In the Matter of the Petition of South Jersey Gas , 447 N.J. Super. 459 ( 2016 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NOS. A-1685-15T1
A-2705-15T1
A-2706-15T1
IN THE MATTER OF THE PETITION
OF SOUTH JERSEY GAS COMPANY FOR APPROVED FOR PUBLICATION
A DETERMINATION PURSUANT TO THE
PROVISIONS OF N.J.S.A. 40:55D-19. November 7, 2016
IN THE MATTER OF THE PETITION APPELLATE DIVISION
OF SOUTH JERSEY GAS COMPANY FOR
A CONSISTENCY DETERMINATION FOR
A PROPOSED NATURAL GAS PIPELINE.
____________________________________________
Argued October 11, 2016 – Decided November 7, 2016
Before Judges Yannotti, Fasciale and Gilson.
On appeal from the Board of Public Utilities,
No. GO13111049, and from the Executive
Director of the Pinelands Commission,
Application No. 2012-0056.001.
Mariel R. Bronen of the New York bar, admitted
pro hac vice, argued the cause for appellant
Pinelands Preservation Alliance (Dechert LLP,
attorneys; Ms. Bronen, George G. Gordon and
Roxanne R. Wright, on the brief).
Renée Steinhagen argued the cause for
appellants New Jersey Sierra Club and
Environment New Jersey (New Jersey Appleseed
Public Interest Law Center, attorneys; Ms.
Steinhagen, on the brief).
Ted Nissly (Fried, Frank, Harris, Shriver &
Jacobson LLP) of the Washington, D.C. bar,
admitted pro hac vice, argued the cause for
amici curiae Brendan T. Byrne, James J.
Florio, and Christine Todd Whitman (Mr. Nissly
and Cole Schotz, P.C., attorneys; Christopher
P. Massaro and Mark J. Pesce, of counsel and
on the brief; Mr. Nissly, Douglas Baruch
(Fried, Frank, Harris, Shriver & Jacobson LLP)
of the Washington, D.C. bar, admitted pro hac
vice, and Mary Elizabeth Phipps (Fried, Frank,
Harris, Shriver & Jacobson LLP) of the New
York bar, admitted pro hac vice, on the
brief).
Caroline Vachier, Deputy Attorney General,
argued the cause for respondents New Jersey
Board of Public Utilities and New Jersey
Pinelands Commission (Christopher S. Porrino,
Attorney General, attorney; Melissa H. Raksa,
Assistant Attorney General, of counsel; Ms.
Vachier, Helene P. Chudzik, Geoffrey R.
Gersten and Timothy P. Malone, Deputy
Attorneys General, on the brief).
Ira G. Megdal argued the cause for respondent
South Jersey Gas Company (Cozen O'Connor,
P.C., attorneys; Mr. Megdal, Peter J. Fontaine
and Mark A. Lazaroff, on the brief).
John G. Valeri, Jr., argued the cause for
respondent-intervenor R.C. Cape May Holdings,
L.L.C. (Chiesa Shahinian & Giantomasi, P.C.,
attorneys; Mr. Valeri and Michael K. Plumb,
on the brief).
James W. Glassen, Assistant Deputy Rate
Counsel, argued the cause for respondent
Division of Rate Counsel (Stephanie A. Brand,
Director, New Jersey Division of Rate Counsel,
attorney; Mr. Glassen, on the brief).
The opinion of the court was delivered by
YANNOTTI, P.J.A.D.
These appeals arise from a proposal by South Jersey Gas
Company (SJG) to construct a natural gas pipeline through several
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municipalities in the Pinelands Area. On December 14, 2015, Nancy
Wittenberg, Executive Director of the Pinelands Commission
(Commission), issued a letter finding that SJG's proposed pipeline
was consistent with the minimum standards of the Pinelands
Comprehensive Management Plan (CMP), N.J.A.C. 7:50-1.1 to -10.35.
In addition, on December 16, 2015, the Board of Public Utilities
(Board) granted a petition by SJG pursuant to N.J.S.A. 40:55D-19,
and determined that the Municipal Land Use Law (MLUL), N.J.S.A.
40:55D-1 to -163, and any local governmental development
regulations adopted pursuant to the MLUL, shall not apply to the
construction or operation of the pipeline.
Pinelands Preservation Alliance (PPA) and the New Jersey
Sierra Club and Environment New Jersey (jointly, Sierra Club)
appeal from the Board's December 16, 2015 decision. Sierra Club
also appeals from Wittenberg's determination.
For the reasons that follow, we remand the matter to the
Commission for further proceedings and a final decision on whether
SJG's proposed pipeline is consistent with the minimum standards
of the CMP. We also affirm the Board's decision granting SJG's
petition pursuant to N.J.S.A. 40:55D-19, but remand the matter to
the Board for entry of an amended order stating that approval of
the petition is conditioned upon a final decision of the Commission
that the pipeline conforms to the CMP.
3 A-1685-15T1
I.
