Petitioner/Plaintiff Greenidge Generation LLC (hereinafter, "Greenidge") brings this combined Civil Practice Law and Rules ("CPLR") §§ 3001 and 7801 et seq. action/proceeding for declaratory and injunctive relief challenging New York State Department of Environmental Conservation and Acting Commissioner Sean Mahar's (collectively, "DEC") May 8, 2024 Decision of the Regional Director denying ("Final Denial"; NYSCEF doc. 21) Greenidge's application to renew its Clean Air Act Title V permit for the Greenidge Generating Station located in Torrey, New York.

In its Final Denial, DEC concluded the Climate Leadership and Community Protection Act ("CLCPA") § 7(2) "authorizes an agency to deny a permit application based upon a finding that granting the permit would be inconsistent with or would interfere with the attainment of statewide greenhouse gas ["GHG"] limits" (id. at 16), made such a finding, and denied renewal of Greenidge's Title V permit.

Pending before the Court are two applications: (1) Greenidge's Order to Show Cause seeking a temporary restraining order ("TRO") and preliminary injunction enjoining DEC from requiring Greenidge relinquish its Title V permit and cease operation of Greenidge Generating Station and (2) the Petition and Complaint itself. Respondents/Defendants answered and opposed both applications and Respondents/Intervenors opposed both applications. Several non-parties were granted leave to file amicus curie briefs.

After considering the parties' arguments and submissions (pursuant to CPLR § 2219[a], the specific papers considered were NYSCEF documents 1-45, 66-80, 97-104, 106, 108-122, [*2]128-147, and 150-153) and the relevant law, the following constitutes the Decision, Order, and Judgment of the Court on the Petition and Verified Complaint and Motion for a Temporary Restraining Order and Preliminary Injunction.

Greenidge Generating Station ("Facility") is a power plant located in Torrey, New York (AR 1368)^[FN1] . Built in the 1930's, the Facility originally operated multiple coal-fired power generation units (id.). Unit 4 was installed in 1953 (id.). Coal-fired units emit GHGs, and in 1990, the Facility emitted 3,206,800 tons of carbon dioxide equivalent ("CO²e") emissions (AR 410).

In March of 2011, the Facility closed and ceased emitting GHGs. Its owners put the Facility into temporary protective layup, and relinquished its Title V permit in 2012 (AR 1368).

In October 2012, Greenidge, then known as GMMM Greenidge, LLC, purchased the Facility. Greenidge set into motion a plan to resume power generation at the Facility using 100% natural gas, with up to 19% biomass co-firing (Irwin Aff., NYSCEF doc. 31). To that end, construction began on the Unit 4 boiler which allowed it to operate on 100% natural gas, with up to 19% biomass co-firing (id.). A 4.6-mile natural gas pipeline was built from the Facility to the Empire Connector main natural gas supply line (id.). Other construction included, among other things, auxiliary services such as a meter station and a regulation station. Total construction costs exceeded $12,000,000 (id.).

Unit 4 at the Facility was brought back online as a 107 megawatt ("MW") generating unit and resumed operations in March of 2017 (id.). With the reactivation, the Facility resumed emitting GHGs (those emissions detailed, infra). The Facility provided wholesale electricity to the power grid as called upon by the New York Independent System Operator ("NYISO"), the organization tasked with managing the power grid and ensuring the reliable supply of electricity to consumers (Irwin Aff., NYSCEF doc. 31).

In 2019, Greenidge added cryptocurrency mining to the Facility (id.). Cryptocurrency mining is the process by which cryptocurrency is made. This process demands significant amounts of electricity to power their operation (id.). Greenidge's cryptocurrency operations used power from the Facility before reaching the power grid, usage that is referred to as behind-the-meter (id.).

An annual breakdown of electricity generated by the Facility, where it went, and the Facility's CO²e emissions is cached at https://www.nycourts.gov/reporter/webdocs/GreenidgeGenerationLLCvNewYorkStateDeptofEnvtlConservation-FacilityAnnualBreakdown.pdf.

At all times since reactivation in 2017, the Facility provided a minimum of 7 MW of electricity to the grid (Irwin Aff., NYSCEF doc. 31). NYSIO called upon the Facility to generate additional electricity for the grid on many occasions, notably during winter storms in December of 2022 (id.). In March 2023, Greenidge requested that NYSIO allow the Facility to be [*3]temporarily shut down for maintenance (id.). NYSIO denied the request because there was not a sufficient power supply available during the planned outage, thus risking system reliability (id.).

In 2019, New York enacted the CPCPA (see L 2019, ch 106) with the stated purpose "to adopt measures to put the state on a path to reduce statewide greenhouse gas emissions" (see Bill S6599, Purpose of Bill).

To that end and relevant to the matter at hand, the CLCPA tasked DEC with establishing GHG statewide emission reductions using 1990 GHG emissions as a baseline; specifically a 40% reduction by 2030 and an 85% reduction by 2050 (Environmental Conservation Law ["ECL"] § 75-0107[1]). These limits were later reflected in DEC's regulations concerning climate change (6 New York Codes, Rules and Regulations ["NYCRR"] 496). Relatedly, the CPCLA created the statewide requirement that by 2030, 70% of energy production be from renewable sources and that all electricity uses have zero emissions by 2040, and tasked the Public Service Commission ("PSC") establish a program to accomplish this (Public Service Law ["PSL"] § 66-2[p]).

