SKLAR MICHAEL SOLEIMAN-TEHRANI CHRISTOPHER F. ULTO STACEY M, VALENZA

February 27, 2003

Hon. Janet H. Deixler, Secretary Board on Electric Generation Siting and the Environment New York State Public Service Commission Executive Office 14,h Floor Three Empire State Plaza Albany, NY 12223-1350

Re: Case 00-F-1356 and Case 1-4734-00333/00003 Application of Kings Park Energy, LLC.

WRITER'S DIRECT DIAL:

Dear Secretary Deixler:

Enclosed for filing please find five copies of the Town of Huntington and Town of Smithtown's Reply, along with Affidavit of Service, to Kings Park Energy's opposition to the Town of Huntington's motion to dismiss the pending Article X and Department of Environmental Conservation proceedings.

Very truly yours,

Berkman, Henoch, Peterson & Peddy, P.C.

J(^eph Bf Macy C/

JEM/sl

l\ h W #

#

4'S: h6 $m "O--

LAW OFFICES

BERKMAN, HENOCH, PETERSON & PEDDYTEC. IOO GARDEN CITY PLAZA. GARDEN CITY. NY I 1530

GILBEBT HENOCH KENNETH S. BERKMAN STEVEN J. PEOOV GAPY H. FfllEDENBERG BONALO M. TEBENZI MIRIAM R. MILGROM STEPHEN J. BROOKMEYER GREGORY P. PETERSON PETER P. PETERSON (Isas-iOOTI

JAMES ESPOSITO VINSON J. FRIEDMAN MURRAY GOLDBERG JOSEPH E. MACY STANLEY MISHKIN DOUGLAS E. SPELFOGEL JACK M. STEINGART LISA M. STEPHAN PETER SULLIVAN

COUNSEL JAMES M. PEDOWITZ LEONARD S. ELMAN

BENET E. BRIDGEMAN ROBERT T. BLOOM

MARKWEPRIN

TELEPHONE: (SIS) 2aa-6SOO

FACSIMILE; (5i6i aaasaos

E-MAIL: thefirm®bhpp.com

VINCENT P. ADOMAITES DAN M. BLUMENTHAL ROBERT BOMMARITO DONNA M, CASAZ2A KAREN A. FOLEY CARA GOLDSTEIN MARTIN J. GOLDSTEIN THOMAS C. HABERLACK DEBORAH IAMMARINO WILLIAM B. IFE ADAM S. KALB ZHANNA S. KANDEL

JOSEPH H. KLIEGMAN RONALD P. LA8ECK BRUCE O. MAEL THOMAS McKEVITT DENA ORENSTEIN ANDREW M. ROTH ROSLYN Z. ROTH SEAN SEXTON ROBERT I. SKLAR MICHAEL SOLEIMAN-TEHHANI CHRISTOPHER F. ULTO STACEY M. VALENZA

WRITER S DIRECT DIAL:

February 26, 2003

Hon. Gerald L. Lynch NYS Department of Public Service Three Empire State Plaza Albany, New York 12223-1350

Hon. Susan Dubois NYS Department of Environmental Conservation 625 Broadway, I5'Floor Albany, New York 12233-1550

Re: Application of Kings Park Energy, LLC Case #00-F-1356

Dear Judges Lynch and Dubois:

As you are aware, the Town of Huntington has moved to dismiss the Article X application filed by Kings Park Energy, LLC ("KPE") based upon its public announcement that it does not intend to pursue its application and is seeking to sell all of its interest in the project.1 On February 19, 2003 we were served with KPE's opposition to the Town's motion, as well as other motions served by parties to this action. The Town of Huntington believes that the opposition of KPE to its motion substantially mischaracterizes both the law and facts surrounding this application. Based upon your Honor's decision to grant the movants the right to file a reply to the opposition of KPE we respectfully submit this letter reply in lieu of a more formal response.