We briefly summarize the pertinent facts and procedural
history. The B.L. England Generating Station (BLE) at Beesley's
Point in Upper Township, Cape May County, is a 447-megawatt
electricity-generating facility that is powered using coal, oil,
and diesel fuel. BLE provides electric power to the Pennsylvania,
New Jersey, and Maryland markets. In 2006, the New Jersey
Department of Environmental Protection (DEP) ordered Atlantic City
Electric Company (ACE), which was then the owner of BLE, to meet
certain emissions standards, repower, or shut BLE down. In 2007,
ACE sold BLE to RC Cape May Holdings (RC), an affiliate of a
Delaware limited liability company, Rockland Capital.
In 2012, DEP amended its 2006 order, and gave RC until 2016
to comply. RC decided to repower the facility using natural gas
provided by SJG, which is a public utility that provides natural
gas to approximately 360,000 customers within Camden, Cape May,
Cumberland, Gloucester, and Salem Counties. SJG proposed to
construct a pipeline that consists of 1) a "dedicated line" that
would run about eight miles in Upper Township, from an
interconnect point/regulator station to the metering station at
BLE; and (2) a "reliability line" that would run about fourteen
miles from Maurice River Township to the interconnect
point/regulator station in Upper Township, where it would connect
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to SJG's existing transmission and distribution systems and serve
as a secondary source of supply for SJG's customers in Southern
Jersey during a natural gas emergency.
The pipeline would be constructed within three state
regulatory pinelands management areas: the Pinelands Rural
Development Area, the Pinelands Village, and the Pinelands Forest
Area. Under the CMP, public service infrastructure is a permitted
land use in the Rural Development Areas, N.J.A.C. 7:50-
5.26(b)(10), and in the Pinelands Villages, N.J.A.C. 7:50-
5.27(a)(1). Public service infrastructure is, however, only
permitted in the Forest Areas if "intended to primarily serve only
the needs of the Pinelands." N.J.A.C. 7:50-5.23(b)(12).
On July 24, 2012, SJG filed a development application with
the Commission, seeking authorization and approval to construct
the pipeline. The Commission's staff deemed the application
complete on July 29, 2013, but found that the proposed project did
not meet the land use requirements in the CMP for the Forest Areas.
The Commission's staff informed SJG that it had not established
that the pipeline was "intended to primarily serve only the needs
of the Pinelands" because it would serve SJG customers outside of
the Pinelands.
On April 29, 2013, the Board issued an order authorizing SJG
to impose tariffs and allocate costs of constructing the pipeline.
5 A-1685-15T1
In addition, in June 2013, the Board granted SJG's petition for
issuance of an order finding that the proposed pipeline complied
with N.J.A.C. 14:7-1.4, a regulation that governs the siting of
natural gas pipelines, and requires compliance with certain
federal safety regulations.
On November 4, 2013, SJG filed a petition with the Board,
seeking an order pursuant to N.J.S.A. 40:55D-19, declaring that
the MLUL and any ordinance or regulation made under the authority
of the MLUL shall not apply to the proposed pipeline project (the
MLUL petition). The Board designated Commissioner Joseph L.
Fiordaliso to serve as hearing officer, and Commissioner
Fiordaliso thereafter held the first public hearing on SJG's MLUL
petition.
Meanwhile, the Commission's staff and the Board's staff
negotiated and drafted a memorandum of agreement (MOA), to allow
the project to be built in the Pinelands Area even though staff
had determined that it did not comply with the minimum standards
of the CMP. N.J.A.C. 7:50-4.52(c)(2) provides that the Commission
may enter into an intergovernmental agreement with any Federal,
State, or local government, that allows "such agency" to carry out
"specified development activities that may not be fully consistent
with" N.J.A.C. 7:50-5 (minimum standards for land use and
intensity), and N.J.A.C. 7:50-6 (management programs and minimum
6 A-1685-15T1
standards for development and land use in the Pinelands).1
On December 9, 2013, the Commission's staff held a public
hearing and accepted written comments on the completed draft MOA.
At the hearing, representatives from PPA and Sierra Club objected
to the project. Members of the public also submitted comments
opposing and supporting the project. In addition, four former
Governors — Governors Brendan T. Byrne, Thomas Kean, James J.
Florio, and Christine Todd Whitman - opposed the project, taking
the position that it would compromise the integrity of the CMP.
On January 3, 2014, Wittenberg issued a report recommending
that the Commission approve the MOA. She explained that the
project would serve two purposes: (1) permitting the repowering
of BLE; and (2) providing SJG with the ability to supply natural
gas to its customers in Atlantic and Cape May counties in
emergencies. At the Commission's meeting on January 10, 2014, the
Commission members considered a resolution authorizing Wittenberg
to execute the MOA.
The Commission has fifteen members. N.J.S.A. 13:18A-5(a).