The CLCPA directed state agencies to "assess and implement strategies to reduce their GHG emissions" (CLCPA § 7[1]) and

[i]n considering and issuing permits, [. . .], all state agencies [. . .] shall consider whether such decisions are inconsistent with or will interfere with the attainment of the statewide [GHG] emissions limits established in article 75 of the [ECL]. Where such decisions are deemed to be inconsistent with or will interfere with the attainment of the statewide [GHG] emissions limits, each agency [. . .] shall provide a detailed statement of justification as to why such limits/criteria may not be met, and identify alternatives or [GHG] mitigation measures to be required where such project is located

(CLCPA § 7[2] [emphasis added to highlight what will be used as shorthand for the three elements]). Further, when issuing a permit, an agency "shall not disproportionately burden disadvantaged communities" (CLCPA § 7[3]).

Under the CLCPA, DEC's regulatory response to achieve GHG emission reductions is directed by, inter alia, ECL § 75-0109, which included the requirements that the DEC promulgate regulations that "[i]nclude legally enforceable emissions limits, performance standards, or measures or other requirements to control emissions from [GHG] emission sources" and must reflect the findings of the "Scoping Plan."

The Scoping Plan is authored by the Climate Action Council ("CAC"), and it "shall identify and make recommendations on regulatory measures and other state actions that will ensure the attainment of the statewide [GHG] emissions limits" (ECL § 75-0103[13]).

On December 19, 2022, the CAC adopted the Scoping Plan (Scoping Plan [Dec. 2022], https://climate.ny.gov/resources/scoping-plan/ [last accessed November 13, 2024]). Under the Scoping Plan, "any retirement and/or repurposing of existing fossil fuel generation must be done in coordination with the PSC, the NYISO planning process, the required reviews under Section 7(2) and 7(3) of the Climate Act, and consistent with New York State Reliability Council criteria" (id. at 226).

The Scoping Plan called for a detailed process for the retirement and/or re-purposing of fossil fuel fired facilities "to ensure that the fossil fuel generators are gradually and safely retired [*4]while still maintaining reliability" (id. at 227). This process should be informed by studies like the "NYSIO Reliability Needs Assessment" and "Comprehensive Reliability Plan" (id.). Where studies show reliability needs or risks exist, "zero-emission solutions should be fully explored, such as storage, transmission upgrades or construction, energy efficiency, demand response, or another zero-emission, dispatchable resource" (id.). "Only after these zero-emission and alternative fuel resources are fully analyzed and determined to not be able to reasonably solve the identified grid reliability need shall retention of existing or construction of new or repowered fossil fuel-fired generation facilities be considered" (id.).

On December 14, 2022, DEC issued two policy documents to address the CLCPA's effect and increase consistency of application (NYSCEF doc. 96, at 7), "The Commissioner's Policy on Climate Change and DEC Action" ("CP-49") (New York State Department of Environmental Conservation, "Climate Change and DEC Action" [CP-49] [Dec. 14, 2022]; NYSCEF doc. 6) and a DEC Division of Air Resources' publication concerning the CLCPA and air permit applications (New York State Department of Environmental Conservation, "The Climate Leadership and Community Protection Act and Air Permit Applications" [DAR-21] [Dec. 14, 2022]; NYSCEF doc. 7)

CP-49 is a document originally issued October 22, 2010, and was revised in December 2022 to reflect new requirements under the CLCPA. It was issued under the authority of then-DEC Commissioner Basil Seggos.

CP-49 created frameworks for DEC to carry out the analysis required by CLCPA § 7(2). Because the revised CP-49 was issued before the Scoping Plan and before regulations implementing the CLCPA and Scoping Plan, it called for a "phased-in approach when applying CLCPA Section 7(2) and for agency decisions to be reviewed in the context of the current phase of CLCPA implementation" (NYSCEF doc. 6, at 7). The phases were:

• January 1, 2020 until Scoping Plan completion (required to be complete by January 1, 2023) - Guided by consistency with Part 496 Statewide GHG Emission Limit and the CLCPA Annual GHG Emissions Inventory

• After Scoping Plan but before regulations are effective (required to be promulgated by January 1, 2024) - Guided by consistency with Part 496 Statewide GHG Emission Limit, CLCPA Annual GHG Emissions Inventory, and the policies and programs included in the Scoping Plan

• After Department regulations implementing the CLCPA are adopted - Guided by consistency with Part 496 Statewide GHG Emission Limit, CLCPA Annual GHG Emissions Inventory, the policies and programs included in the Scoping Plan, State Energy Plan, and implementation regulations by DEC or other agencies

With respect to evaluating consistency with GHG emission limits, CP-49 said

[a]lthough it is a fact-specific inquiry, in evaluating whether an administrative decision may be inconsistent or interfere with the Statewide Emission Limits, the Department should consider if the decision enables a new source of GHG emissions; increases a source's permitted or potential GHG emissions; or allows a reasonably expected increase in actual GHG emissions above levels that existed prior to a permit application or [*5]decision at issue.