1 The Town of Smithtown has also moved for dismissal of the Article X application upon grounds substantially similar to Huntington. Prior to submitting this reply, counsel for the Town of Huntington has discussed this matter and its reply with the Town Attorney for the Town of Smithtown. By agreement, this reply is submitted jointly by the two towns (Huntington and Smithtown) in further support of their motions.

d^PPEDDY, EC. ^P BERKMAN, HENOCH, PETERS

• KPE HAS FAILED TO DEMONSTRATE ITS APPLICATION FURTHERS THE PURPOSES OF ARTICLE X

Pursuant to their motions to dismiss, both the Town of Huntington and Smithtown argued that KPE's application must be dismissed because the evidence unequivocally demonstrates that the proposed facility would not satisfy additional electric capacity needs or other electric system needs, that the construction of the facility is consistent with long- range energy planning objectives and strategies (PSL §168) and is reasonably consistent with the energy policies and long-range energy planning objectives and strategies contained in the most recent state energy plan. Public Service Law (PSL" § 164(1)(e)). Notably KPE utterly fails to address this argument. Rather, in an effort to obfuscate the issues upon these motions, KPE argues, alternatively, that (1) it is still an "Applicant" as defined by 16 NYCRR 1000.2, and (2) press reports of its rationale for abandoning the project including its own statements in press releases, can not be relied upon as a basis to assess the need for the project. In this regard, KPE's opposition is unavailing,

Equally without merit is KPE's semantic argument that it remains the "applicant". First it is utter nonsense and disingenuous to suggest, having announced that it is not proceeding with the application, that it remains the "applicant". As each of the movant's established in their motions, having declared its intention not to proceed with the Article X application KPE lacks the standing which would make it an "applicant". Second, it is irrelevant whether KPE is the applicant where, as here, it has failed to establish that its application meets the requirements for Article X.

Initially we note that we agree with KPE that in determining the instant motions, the examiners should apply the same standards as would govern a motion for summary judgment. In this regard, it is black letter law that once a party has made a showing of its right to judgment, it is incumbent upon the party opposing the motion to "lay bare its proof and offer evidentiary support for its claims. Once a party seeking summary judgment has demonstrated an entitlement to judgment, the burden shifts to the party opposing the motion to "rebut that prima facie showing,". Bethlehem Steel Corp. v. Solow. 51 N.Y.2d 870 872 433 N.Y.S.2d 1015, 414 N.E.2d 395 (1980) In order to meet this burden, the party opposing the motion must produce, "evidentiary proof in admissible form sufficient to require a trial of material questions of fact." Zuckerman v. Citv of New York. 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 (1980).

KPE despite arguing that the examiners must apply a summary judgment standard to the instant applications, wholly fails to demonstrate the existence of a material issue as to whether the application meets the standards set forth in the Public Service Law. Although each of the movants offered substantial evidence that, in light of changed circumstances including, but not limited to, KPE's own decision not to proceed the application does not satisfy the regions future energy needs nor is it consistent with long- range planning, KPE fails to offer any evidence of how its application will meet this burden. Indeed the only effort to address this argument, albeit a futile and specious one, is KPE s statement of the "many benefits"of the project set forth on pages 16-17 of its opposition. However, these "benefits" to which KPE alludes are nothing more than a verbatim recitation of the language contained within its preliminary scoping statement. KPE s decision not to proceed with the project is manifest evidence that these considerations are, if not wholly inapplicable, subject to substantial doubt. Notwithstanding, and clearly failing to meet its burden on this motion, KPE fails to offer any evidence to demonstrate that these considerations are now or ever were viable in light of the changed environment.

MW PEDDY, EC. ^P BERKMAN, HENOCH, PETERS

Stated succinctly, it is not sufficient for KPE to state that its own press releases or other press reports are potentially unreliable. In response to these motions to dismiss, KPE must show how the project meets the requirements set forth in the Public Service Law. Its opposition fails to meet this burden.

KPE citation to prior Article X proceedings as precedent for its request to adjourn the instant case so as to allow it adequate time to find a buyer is without merit. The Article X applications cited, however, differ substantially from the application at bar in two very important ways. First, none of the participants raised the issue, or put forth evidence, of the complete lack of public need and interest in the proposed plant. Second, in light of this lack of public need and interest, as well as KPE's unwillingness to address this issue and provide evidence to the contrary, continuation of the application process at this very late stage will substantially prejudice the movants by forcing each to expend more non-intervenor monies for the singular purpose, as expressed by KPE, to sell the proposed plant. The exceeding late stage of this request, thereby assuring the duplication of proceedings, coupled with the unchallenged lack of public interest and need, supports a finding of dismissal based on PSL §§ 164 and 168.