Seven members voted in favor of the resolution, seven members
voted against it, and one member recused himself from voting on
1
It should be noted that although the proposed MOA was an agreement
between the Commission and the Board, it was SJG, not the Board,
which would be engaged in the "specified development" activity.
7 A-1685-15T1
the resolution. Because the Commission's by-laws provide that the
affirmative vote of eight members is required for the Commission
to take action on a motion or resolution, the MOA was not approved.
SJG thereafter filed a notice of appeal from the Commission's
failure to take action approving the MOA. In July 2014, DEP agreed
that RC would have until May 2017 to comply with its 2006 order.
In May 2015, SJG submitted a revised pipeline development
application to the Commission, along with additional information
intended to show that the pipeline could be built in the Forest
Area because it was "intended to primarily serve only the needs
of the Pinelands." N.J.A.C. 7:50-5.23(b)(12). SJG noted that the
project had been modified to reduce the impacts in the Forest Area
by prohibiting additional interconnections with the line and
relocating the interconnect point/regulator station out of the
Forest Area.
In addition, SJG replaced three miles of open-cut
installation with horizontal-directional drilling. SJG disclosed
its previously-confidential agreement with RC, which requires SJG
to provide RC an uninterrupted supply of natural gas to BLE for
at least 350 days per year. SJG also provided a report from PJM
Interconnection, L.L.C. (PJM), which stated that continued
operation of BLE was vital to the relevant service area.
In August 2015, the Commission's Director of Regulatory
8 A-1685-15T1
Programs found that the application was complete and issued a
Certificate of Filing (COF), which stated in part:
Based on review of the application, including
newly submitted information, materials in the
record and review of prior applications, the
applicant has demonstrated that the proposed
gas main is consistent with the permitted use
standards of the CMP. Specifically, the
proposed pipeline is designed to transport gas
to an existing facility, the [BLE] plant
(built in 1963) that is located in the
Pinelands.
Wittenberg advised the Commission that after the issuance of the
COF, SJG could continue its MLUL proceeding before the Board.
Wittenberg told the Commission that after the Board's proceedings,
staff would review the application another time to ensure
compliance with the CMP.
On August 21, 2015, Wittenberg wrote to the Board's Executive
Director and enclosed a copy of the COF. She requested copies of
any petitions that SJG filed with the Board regarding the pipeline
project, including SJG's previously-filed MLUL petition, all
associated hearing and meeting notices and transcripts, copies of
all staff reports, and any draft orders pertaining to SJG's
proposed pipeline project. In October 2015, Fiordaliso conducted
two more public hearings and an evidentiary hearing on the MLUL
petition. PPA was permitted to participate in the evidentiary
hearing.
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II.
In a letter dated December 14, 2015, Wittenberg informed the
Board's Executive Director that "[b]ased on [the] Pinelands
Commission['s] staff expertise and experience administering the
CMP and our review of the record, the prior finding of consistency
with the CMP in the [COF] issued on August 14, 2015 remains
unchanged." She noted that any order by the Board authorizing
SJG's installation of its pipeline had to be consistent with the
minimum standards in the CMP rules, since that development would
occur in the Pinelands Area.
Wittenberg reviewed the information she had received from the
Board and addressed the public's comments concerning the project's
consistency with the CMP. She rejected the claim that her staff's
initial finding that SJG's project was inconsistent with the CMP
standards in N.J.A.C. 7:50-5.23 could not be changed. Wittenberg
explained that SJG had revised its proposal by: (1) moving the
proposed interconnect point/regulator station from the Forest Area
and to Pinelands Village; and (2) adding a new provision limiting
the company's ability to connect new customers in the Forest Area.
SJG also had submitted new and updated information that
previously had not been available for review. She wrote:
Specifically, . . . the proposed pipeline
[will] be available to serve the [BLE] plant
95% of the time. The proposed project will
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also provide an ancillary benefit of providing
redundant gas service to those customers of
[SJG] who live both inside and outside of the
Pinelands Area during an operational upset.
Given that the primary purpose of the proposed
project is to provide gas to the [BLE] plant
95% of the time, a fact not available at the
time of the Executive Director's initial
decision, Commission staff found that the
[SJG] had demonstrated the project's
consistency with the Forest Area use standards
of the Pinelands CMP, i.e., that the proposed
project primarily serves only the needs of the
Pinelands by serving the needs of a facility
located in the Pinelands 95% of the time.
Wittenberg rejected the claim that SJG did not intend that
its proposed pipeline project would primarily serve to repower
BLE. She explained:
The Pinelands CMP at N.J.A.C. 7:50-5.23(b)12
permits the development of public service
infrastructure, which includes natural gas
transmission lines, within a Forest Area, if
such infrastructure is intended to primarily
serve only the needs of the Pinelands. The
term 'Pinelands' is defined by the Pinelands
CMP at N.J.A.C. 7:40-2.11 as including both
the Pinelands Natural Reserve and the
Pinelands Area. Consequently, the term
"Pinelands" is broader than the term
"Pinelands Area" which is defined by the
Pinelands CMP as the area designated as such
by Section 10(a) of the Pinelands Protection
Act.