(id.). It further elaborated, "[r]outine permit renewals that would not lead to an increase in actual or potential GHG emissions would ordinarily be considered consistent with the CLCPA pending finalization of the Scoping Plan, the subsequent adoption of a state energy plan, and future regulations unless project specific facts support a finding of inconsistency" (id.).

If granting a permit would be "inconsistent", "a statement of justification must be created to proceed with a decision. If a justification is not available, then the Department need not reach the next stage of the CLCPA Section 7(2) analysis regarding alternatives or GHG mitigation" (id. at 8).

The second policy document, DAR-21, created a policy "to provide guidance for applicants and DEC staff when preparing and reviewing CLCPA analyses submitted to DEC in support of air pollution control permit applications" (NYSCEF doc. 7, at 2).

Consistency with GHG emission limits was discussed with emphasis on the "facts surrounding the project itself" and went on to list potential causes of interference and inconsistency such as

• The project does not conform with the Scoping Plan or regulations designed to achieve compliance with the Statewide emission limits established in ECL Article 75 and reflected in Part 496;

• The project creates or enables a significant new source of GHG emissions;

• The project will be directly responsible for a significant increase in demand for a known source of GHG emissions;

• The project directly reduces the market demand for, or access to, GHG emissions reduction technologies or strategies;

• The project prevents or makes it more difficult or expensive for the State to reduce GHG emissions;

• The project facilitates the expanded or continued use of fossil fuels through new infrastructure development; and/or

• The project interferes with the attainment of the zero-emissions electric generation sector by 2040 requirement.

With a finding of inconsistency or interference, "DEC must consider whether sufficient justification for the project exists. If so, a statement of justification must be created before issuing a final decision on the application" (id.). DAR-21 then goes on to spell out specifics that must be in such a "statement of justification" and lists "potential examples of acceptable justifications" (id. at 7).

DEC issues Title V air permits (ECL § 19-0311[1]) pursuant to federally-delegated authority in the Clean Air Act (42 U.S.C. § 7661a[d][1]). A Title V permit itself is an authorization for a major stationary source, like a power plant, to emit a certain quantity of air pollutant.

In 2016, DEC issued Greenidge a Title V permit, authorizing emissions of up to 582,525.5 tons of CO²e annually (AR 413, 437). The permit had a five-year term, which was set [*6]to expire September 6, 2021 (AR 2). State Administrative Procedure Act ("APA") § 401(2) sets forth that an existing permit expires on the later of its designated term or when an agency finally determines an application for renewal.

Greenidge began the process of applying for renewal of its Title V in October of 2020 (AR206), and submitted its completed application ("Renewal Application") to DEC on March 5, 2021 (AR 210-365). An application for renewal is "subject to the same procedural and review requirements [. . .] that apply to initial permit issuance" (6 NYCRR 201-6.6[a][1]). Greenidge's Renewal Application sought no significant changes to its existing permit, including the GHG emissions limits (id.).

In late-March 2021, DEC and a representative of Greenidge exchanged email correspondence concerning the CLCPA and its effect on Title V permitting (AR 367-393). Michael S. Wheeler, a Professional Engineer for DEC wrote, "The CLCPA policy is being formed as we speak and changes quite often nin [sic] it's [sic] infancy" (AR 369). In his email to Greenidge's representative, he attached, inter alia, a two-page document titled "DAR Technical Guidance Memo" focused on how applicants can provide an objective analysis of CO²e emissions for DEC to evaluate in the context of CLCPA § 7(2)'s inconsistency element (AR 371-372).

DEC issued a Notice of Incomplete Application May 3, 2021, which called for Greenidge to provide projections of future CO²e as well as historical data from 2015 on (AR 394-396). On June 30, 2021, these requests were reiterated and supplemented with a request for information about how much behind-the-meter electricity was generated for cryptomining annually (AR 398-405).

Greenidge responded by letter dated August 2, 2021. In that letter, Greenidge provided historical emissions data (described in section [A], supra) and estimated its emissions annually for the five year term of the proposed renewed permit to be 520,386 metric tons of CO²e from onsite combustion and 432,572 metric tons of CO²e in upstream emissions each year. Greenidge also provided historical data on where the electricity generated by the Facility went (also described in section [A], supra) (AR 407-419).

On September 8, 2021 DEC issued a Notice of Complete Application, Availability of Draft Permits and Announcement of Virtual Legislative Public Comment Hearings ("NOCA"). The NOCA advised that "[t]here are substantial greenhouse gas emissions which are currently associated with the existing and proposed uses at the Facility. Based on the information currently available, at this time [Greenidge] has not demonstrated sufficient compliance with the requirements of the Climate Act" and it further noted that DEC "anticipates that additional GHG mitigation measures will likely be necessary to meet the requirements of the Climate Act, should a final permit be issued for the Facility" (AR 815-816). With the NOCA, DEC issued a draft of a renewed Title V permit (AR 688-787) as well as a Permit Review Report (AR 788-813). The Permit Review Report summarized the Renewal Application as "essentially unchanged from the existing permit. The renewal application and draft permit do not request or allow any additional emissions" (id.).