The applicant cites the Board ruling in Glenville Energy Park, LLC, Case 99-F-1835, which provides, "because a finding of an applicant's fitness is not required for a certificate, dismissal is unavailable on grounds that such a finding could not be made." The finding, however, does not address the issue before this Board. The intervenors motions are not based on the fitness of a potential buyer for KPE, but how recent developments demonstrate an utter lack of public need and interest in the project itself.

In the ruling denying a motion to dismiss the application of Glenville Energy Park, LLC, the examiners adopted the DEC Staff's position that "the financial liability of an applicant is an insufficient basis for dismissing an application, although it could be a consideration related to the public interest findings the siting board must make". The examiners continue that "the fitness of a facility's ultimate developer and operator... could be addressed as DEC Staff suggests in the siting board public interest determination."

As such, the ruling in Glenville Energy Park, LLC specifically stands for the rule that the Board must examine the facts to ascertain whether a public need exists for the proposed plant. Upon the facts provided, or more accurately the complete absence of any facts, no public need or interest exists.

The case Brookhaven Energy LP, Case 00-F-0566, cited by KPE, further supports the pending motions to dismiss. KPE argues that competition in the energy market would be stifled if the Board were to dismiss its application. Again, KPE presumes that its proposed facility fosters such competition without supplying any evidence that it is in the public interest. KPE quotes the Board in Brookhaven Energy LP, which stated;

We recognize that either facility may have a lesser impact if the other were considered as part of the base case and if it were excluded, what we will rely on the market forces in a competitive environmental to ultimately determine which unit should be built. Our obligation is to ensure that each application meets the requirements of PSL Section 168, which states In part that "the construction operation of the facility is In the public interest" (Emphasis added)

BERKMAN, HENOCH, PETERSOt^PPEDDY, EC. ^P

As the Board held, a demonstrable showing that the proposed facility is in the public interest is a sine qua non to a jurisdictionally sufficient application. KPE continues to ignore this requirement.2

In the Bethlehem Energy Center Case 97-F-2162, Niagra Mohawk filed its Article X application of November 30, 1998. On January 21, 1999, the Board found that the application was deficient and refused to approve it for filing. The Board however permitted the application to remain open pending the submission of supplemental materials. Only after the sale of the project to PSE & G was the application supplement by the successor who was permitted to continue the application. Therefore, in the Bethlehem Energy Case the Board had before it a essentially new Article X proceeding not one as here, which but for KPE's decision not to proceed, would be nearing completion. Clearly in Bethlehem the procedural posture of the case precluded the potential for prejudice to the other parties to the proceeding. In contrast, substantial prejudice will mure to the parties herein if KPE's application were to be granted. KPE's disingenuous effort to analogize the Bethlehem Energy case to the present facts is not unlike an attempt to compare an mutero pregnancy to an adolescent.

Finally the adjournments in the Astoria Generating application were not the product of the applicant's request for time to sell the project, nor is there evidence that the adjournments were requested due to lack of public need and interest facing the proposed project KPE's conclusion that adjournments in prior Article X applications provide the basis for an adjournment in its application, regardless of the facts surrounding the application and its failure to demonstrate a public need for the facility, is preposterous.

CONTINUATION OF THE APPLICATION WOULD CONSTITUTE AN EGREGIOUS ABUSE OF THE ARTICLE X PROCESS

KPE's opposition to the Town of Huntington's motion to dismiss the instant proceeding on constitutional grounds fundamentally mischaractenzes the basis for its application and attempts to divert the examiner's attention from the true issue before them. What is at issue in the present application is not, as KPE would characterize the question, whether the expenditure of municipal funds in conjunction with a "permitting proceeding administered ... under statutory authority" is constitutional. Were this the question before the examiners, Huntington would not question the right of KPE to continue its application. This is not however, the question before the examiners. What is at issue is whether KPE having publicly and continuously stated that it is not pursuing its application under Article X for the siting of an electric generating facility, can continue that proceeding for the sole and exclusive reason that it seeks to recoup its monies expended in pursuing the application to the point where it determined it was no longer feasible.

As set forth in Huntington's motion, the purposes behind and the showing of need which an applicant is required to make in an Article X proceeding are clearly set forth in the

2- It is noteworthy that although KPE spends a great deal of time arguing that the municipalities' citation to various news reports is unreliable, it quotes a number of similar new stories in support of its

argument.