Wittenberg concluded that SJG had demonstrated that its
proposed pipeline is consistent with the permitted use standards
of the CMP. She wrote that the pipeline is designed primarily to
transport gas to BLE, an existing facility located in the
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Pinelands. She found that the project is "intended to primarily
serve only the needs of the Pinelands," and was a permitted use
in the Forest Area, pursuant to N.J.A.C. 7:50-5.23(b)(12).
III.
On December 16, 2015, the Board issued its order on SJG's
MLUL petition. The Board reviewed all the evidence and testimony
of the numerous public comments including those provided by PPA,
the COF, and Wittenberg's December 14, 2015, consistency
determination. The Board noted that Wittenberg had concluded the
project was consistent with the minimum standards of the CMP. The
Board found that SJG had met its burden of proof under N.J.S.A.
40:55D-19, and had established that the project was reasonably
necessary for the service, convenience or welfare of the public.
The Board considered the need for the project, the pipeline
routing, and cost allocation. It found that: (1) conversion of BLE
from coal and oil to gas-fired generation provides an environmental
benefit; (2) continued operation of that plant would serve a need
for capacity in the area and provides a clean source of in-state
power in furtherance of New Jersey's Energy Master Plan ("EMP");
(3) the project would enhance the reliability of SJG's service
territories; and (4) there was no alternative route that would
have less adverse environmental impacts.
The Board also found that when the nearby Oyster Creek nuclear
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power plant is taken out of service in 2019, BLE will be the only
significant base-load power generating station in the coastal area
of Southern New Jersey. Repowering BLE will increase power
generation by thirty percent and reduce the production of
greenhouse gases, including nitrogen oxides and sulfur dioxide.
The Board rejected PPA's contentions that SJG's real
intention is to serve only its existing customers in Atlantic and
Cape May Counties, as evidenced by its statements that it would
pursue the project independently of the repowering of BLE, and
that SJG's pipeline and the repowering of BLE would not serve the
needs of the Pinelands.
The Board explained that, while it was "sensitive to the
alleged environmental, health and safety concerns raised by the
local residents," it was persuaded by the evidence that SJG "has
considered the environmental impacts of the [p]roject and has
committed to constructing the [p]ipeline guided by the goal of
minimizing those impacts where they cannot be avoided." The Board
noted that SJG's experts had analyzed the effect the alternative
routes would have on the environment and had selected the preferred
route based upon environmental-permitting considerations and DEP's
input.
PPA and Sierra Club thereafter filed their notices of appeal.
We consolidated the appeals, and also granted a motion by RC to
13 A-1685-15T1
intervene. In addition, we granted a motion by Governors Byrne,
Florio and Whitman to appear as amici curiae.
On appeal, PPA raises the following issues: (1) the Board and
the Commission's Executive Director lacked jurisdiction to review
the proposed project because the Commission had already declined
to approve it under the Pinelands Protection Act, N.J.S.A. 13:18A-1
to -58, and the CMP rules; (2) the Commission and its Executive
Director acted arbitrarily, capriciously, or contrary to law by
failing to adhere to its original finding that the proposed
pipeline violated the CMP; (3) the Commission erred by failing to
conduct any review and taking any action on the proposed pipeline
project; and (4) the Board acted arbitrarily, capriciously, or
contrary to law by approving SJG's petition pursuant to N.J.S.A.
40:55D-19.
In its appeals, Sierra Club argues: (1) the Board's decision
to grant SJG's MLUL petition was wrong as a matter of law: (2) the
Board's approval of the MLUL petition must be conditioned upon the
review and approval by the Commission of SJG's pipeline
application; (3) the Commission erred by failing to ensure that
all development in the Pinelands is consistent with the CMP;
(4) the Executive Director did not have authority to issue a COF
for the project and end Commission review; and (4) the Executive
14 A-1685-15T1
Director erred by finding that SJG's project was consistent with
the CMP.
IV.
PPA argues that the Executive Director did not have
jurisdiction or was precluded from issuing her December 14, 2015
consistency determination because: (1) the Commission's staff had
determined that the project, as initially proposed, did not comply
with the minimum standards of the CMP and SJG did not appeal that
determination; (2) the Commission refused to take action approving
the MOA, which would have allowed the project to proceed and SJG
had appealed that determination; and (3) the pending appeal
deprived the Commission and its staff from exercising any
jurisdiction with regard to the project until the appeal was
dismissed in May 2016. We find no merit in these arguments.
As we have explained, the Commission's staff initially
determined that SJG had not established that the project was
"intended to primarily serve only the needs of the Pinelands," as
required by N.J.A.C. 7:50-5.23(b)(12), and therefore could not be
constructed in the Forest Area. However, that was a decision on
SJG's first application, and it was based on the information that
was available at that time.