Based on the foregoing, public comments were received, a majority of which were against the renewal of Greenidge's Title V permit (AR 838-1196, 1201-1358).

In a letter dated March 25, 2022, Greenidge laid out a "Proposed Mitigation Package" [*7]which offered two binding conditions in a renewed permit:

• A binding condition that requires a 40% reduction in GHG emissions from our current permitted level by the end of 2025 - a full five (5) years before the CLCPA 's statewide target date of 2030; and

• A requirement that Greenidge be a zero-carbon emitting power generation facility by 2035 - a full five (5) years before the statewide target for the electric generating sector found in Public Service Law§ 66-p

DEC staff denied the renewal application by letter June 30, 2022 ("Staff Denial"). In the letter, DEC staff interpreted CLCPA § 7(2) to have three elements:

First, as is relevant here for purposes of the Department's review of the Application, the Department must consider whether the renewal of a Title V permit for the Facility would be inconsistent with or interfere with the attainment of the Statewide GHG emission limits established in ECL Article 75.

Second, if the renewal of a Title V permit for the Facility would be inconsistent with or would interfere with the Statewide GHG emission limits, then the Department must also provide a detailed statement of justification for the continued operation of the Facility notwithstanding the inconsistency.

Third, in the event a justification is available, the Department would also have to identify alternatives or GHG mitigation measures to be required for the Facility

Applying those elements, the Staff Denial concluded "the Facility's continued operation in its current manner would be inconsistent with or interfere with the attainment of the Statewide GHG emission limits" (AR 1374), citing increased GHG emissions since the Title V permit was issued in 2016 and since the CLCPA became effective, attributed the increase in the GHG emissions to the Facility's shift to cryptocurrency mining, and determined that renewal would allow increases in actual GHG emissions (id.).

DEC staff then considered the next element of CLCPA § 7(2), noting "a permitting action's consistency - or lack thereof - with the Climate Act's Statewide GHG emission limits is only the first of three elements set forth in Section 7(2)," and that evaluating this permitting action, "given that renewal of the Facility's Title V air permit would be inconsistent with or would interfere with the attainment of the Statewide GHG emission limits, the Department may only renew the Title V air permit for the Facility if it can satisfy these other required elements of Section 7(2)" (AR 1382).

In applying the second element of CLCPA § 7(2), DEC staff concluded Greenidge did "not provide the Department with any information to support a justification in the event of a finding of inconsistency, as is the case here, such as whether cryptocurrency mining operations in and of themselves could be necessary or could provide any economic or social utility for the State" (id.). The decision also elaborated that Greenidge had "not provided any electric system reliability or other ongoing need for the Facility" (AR 1368).

Absent a justification at the second element of CLCPA § 7(2), DEC staff determined the [*8]third element, mitigation and alternatives, need not be considered (AR 1384). Nonetheless, DEC staff evaluated mitigation and alternatives and concluded:

Greenidge failed to offer a serious plan to transition away from its current and exclusive reliance on natural gas for its cryptocurrency mining operations. Such a plan might have included a schedule for transitioning to renewable energy generation or a timeline for obtaining an increasing percentage of its power used for cryptocurrency mining from the electrical grid, if not more directly from the addition of onsite renewable energy sources

Lastly, DEC staff considered CLCPA § 7(3), whether granting the Renewal Application would disproportionately burden disadvantaged communities, and concluded that DEC "cannot ensure that renewal of the Title V permit for the Facility would comply with the statutory requirements of Climate Act Section 7(3)" (AR 1386).

On July 28, 2022, Greenidge sought an adjudicatory hearing challenging the Staff Denial (AR 1387-1389). DEC referred the request to the Chief Administrative Law Judge of the Office of Hearings and Mediation Services (AR 1394). Then-DEC Commissioner delegated decision-making authority concerning this matter to Dereth B. Glance, Deputy Commissioner for Environmental Remediation and Materials Management (AR 1395).

Before an Administrative Law Judge ("ALJ"), a two-day issues conference was held, which led to the ALJ's Issues Ruling on September 22, 2023 (AR 2269-2337). The Issues Ruling granted party status to Intervenors herein and Fossil Free Tompkins, who raised four issues therein, one of which—whether renewal would run afoul of CLCPA § 7(3)'s prohibition of disproportionally burdening disadvantaged communities—was advanced to adjudication (id.). The Intervenors and Fossil Free Tompkins also moved for summary judgment, which the ALJ denied (id.).

Greenidge raised 21 issues, two of which were advanced to adjudication: (1) whether there is justification for renewal notwithstanding inconsistency with GHG emissions limits and (2) whether there are alternatives or GHG emission mitigation measures that would lessen or eliminate the inconsistency or interference with the GHG emissions limits (id.).