"" PEDDY, EC. ^m BERKMAN, HENOCH, PETERS

' statute 3 As KPE acknowledges, the controlling case law unequivocally holds "that the State may not hand over public funds to private persons or use public credit to finance gratuities to private persons or organizations." (See, KPE opposition to Motions p. 21). Yet that it is precisely what KPE suggests that the Towns of Huntington and Smithtown do in the instant case! As KPE acknowledges, it has determined not to pursue its Article X application and therefore, is not urging that the application continue because it furthers the public benefit by meeting electric needs or contribute to long-range energy planning (See, P.S.L §§ 164,168). To the contrary, KPE acknowledges that its sole purpose in seeking to continue the pending application is its own pecuniary benefit!

In this respect, KPE's application clearly reflects the private purpose behind continuation of the instant proceeding. Thus, KPE states in opposition to the pending motions of the parties:

KPE has not withdrawn its Article X Application. It has asked that, except for certain pending activities, consideration of its Application be postponed while it attempts to find a buyer.

KPE's financial reasons for continuation of the pending Article X application are further evidenced when it states:

Surely, the substantial investment made by KPE since before the commencement of pre-application procedures in 2000, entitles KPE to the right to full and fair consideration of its request to adjourn the proceedings while it searches for a buyer for the project.

Continuing this theme, KPE further argues that it should be permitted to continue the pending Article X application in order to recoup its "substantial investment.

As a result, an Article X applicant must make a much more substantial investment in its application than most, if not all applicants for DEC permits. The extensive pre-application procedures and public information program required of Article X applicants further increase the required level of investment.

Notably KPE does not contest the contention of the Towns that they will be required to expend public monies in conjunction with the pending application while it endeavors to sell this project. While trivializing this constitutional issue, KPE's reasons for continuing the pending Article X proceedings are patently obvious. It seeks to do so for the exclusive reason that only by selling the project can it hope to recover the monies which it has already expended in this ill conceived and wholly unnecessary project... Incredibly, KPE

3 See, Public Service Law §§ 164, 168.

4 KPE's attempt to analogize its application to assign its pending Article X proceeding to another, as vet unknown entity to the DEC'S Policy Guidance on Transfer of Permits and Pending Applications is comp etely Slaced' First, the DEC statement is just that, a policy not a regulation. Second it has little SnS inTe more complex context of Article X which deals with a far more vaned series of issues and which, as KPE acknowledges, is "more comprehensive, and more detailed .

Urn PEDDY, EC. ^P BERKMAN, HENOCH, PETERS'

does not even attempt to suggest that there is any public purpose to be served by continuation of the Article X application or that its desire to continue is designed for any reason other than its own financial benefit. In return for this exclusively private benefit, KPE argues that the municipal intervenors should be compelled to expend public monies in direct contravention of the express provisions of Article VII, § 8(1) of the New York Constitution. Simply stated, what is "bizarre" is not the Towns' motions but KPE's obvious disregard for the law's unequivocal prohibition against the expenditure of public monies for an exclusively private purpose.

CONCLUSION

KPE's request to continue the pending Article X and DEC permitting proceedings while it endeavors to find a buyer for this failed project is palpably improper. The Town's of Huntington and Smithtown jointly urge that their motions be granted in their entirety and that the pending applications be dismissed together with such other and further relief as is deemed just and proper.

Respectfully submitted,

Joseph E. Macy Berkman, Henoch, Peterson & Peddy, P.C. Counsel for the Town of Huntington 100 Garden City Plaza Garden City, New York 11530

Jessica Schubert Assistant Town Attorney Town of Smithtown 99 West Main Street P.O. Box 575 Smithtown, New York 11787

NEW YORK STATE BOARD ON ELECTRIC GENERATION SITING AND THE ENVIRONMENT

APPLICATION BY KINGS PARK ENERGY, LLC FOR Case 00-F-1356 A CERTIFICATE OF ENVIRONMENTAL COMPATIBILITY AND PUBLIC NEED TO CONSTRUCT AND OPERATE A 300-MEGAWATT SIMPLE-CYCLE ELECTRIC GENERATING FACILITY IN THE TOWN OF SMITHTOWN, SUFFOLK COUNTY, NEW YORK

IN THE MATTER OF THE APPLICATION OF KINGS PARK ENERGY, LLC FOR PERMITS FROM THE DEPARTMENT DEC Application No. OF ENVIRONMENTAL CONSERVATION 1-4734-00333/00003

AFFIDAVIT OF SERVICE

STATE OF NEW YORK ) )SS.:

COUNTY OF NASSAU )

SUZANNE LCD ATI, being duly sworn, deposes and says:

I am not a party to the within action, am over 18 years of age, and reside at East

Meadow, New York.