Furthermore, the Commission did not issue a decision finding
that the project, as initially proposed, did not meet the
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requirements of N.J.A.C. 7:50-5.23(b)(12). Although the Executive
Director recommended that the Commission approve an MOA with the
Board, based on the assumption that the project was not "intended
to primarily serve only the needs of the Pinelands," the Commission
never acted on the recommendation.
Thus, the decision by the Commission's staff on SJG's first
application, and the Commission's failure to act on the proposed
MOA did not preclude SJG from submitting a revised proposal, with
additional information intended to establish that the project met
the requirements of N.J.A.C. 7:50-5.23(b)(12). The second
application was, in fact, a new matter, which the agency had
authority to consider and act upon.
Moreover, SJG's appeal from the Commission's failure to
approve the proposed MOA did not preclude the Commission from
exercising its jurisdiction to review SJG's revised proposal. Rule
2:9-1(a) provides in part that "the supervision and control of the
proceedings on appeal" shall be in the Appellate Division "from
the time the appeal is taken[.]" The filing of an appeal generally
divests the trial court or agency of jurisdiction to act in the
matter under appeal, unless directed to do so by the appellate
court. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J.
366, 376 (1995).
16 A-1685-15T1
The "proceedings on appeal" in SJG's appeal related to the
Commission's failure to approve the MOA. SJG's second development
application was a separate matter. We are therefore convinced that
SJG's appeal did not divest the agency of jurisdiction to consider
the revised development proposal. See Gandolfi v. Town of
Hammonton, 367 N.J. Super. 527, 548 (App. Div. 2004) (noting that
planning board had jurisdiction to consider new subdivision
application despite pendency of appeal challenging prior denial
of the application because second application was entirely new).
PPA further argues that the Commission acted arbitrarily,
capriciously and unreasonably by failing to adhere to Wittenberg's
initial determination that the pipeline as initially proposed did
not comply with the CMP. PPA contends that the Commission is bound
by principles of collateral estoppel and res judicata from taking
a different position regarding the project's compliance with the
CMP. PPA asserts the revised proposal was essentially the same as
the initial proposal.
Again, we disagree. Collateral estoppel and res judicata do
not apply here because Wittenberg's determination pertained to the
first application, and the Commission never rendered a final
decision on that application. See Hennessey v. Winslow Township,
183 N.J. 593, 599 (2005) (noting that re-litigation of an issue
is precluded if the identical issue has been litigated and decided
17 A-1685-15T1
in a prior proceeding). Moreover, SJG revised its plan and
submitted additional information for the Commission's
consideration on the issue of CMP compliance.
PPA's arguments on these issues are without sufficient merit
to warrant further comment. R. 2:11-3(e)(1)(E).
V.
We turn to PPA's and Sierra Club's arguments that the
Executive Director did not have authority to render a final
decision on behalf of the Commission regarding the project's
compliance with the CMP. Amici curiae also argue that under the
Pinelands Act, the Commission was required to vote upon and
determine whether SJG's application complied with the minimum
standards of the CMP.
Section 502 of the National Parks and Recreation Act of 1978
(the Federal Act), 16 U.S.C.A. § 471i(c), created the Pinelands
National Reserve, which includes all or part of fifty-six
municipalities in seven southern New Jersey counties. The Federal
Act directed the Governor of New Jersey to establish a planning
agency to develop a CMP for the National Reserve. 16 U.S.C.A.
§ 471i(d). Governor Byrne thereafter established the Pinelands
Planning Commission. N.J. Exec. Order No. 71 (Feb. 8, 1979), Laws
of N.J. 1979, Vol. II, at 1897-1904.
18 A-1685-15T1
The Pinelands Act was subsequently enacted. It established
the Commission, N.J.S.A. 13:18A-4(a), and directed it to prepare
a CMP to which county and municipal master plans must conform,
N.J.S.A. 13:18A-8 to -10. The Act provided that the CMP must
include a program for its implementation "in a manner that will
insure the continued, uniform, and consistent protection of the
pinelands area in accord with the purposes and provisions of the
[state and federal legislation]." N.J.S.A. 13:18A-8(i).
The CMP applies to all development in the Pinelands Area.
N.J.A.C. 7:50-1.4. The CMP states in pertinent part that "[t]he
Commission bears the ultimate responsibility for implementing and
enforcing the provisions" of the Pinelands Act and the CMP.
N.J.A.C. 7:50-1.11. The CMP also states that the Executive Director
is the chief administrative officer of the Commission, and is
"charged with the administration and enforcement of" the CMP
subject to the Commission's approval of the Executive Director's
actions. N.J.A.C. 7:50-1.21(a).
The CMP sets forth procedures and standards for applications
for development in municipalities whose master plans have been
certified by the Commission. N.J.A.C. 7:50-4.31 to -4.42. In
general, for certified municipalities, the CMP provides that the
Executive Director shall initially review preliminary and final
municipal approvals for development within the Pinelands. N.J.A.C.