With respect to advancing justification to adjudication, the ALJ offered that "the record needs to be developed" and that

[a]though Greenidge did not provide any basis for justification, staff did not specifically request it during the application process. The CLCPA was a new law and public guidance was released in draft form after Greenidge submitted its application. Greenidge may not have been able to anticipate what DEC required to establish justification without a specific request for the information, which was authorized under 6 NYCRR 621.14(b) [. . .] Since that information was not requested during the application process, Greenidge may present evidence of justification at the hearing, if any such evidence exists.

Greenidge and Intervenors with Fossil Free Tompkins appealed the Issues Ruling to the [*9]DEC Commissioner's designee, and replied to each other's appeal (AR 2339-2592, 2593-2869, 2891-2934). DEC staff replied to Greenidge's appeal (AR 2870-2890).

On May 8, 2024, Regional Director Glance issued a decision ("Final Denial"; AR 2935-2966) that reversed the ALJ's determination that there were three adjudicable issues and found no issues adjudicable, which ended the DEC's administrative review of the Renewal Application.

The Final Denial disagreed with Greenidge's position and concluded that CLCPA § 7(2) granted DEC the authority to deny permit renewal application if granting the application would be inconsistent or interfere with the GHG emissions limits (AR 2592-2594). The Final Denial affirmed the ALJ's ruling on the issue of inconsistency/interference, both substantively and that the issue was not adjudicable (AR 2957-2958).

With respect to justification, the Final Denial concluded "Department staff did not determine [. . .] that it would grant the application notwithstanding the inconsistency with the CLCPA, and staff was not required to make a statement of justification and identify alternatives or mitigation measures. For that reason, I find it unnecessary to adjudicate those issues in this proceeding" (AR 2961).

Similarly, with respect to CLCPA § 7(3), the Final Denial opined "the outcome of any adjudication of this issue would, at most, provide an additional basis for denial of Greenidge's application. [. . .] I conclude that it is unnecessary to adjudicate this additional issue under CLCPA § 7(3)" (AR 2964).

The Final Decision also concluded that Greenidge failed to meet its burden under 6 NYCRR 624.9(b)(3) to advance any issues to adjudication (AR 2962).

This litigation was commenced August 15, 2024 by the filing of Greenidge's verified Petition and Complaint (NYSCEF doc. 1; "Petition"). In the Petition, Greenidge brings six claims, denominated as "counts" seeking:

(1) Annulment of DEC's Final Denial under CPLR §§ 7801 et seq. because DEC lacks the authority to deny Greenidge's permit renewal application under CLCPA § 7(2);

(2) Annulment of DEC's Final Denial under CPLR §§ 7801 et seq. because DEC failed to assess justification and alternatives/mitigation as required by CLCPA § 7(2);

(3) Annulment of DEC's Final Denial under CPLR §§ 7801 et seq. because the Final Denial was based on improper policymaking under the guise of a CLCPA § 7(2) justification analysis;

(4) Annulment of DEC's Final Denial under CPLR §§ 7801 et seq. because DEC's consistency determination was arbitrary and capricious;

(5) Annulment of DEC's Final Denial under CPLR §§ 7801 et seq. because DEC's interpretation of CLCPA § 7(2) is in error of law as it would render CLCPA § 7(2) in violation of the Supremacy Clause;

(6) A series of ten declaratory judgments pursuant to CPLR § 3001 concerning CLCPA § 7(2) and DEC's application of CLCPA § 7(2)

Five days later on August 20, 2024, Greenidge brought a motion by way of an order to show cause seeking a TRO and preliminary injunction to prevent DEC from requiring Greenidge to relinquish its Title V permit or cease operations of the Facility. That same day, the Supreme [*10]Court (Cook, J.) signed the Order to Show Cause, making it returnable September 3, 2024 and preventing DEC from requiring Greenidge relinquish its Title V permit or cease operations of the Facility pending a hearing and determination (NYSCEF doc. 45). Shortly thereafter, the Supreme Court (Cook, J.) recused, and this Court was assigned the matter.

Greenidge and DEC stipulated on August 23, 2024 that Greenidge "need not cease operations of any air contamination sources located at the Facility, render such air contamination sources inoperable, or relinquish the Title V are permit until November 1, 2024" (NYSCEF doc. 66), and by subsequent agreement set forth at oral argument on October 29, 2024, extended the November 1 deadline to November 14, 2024.

Greenidge and DEC further stipulated to a briefing schedule for the Petition and Order to Show Cause, and requested the Court set the return date for both during the week of October 28, 2024. The Court agreed, and scheduled the return date and oral argument for October 29, 2024.

DEC timely filed their Answer (NYSCEF doc. 95) along with the Administrative Record (NYSCEF docs. 98-102) pursuant to CPLR § 7804(e) on October 10, 2024. DEC's Answer called for the Court to deny the Petition, and raised objections in points of law pursuant to CPLR § 7804(f). DEC's objections asked the Court to convert Greenidge's declaratory judgment claim into a proceeding reviewable under CPLR §§ 7801 et seq. pursuant to CPLR § 103, and argued that Greenidge failed to exhaust its administrative remedies by not arguing their Supremacy Clause claim in administrative proceedings before the DEC.