On February 26,2003,1 served the within LETTER REPLY by e-mail and depositing

a true copy thereof, enclosed in post-paid wrapper, into the exclusive care and custody of the U.S.

Postal Service within New York State, addressed as shown:

Hon. Gerald L. Lynch NYS Department of Public Service Three Empire State Plaza Albany, New York 12223-1350 gerald_lynch@dps.state.ny.us

Hon. Susan Dubois NYS Department of Environmental Conservation 625 Broadway, l8'Floor Albany, New York 12233-1550 sjdubois@gw.dec.state.ny.us

Richard M. Cogen, Esq. Andrew M. Gansberg, Esq. Nixon Peabody, LLP Omni Plaza, Suite 900 30 South Pearl Street Albany, New York 12207 rcopen(a),nixonpeabodv.com agansberg@,nixonpeabodv.com

Paul Agresta, Esq. Assistant Counsel NYS Department of Public Service Three Empire State Plaza Albany, New York 12223-1350 paul_agresta@.dps.state.nv.us

Richard Powell Project Manager NYS Department of Public Service Three Empire State Plaza Albany, New York 12223-1350 richard powell(a),dps.state.nv.us

Laura Lefebvre TRC Environmental Consultants Booth Mills South Foot of John Street Lowell, MA 01852 llefebvre@.trcsolutions.com

Meghan Purvee, Esq. Franz Litz, Esq. NYS Department of Environmental Conservation Office of General Counsel Division of Legal Affairs 625 Broadway Albany, New York 12233-1500 mapurvee@,gw.dec.state.nv.us

David W. Quist, Esq. Senior Attorney Division of Legal Affairs NYS Department of Health

Corning Tower Building, Room 2421 Empire State Plaza Albany, New York 12237 dwqO 1 (glhealth.state.nv.us

Jeff Gerber New York Energy Research and Development Authority 17 Columbia Circle Albany, New York 12203 jlg@,nvserda.org

Kevin Kispert NYS Department of Environmental Conservation Project Manager Division of Environmental Permits 625 Broadway, 4,h Floor Albany, New York 12233-1750 kakisper(a),gw.dec.state.nv.us

Anthony J. Grey, Ph.D. NYS Department of Health Bureau of Toxic Substance Assessment Flanigan Square Room 330 547 River Street Troy, New York 12180-2216 aj gO 1 (glhealth. state.nv.us

Suffolk County Executive By: Robert J. Cimino,Esq., Suffolk County Attorney H. Lee Dennison Building 100 Veterans Memorial Highway P.O. Box 6100 Hauppauge, New York 11788-0099 phyllis.seidman@,co.suffolk.nv.us

Vito Minei, Director Division of Environmental Quality Suffolk County Department of Health Services 220 Rabro Drive East Hauppauge, New York 11788 vito.minei@.co.suffolk.nv.us

Townline Association, Inc. By: Frederick Eisenbud, Esq. 6165 Jericho Turnpike Commack, New York 11725-2803 feisenbud@.trial 1 .com

Paul Eisen BE&K Terranext Two Perm Plaza 6,h Floor New York, NY 10121 peisenfgibektnxt.com

Pace Energy Project By: Victor Tafur, Esq. 78 North Broadway White Plains, New York 10603 vtafur@,law.pace.edu

Kings Park Civic Association San Remo Civic Association Mayfair Woods Civic Association by: Gregory Szurnicki P.O. Box 165 Kings Park, New York 11754 gszum(a).worldnet.att.net

Fred Monner 21 Pimlico Drive Commack, New York 11725 moncomm@,aol.com

International Brotherhood of Electrical Workers Local Union 1049 By: Ellen Richmond Director, IBEW Local 1049 745 Kings Highway Hauppauge, New York 11788 eredmond@.ibewl 049.com

Oil Heat Institute by: Usher Fogel, Esq. 557 Central Avenue Suite 4A Cedarhurst, New York 11516 ufogel(a),aol.com

Sworn to 26th day o

ma. /jhL/) LODATI

JAMES ESPOSITO Notary Public, State Of New Vbrk

No. 02ES60e0971 Qualified In Suffolk County

Commission Expires 07/08/2003