19 A-1685-15T1
7:50-4.37(a), -4.38(a), and -4.40(a). The CMP further provides
that the Commission may review and issue decisions with regard to
certain approvals. N.J.A.C. 7:50-4.38(b), -4.42, -4.91(a).
In addition, the CMP establishes procedures for so-called
coordinated permitting by State agencies. N.J.A.C. 7:50-4.81
to -4.85. The CMP states that
No department board, bureau, official or other
agency of the State of New Jersey shall issue
any approval, certificate, license, consent,
permit, or financial assistance for the
construction of any structure or the
disturbance of any land in the Pinelands Area
unless such approval or grant is consistent
with the minimum standards of [the CMP].
[N.J.A.C. 7:50-4.81(a).]
Before any application for development in the Pinelands Area
is filed with a State agency, the applicant must submit a copy of
the application to the Commission. N.J.A.C. 7:50-4.81(b). The
State agency should not consider the application unless the
Executive Director has issued a COF, a notice of filing, and a
certificate of completeness, or the Commission has approved an
application for public development. Ibid. The Executive Director
then determines
what, if any, special interests the Commission
has with respect to the application, the
extent to which the Commission staff should
participate in any proceedings held by the
state agency with which the application is to
be filed, and whether any Commission review
20 A-1685-15T1
provided for in this Plan should be conducted
before, after or simultaneously with any
proceedings to be conducted by the state
agency.
[N.J.A.C. 7:50-4.82(a).]
If the Executive Director finds that the State agency may
conduct its proceedings on the application "prior to or
simultaneously with any Commission review provided for in [the
CMP]," the Executive Director issues a COF, which indicates that
the application has been filed with the Commission and the
applicant is authorized to file the application with the State
agency. N.J.A.C. 7:50-4.82(b).
The Executive Director then determines the degree to which
Commission staff shall participate in the State agency
proceedings. N.J.S.A. 7:50-4.82(c). Such participation "may
include, but is not limited to
1. Submitting a written analysis of any
concerns and opinions the Commission staff has
with respect to the conformance of the
proposed development with the minimum
standards of the [CMP], including a list of
any conditions which it determines should be
imposed in the event that the permit is
granted;
2. Submitting written evidence with respect
to the conformance by the proposed development
with the minimum standards of [the CMP].
[N.J.A.C. 7:50-4.82(c).]
21 A-1685-15T1
The CMP does not, however, expressly provide that, in the
coordinated permitting process, the Commission may review a
determination by its staff or the Executive Director as to whether
a particular development plan meets the minimum standards of the
CMP. Furthermore, the CMP does not confer on the Executive Director
or the Commission's staff the authority to render final decisions
on CMP compliance in these circumstances. There also is no
provision in the Pinelands Act that confers upon the Executive
Director authority to render a final decision for the Commission
in the coordinated permitting process.
Here, the Commission retains final decision-making authority
as to whether SJG's proposed pipeline is consistent with the
minimum standards of CMP. Indeed, as we have pointed out, the CMP
states, "the Commission bears the ultimate responsibility for
implementing and enforcing the provisions" of the Pinelands Act
and the CMP. N.J.A.C. 7:50-1.11. The Commission therefore retains
"ultimate responsibility" under the CMP to review the proposed
project and render a final decision on CMP compliance.
On appeal, the Commission argues that N.J.S.A. 40:55D-19
provides sufficient authority for the Board to render a final
decision as to whether SJG's development proposal is consistent
with the CMP. The Commission points out that the Pinelands Act
states that
22 A-1685-15T1
no State approval, certificate, license,
consent, permit, or financial assistance for
the construction of any structure or the
disturbance of any land within [the Pinelands]
shall be granted unless such approval or grant
conforms to the provisions of [the CMP].
[N.J.S.A. 13:18A-10(c).]
However, in deciding whether to grant a petition brought
under N.J.S.A. 40:55D-19, the Board determines whether the MLUL
and local regulations adopted pursuant to the MLUL should be
waived. The Board's approval of any MLUL petition must be
consistent with the minimum standards of the CMP, but the Board
is not empowered to make that determination in the first instance.
In this matter, that decision must be made by the Commission,
pursuant to its authority under the Pinelands Act and the CMP.
We note that, in this matter, the Board did not make a factual
finding on the critical issue of whether SJG's pipeline is
"intended to primarily serve only the needs of the Pinelands" and
therefore a permitted use in the Forest Area. The Board merely
relied upon Wittenberg's decision on this issue, and on that basis,
its approval of SJG's MLUL petition complied with N.J.S.A. 13:18A-
10(c).
We therefore conclude that the matter must be remanded to the
Commission for further proceedings so that the Commission may
review the Executive Director's determination, in light of the
23 A-1685-15T1
objections that have been raised by PPA, the Sierra Club, and
amici curiae. The Commission shall determine whether to review the
Executive Director's decision based on the factual record
developed before the Board, or whether the parties should be
permitted to present additional evidence on the question of whether
the pipeline is consistent with the minimum standards of the CMP.