Seneca Lake Guardian, The Committee to Preserve the Finger Lakes, and Sierra Club (collectively, "Intervenors") moved this Court for an order granting them status as intervenors, which was granted on September 17, 2024. Intervenors opposed Greenidge's Petition, and though not explicitly couched as an objection in a point of law, also argued Greenidge's declaratory judgment claim must be converted pursuant to CPLR § 103.

CPLR § 7803[3] allows a court to annul a governmental action when a determination "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

A determination is affected by an error of law when a governmental body erroneously interprets an applicable statute or applies an incorrect standard of proof (Pace University v New York City Commission on Human Rights, 85 NY2d 125, 128 [1995]; White v County of Cortland, 97 NY2d 336, 339 [2002]).

"An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts" (Matter of Peckham v Calogero, 12 NY3d 424, 431 [2009]). Conversely, "there is a rational basis for [a] determination" when such a determination is "consistent with [the agency's] own rules and precedents" (id.). "If the court finds that the determination is supported by a rational basis, it must sustain the determination even if the court concludes that it would have reached a different result than the one reached by the agency" (id.). "This review is deferential for it is not the role of the courts to weigh the desirability of any action or choose among alternatives" (Matter of Friends of P.S. 163, Inc. v Jewish Home Lifecare, Manhattan, 30 NY3d 416, 430 [2017] [internal quotation marks and citation omitted]).

DEC objected to this hybrid action pursuant to CPLR § 103 and moved to convert the declaratory judgment portion of this action into an Article 78 proceeding. Declaratory judgment,

while discretionary with the court, is nevertheless dependent upon facts and circumstances rendering it useful and necessary. [. . .] It is usually unnecessary where a full and adequate remedy is already provided by another well-known form of action. The general purpose of the declaratory judgment is to serve some practical end in quieting or stabilizing an uncertain or disputed jural relation either as to present or prospective obligations

(James v Alderton Dock Yards, 256 NY 298, 305 [1931] [emphasis added]). The core inquiry in whether declaratory relief is available to a plaintiff challenging the conduct of a governmental actor is "whether the challenge could have been advanced in a CPLR article 78 proceeding" (Matter of Frontier Ins. Co. v Town Bd. of Town of Schodack, 252 AD2d 928, 929 [3d Dept 1998]).

Greenidge has a full and adequate remedy available to it in CPLR §§ 7801 et seq., as evidenced by the first five counts it brought in the Petition. Greenidge's sixth count thus must be converted to a CPLR §§ 7801 et seq. proceeding pursuant to CPLR § 103(c).

DEC also contended that, with respect to Greenidge's fifth count, it failed to exhaust its administrative remedies by not seeking adjudication before the DEC on the alleged Supremacy Clause violation. Broadly, Greenidge's argument in this respect is that the CLCPA imposes obligations on it that conflict with federal laws and regulations in violation of Article VI, Clause 2 of the U.S. Constitution.

DEC argued that Greenidge did not include the topic of the Supremacy Clause in its 19-issue issue statement (AR 1397-1408), noting that it was only addressed twice during the entirety of the DEC's administrative process (AR 2073, 2390).

Generally, administrative remedies must be exhausted before seeking judicial review of administrative action (Lehigh Portland Cement Co. v NYS Dept. of Envtl. Cons., 87 NY2d 136, 140-141 [1995]). "[F]ailure to obtain prompt administrative review on the basis of the objection which [a petitioner] now seeks to assert [. . .] precludes petitioner from seeking judicial review" (Mtr. of Saint Mary's Hosp. of Troy v Axelrod, 108 AD2d 1068, 1069 [3d Dept 1985]). Where a petitioner fails to exhaust administrative remedies prior to seeking judicial review, a court "has no discretionary power to reach [the] issue" (Nelson v Coughlin, 188 AD2d 1071, 1071 [4th Dept 1992]).

What does it take for an administrative remedy to be exhausted? "Without a final administrative decision on an issue, in which the agency develops the factual record, judicial review is not available" (Mtr. of Presbyterian Home for Cent. NY, Inc. v Commissioner of Health of the State of NY, 90 AD3d 1633, 1634 [4th Dept 2011]).

In Presbyterian Home, the Fourth Department's conclusion that petitioner had not exhausted their administrative remedies relied on the distinction between the arguments made in an administrative appeal with the arguments raised before the trial court (id. at 1634-1635 ["The issue whether respondents properly adjusted petitioner's rates based on (. . .) 10 NYCRR 86-2.10 (s) is separate and distinct from the issue whether respondents properly adjusted petitioner's rates pursuant to 10 NYCRR 86-2.10 (t)"]).

As in Presbyterian Home, the Court finds Greenidge's administrative Supremacy Clause argument is distinguishable from its argument raised herein. Administratively, in its post-issues conference brief, Greenidge argued CLCPA § 7(2) "does not supplant the established process for the retirement of an electric generating facility" as a part of its broader argument that DEC's justification analysis was in error of law and ignored key facts and mitigation (AR 2068 and 2071). Among other things, Greenidge argued that its federally-imposed obligations under the Open Access Transmission Tariff ("OATT") superceded its obligations under the CLCPA—expressly implicating the Supremacy Clause.

While Greenidge repeats this same OATT-Supremacy Clause argument in this litigation (NYSCEF doc. 3, at 62), it is not cabined to discussion of DEC's justification or mitigation analysis as it was in the administrative proceeding. Further, Greenidge's Supremacy Clause argument before this Court is more broad than just the conflict alleged between the CLCPA and OATT; Greenidge cited that the NYSIO was formed by the Federal Energy Regulatory Commission ("FERC") and that OATT is just one of the FERC-regulated tariffs (id.). By this measure, Greenidge did not exhaust its administrative remedies.

"The exhaustion rule [. . .] is subject to important qualifications. It need not be followed, for example, when an agency's action is challenged as [. . .] unconstitutional" (Watergate II Apartments v Buffalo Sewer Authority, 46 NY2d 52, 57 [4th Dept 1978]). "This exception to the exhaustion rule is itself subject to qualification" (Dozier v New York City, 130 AD2d 128, 135 [2d Dept 1987]); the Court of Appeals refined this qualification, writing, "[a] constitutional claim that may require the resolution of factual issues reviewable at the administrative level should initially be addressed to the administrative agency having responsibility so that the necessary factual record can be established" (Schulz v State, 86 NY2d 225, 232 [1995] [emphasis added]).

Greenidge's Supremacy Clause argument is plainly a constitutional claim. The next question is whether the claim "may require the resolution of factual issues reviewable at the administrative level " (id.). Given the breadth of Greenidge's Supremacy Clause argument raised herein, it is not difficult to see the possibility of factual issues needing to be addressed administratively before DEC to ascertain what of the New York and federal labyrinth of law and regulation surrounding the Facility's environmental impact and power generation and transmission is applicable.

Greenidge's claim thus is subject to the exhaustion rule. Administrative remedies were not exhausted as they relate to the claim, and the Court cannot reach the issue here. The objections in points of law thus must be granted.

Greenidge contended that CLCPA § 7(2) does not confer denial authority to DEC. "It is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature" (Patrolmen's Benevolent Association of the City of New York v City of New York, 41 NY2d 205, 208 [1976]). "[T]he clearest indicator of legislative intent is the statutory text" (Majewski v Broadalbin-Perth Central School District, 91 NY2d 577, 583 [1998]). Moreover, a statute "must be construed as a whole and [. . .] its various sections must be considered together and with reference to each other" (Matter of New York County Lawyers' Association v Bloomberg, 19 NY3d 712, 721 [2012], rearg denied 20 NY3d 983 [2012] [internal quotation [*11]marks omitted]).

This question of whether CLCPA § 7(2) granted DEC the authority to deny a permit application was addressed by the New York State Supreme Court, Orange County (Onofry, J.) in Danskammer Energy, LLC v New York State Department of Environmental Conservation, 76 Misc 3d 196 (Sup. Ct., Orange Co. 2022). While the facts therein are somewhat distinct from the case at bar, they are not distinct to such a degree to cause this Court to employ a different analytical framework.

The Danskammer court considered the legislative history of the CLCPA and specifically referred to the Introducer's Memorandum in Support, which provided that "Sections 7 through 12 would provide for additional authority for state agencies to promulgate greenhouse gas regulations and require the Department of Environmental Conservation to consider climate change in permitting decisions" (see New York Bill Jacket, 2019 S.B. 6599, Ch. 106). The legislative history together with the canons of statutory construction led the Danskammer court to its analytical keystone, that it "cannot reasonably be denied that [CLCPA § 7(1-2)] expressly require the DEC to consider the furtherance of the goals of the CLCPA in determining permit applications" (Danskammer Energy, LLC, 76 Misc 3d at 248).

With that analytical frame, the Danskammer court concluded that "the plain language of the statute must be interpreted to grant the DEC the requisite authority to deny a permit when the grant of the permit would be inconsistent with or interfere with the attainment of the goals of the CLCPA, and the grant cannot otherwise be justified or the adverse effects mitigated" (id. at 250).

Much of what Danskammer considered, and is here at issue, is CLCPA § 7(2)'s edict that agencies "shall consider whether [permitting] decisions are inconsistent with or will interfere with the attainment of the statewide [GHG] emissions limits" (CLCPA § 7[2] [emphasis added]). To read "consider" as merely an academic exercise, to prevent an agency from acting upon such consideration in its permitting decision as Greenidge would have it, requires contorting language in contravention of the axiom that "resort must be had to the natural signification of the words employed, and if they have a definite meaning, which involves no absurdity or contradiction, there is no room for construction and courts have no right to add to or take away from that meaning" (Majewski, 91 NY2d at 583 [internal quotation marks and citation omitted]).

Greenidge argued that reading CLCPA § 7(2) to give an agency a basis to deny a permit expands DEC's authority beyond what it already exercises. But, CLCPA § 7(2) is an unconsolidated law. It effects all state agencies and departments, so it cannot and does not modify, expand, or contract DEC's permitting authority. It merely calls for "consideration" in permitting decisions—functionally an additional criteria for any agency to utilize in making a permitting decision.