The Commission also shall determine whether to refer the
matter for a hearing before an Administrative Law Judge (ALJ). In
that regard, we note that, under the CMP's provisions for review
of development applications in municipalities with certified land
use regulations, the Commission may review a preliminary approval
if it raises substantial issues of CMP compliance. N.J.A.C. 7:50-
4.37(a)-(b).
If so, the Executive Director must give notice of the staff's
determination to the applicant, local permitting agency, and any
interested persons. N.J.A.C. 7:50-4.37(b). The applicant, local
permitting agency, and any interested persons may request a hearing
before an ALJ. Ibid. Thereafter, the Commission may issue a final
decision on the matter. N.J.A.C. 7:50-4.91(e).
The Commission shall consider whether the same or similar
procedures should be followed in reviewing Wittenberg's decision.
See In re Application of John Madin, 201 N.J. Super. 105, 128-34
(App. Div.) (holding that municipalities whose development
24 A-1685-15T1
ordinances have not been certified by the Commission are entitled
to an evidentiary hearing on the grant of development approval),
certif. granted, 102 N.J. 380 (1985), certif. vacated, 103 N.J.
689 (1986). Moreover, the public should be afforded notice and the
opportunity to be heard before the Commission renders a final
decision on the application. Id. at 135-36.
In view of our decision, we need not address the other issues
raised by the parties concerning the merits of Wittenberg's
decision.
VI.
PPA argues that the Board did not have jurisdiction to
consider SJG's MLUL petition. It also argues that the Board acted
arbitrarily, capriciously and contrary to law in approving SJG's
MLUL petition. PPA contends the record does not support the Board's
determination that the pipeline is "reasonably necessary for the
service, convenience, or welfare of the public," as required by
N.J.S.A. 40:55D-19. We disagree.
PPA contends that the Board did not have jurisdiction to
review SJG's MLUL petition because SJG previously had appealed the
Commission's failure to approve the MOA for the project. We
disagree with this contention for essentially the same reasons
stated previously regarding PPA's contention that the appeal
precluded the Commission from considering SJG's revised
25 A-1685-15T1
application. The MOA and SJG's MLUL petition both pertained to the
pipeline, but these were separate matters before State agencies,
each with its own statutory responsibilities. We conclude the
Board had jurisdiction to review and act upon SJG's petition.
We turn to PPA's challenge to the Board's decision. The scope
of review of the final determination of an administrative agency
is limited. In re Carter, 191 N.J. 474, 482 (2007). An agency's
decision will be affirmed "unless there is a clear showing that
it is arbitrary, capricious, or unreasonable, or that it lacks
fair support in the record." In re Herrmann, 192 N.J. 19, 28
(2007). In reviewing an administrative agency's decision, we will
grant considerable deference to the agency's expertise, where such
expertise is a relevant factor. Campbell v. N.J. Racing Comm'n,
169 N.J. 579, 588 (2001).
Here, SJG petitioned the Board for waiver of the MLUL and
local government MLUL regulations and approvals pursuant to
N.J.S.A. 40:55D-19, which requires the Board to find that
the present or proposed use by the public
utility . . . is necessary for the service,
convenience or welfare of the public . . . and
that no alternative site or sites are
reasonably available to achieve an equivalent
public benefit, the public utility . . . may
proceed in accordance with such decision of
the [Board], any ordinance or regulation made
under the authority of this act
notwithstanding.
26 A-1685-15T1
In making its determination, the Board must consider the
site, the community zoning plan and zoning ordinances, the physical
characteristics of the plot, and the surrounding neighborhood. In
re Pub. Serv. Elec. & Gas Co., 35 N.J. 358, 377 (1961). When
determining reasonable necessity, the Board must consider
alternative sites and their advantages and disadvantages,
including their costs. Ibid. The Board also must weigh all of the
parties' interests, and where those interests are equally
balanced, it must give the utility preference in light of the
Legislature's clear intent that the broad public interest to be
served is greater than local considerations. In re Monmouth Consol.
Water Co., 47 N.J. 251, 258 (1966); Pub. Serv., supra, 35 N.J. at
377.
Here, the Board considered the relevant factors, and there
is sufficient credible evidence to support its finding that SJG
had shown that the project is "reasonably necessary for the
service, convenience or welfare of the public." N.J.S.A. 40:55D-
19. The Board found that the "dedicated line" is reasonably
necessary and would serve the goals of the EMP, one of which is
to expand in-state resources fueled by natural gas. The Board
determined that there is a need for electric-generating capacity
in the area of BLE, noting that the Oyster Creek nuclear power
plant in Southern New Jersey will be retired in 2019.
27 A-1685-15T1
The Board noted that BLE will be the only significant base-
load power generating station in the coastal area of Southern New
Jersey. The Board also found that the "dedicated line" will cause
a "significant improvement" in air quality in the region, by
reducing the production of greenhouse gases, nitrogen oxides, and
sulfur dioxide.
In addition, the Board found that the "reliability line" will
enhance SJG's ability to provide reliable natural gas service to
its customers. The Board noted that presently a single, twenty-
mile-long pipeline services 60,000 SJG customers in Cape May
County, and a disruption anywhere along this line could jeopardize
service to these customers. The Board also noted that there is no
other location in SJG's system with "a single upset vulnerability"
of this magnitude.
PPA argues that the Board's decision unlawfully waives the
pipeline's need to comply with the CMP. We do not agree. As noted
previously, N.J.A.C. 7:50-4.81 mandates that no State agency may
grant approval, license, or financial assistance for any
construction or disturbance in the Pinelands "unless such approval
or grant is consistent with the minimum standards of the [CMP]."
Here, the Board's order does not state that the pipeline is
not subject to the Pinelands Act or the CMP. Indeed, the Board's
decision correctly recognizes that the pipeline must be consistent
28 A-1685-15T1
with the minimum standards of the CMP. Thus, there is no merit to
PPA's contention that the Board has waived compliance with the
Pinelands Act and the CMP.
PPA further argues that the Board could not lawfully find
that the project conforms to the CMP. PPA contends that the record
shows that the pipeline is not "intended to primarily serve only
the needs of the Pinelands." We note, however, that the Board did
not make its own findings as to whether the project complies with
the CMP. The Board merely took note of Wittenberg's determination
of December 14, 2015, and relied upon that determination as a
basis for concluding that the project met the minimum standards
of the CMP. As we have determined, Wittenberg's decision must be
reviewed by the Commission and the Commission must decide whether
the project complies with the CMP.
PPA also contends that the record does not support the Board's
decision that the pipeline furthers the goals of the EMP. PPA
asserts the evidence does not show that the pipeline will result
in a significant improvement in air quality and other positive
environmental impacts. PPA also asserts that while the EMP
encourages the use of "clean" energy sources like natural gas, the
proposed pipeline violates the Pinelands Act and CMP, and the
repowering of BLE is not necessary to ensure the reliability of
the natural gas supply to SJG's customers in Southern New Jersey.
29 A-1685-15T1
PPA's arguments lack sufficient merit to warrant discussion
in this opinion. R. 2:11-3(e)(1)(E). Suffice it to say, however,
there is sufficient credible evidence in the record to support the
Board's findings on these issues, and PPA has provided no basis
for this court to second-guess the Board's considered judgment
that the pipeline furthers the goals of the EMP and is reasonably
necessary for the service, convenience or welfare of the public.
On appeal, Sierra Club contends that the Board's decision
waiving municipal approvals was wrong as a matter of law. Sierra
Club contends that N.J.S.A. 40:55D-19 does not apply to Pinelands-
based reviews and ordinances, and that the Board had no authority
to override any local approval that is otherwise required by the
Pinelands Act and any ordinances authorized and adopted under that
Act. We are not persuaded by this argument.
By its plain language, N.J.S.A. 40:55D-19 gives the Board the
authority to waive the MLUL and any local ordinance or regulation
adopted pursuant to the MLUL. The Board's authority under N.J.S.A.
40:55D-19 necessarily includes the power to waive any MLUL review
of approvals by municipalities in the Pinelands. The Pinelands Act
does not limit the exercise of this power. However, as the Board
recognized in its final decision, any development project for
which local MLUL regulation is waived pursuant to N.J.S.A. 40:55D-
30 A-1685-15T1
19 remains subject to the Pinelands Act and the minimum standards
of the CMP.
Sierra Club also contends that the Board erred by relying
upon Wittenberg's December 14, 2015 determination as a basis for
its understanding that the project is consistent with the minimum
standards of the CMP. As stated previously, Wittenberg was not
authorized to render a final consistency determination regarding
the project, and the matter will be remanded so that the Commission
can render a final decision on that issue.
We therefore conclude that the Board's reliance upon
Wittenberg's determination was misplaced. Consequently, the
Board's December 16, 2015 order must be amended to state that
approval of SJG's MLUL petition shall be conditioned upon issuance
of a final decision by the Commission finding that the pipeline
project meets the minimum standards of the CMP.
In view of our determination, we need not address the other
issues raised by PPA, Sierra Club or amici curiae.
Accordingly, we remand Executive Director Wittenberg's
December 14, 2015 determination to the Commission for further
proceedings in conformity with this opinion. We also remand the
matter to the Board for entry of a modified order, stating that
the approval of SJG's petition under N.J.S.A. 40:55D-19 is
conditioned upon the Commission's issuance of a final
31 A-1685-15T1
determination finding that the pipeline project meets the minimum
standards of the CMP. In all other respects, the Board's decision
and order of December 16, 2015, is affirmed.
The Board's final decision is affirmed in part, and remanded
in part for entry of an amended order of approval. In addition,
Executive Director Wittenberg's decision is remanded to the
Pinelands Commission for further proceedings in accordance with
this opinion. We do not retain jurisdiction.
32 A-1685-15T1