Taken together with ECL 70-0101 et seq. (Uniform Procedure Act ["UPA"]) through its implementing regulations in 6 NYCRR 621, DEC had the authority to deny an application "for failure to meet any of the standards or criteria applicable under any statute or regulation pursuant to which the permit is sought" (6 NYCRR 621.10[f]) prior to CLCPA § 7(2)'s enactment. CLCPA § 7(2) is precisely the kind of standard or criteria described in 6 NYCRR 621.10(f) that allows an agency to deny an application.

Even if, arguendo, the plain language of CLCPA § 7(2) was properly interpreted as advisory, the UPA grants DEC the authority to use statutory or regulatory criteria as a basis for [*12]denial.

The Court agrees with the analysis of the Danskammer court and for the additional reasons set forth herein, holds that the CLCPA § 7(2) granted DEC the authority to deny a permit application. The first count of Greenidge's Petition must be denied.

CLCPA § 7(2) is composed of three elements: (1) whether granting the application is inconsistent with GHG emissions goals, (2) if granting an application would be inconsistent, providing a detailed justification why such limits/criteria may not be met, and (3) if an application is to be granted that is inconsistent for which there is a detailed statement of justification, what mitigation or alternatives are available. The Final Denial's failure to advance the issue of the element of justification to adjudication was arbitrary and capricious and affected by an error of law.

Consider each element of CLCPA § 7(2). In evaluating the inconsistency element, the analysis can proceed in one of two ways: a statement that there is inconsistency or that there is not. If there is no inconsistency, the CLCPA § 7(2) analysis logically ends; the proposed action conforms with the law.

The problem for Respondents is their interpretation of what happens when there is inconsistency. Here, the Final Denial found "Department staff did not determine [. . .] that it would grant the application notwithstanding the inconsistency with the CLCPA, and staff was not required to make a statement of justification and identify alternatives or mitigation measures. For that reason, I find it unnecessary to adjudicate those issues in this proceeding" (AR 2961). Implicit in the Final Denial is that if Department staff would grant the application despite the inconsistency, then the analysis must continue to justification and mitigation/alternatives.

In the Final Denial's interpretation of the analysis required under CLCPA § 7(2), where a finding of inconsistency is made, there is a decision point between the application being denied as inconsistent or, notwithstanding the inconsistency, continuing the CLCPA § 7(2) analysis at the justification element. The framework for deciding between these two alternatives, according at least to the Final Denial, is whether or not DEC was inclined to grant the application notwithstanding the inconsistency (id.).

Upon what authority was that decision made? What guidance or limits on discretion were provided for this inclination? How was that decision made? In searching the record, statutes, and regulations broadly, and specifically the Scoping Plan, DAR-21, and CP-49, the Court has not found the answer to these questions and thus cannot find a rational basis for the determination.

Respondents do not meaningfully offer an answer. Rather, DEC ambiguously offers only that "where the [DEC] would be inclined to grant the permit, despite inconsistency, does the [CLCPA] direct assessment of whether there is sufficient justification for the inconsistent permit" (NYSCEF doc. 97 at 8). This is problematic, particularly in light of the Final Denial's concern that "reading more into" CLCPA § 7(2), like the justification element, "unduly limits agencies' decision making discretion" (AR 2955).

A further indication that the Final Denial's interpretation of the analysis required under CLCPA § 7(2) is flawed is that it is contrary to Staff Denial and the Issues Ruling, both of which considered justification notwithstanding the finding of inconsistency at the first CLCPA § 7(2) element, and did not consider whether DEC was "inclined" to grant the permit notwithstanding the inconsistency (see Staff Denial [AR 1382-1384]; Issues Ruling [AR 2322-2323]).

The critical issue of how DEC's analysis should proceed through CLCPA § 7(2)'s elements is a question of pure statutory interpretation, and in such circumstances, the DEC's statutory interpretation of CLCPA § 7(2) is not "accord[ed] any deference" (Matter of DeVera v Elia, 32 NY3d 423, 434 [2018]; see also Matter of Belmonte v Snashall, 2 NY3d 560, 565-566 [2004] ["(W)here the question is one of pure statutory reading and analysis (. . .) (t)he judiciary need not accord any deference to the agency's determination, and is free to ascertain the proper interpretation from the statutory language and legislative intent").

Affording DEC deference in its interpretation of CLCPA § 7(2) is insufficient to cure DEC's interpretive errors. Stopping the CLCPA § 7(2) analysis at a finding of inconsistency—in addition to being arbitrary and capricious—was in violation of lawful procedure and was affected by an error of law. The Court again agrees with the Danskammer Court, which wrote "the plain language of the statute must be interpreted to grant the DEC the requisite authority to deny a permit when the grant of the permit would be inconsistent with or interfere with the attainment of the goals of the CLCPA, and the grant cannot otherwise be justified or the adverse effects mitigated" (Danskammer Energy, LLC, 76 Misc 3d at 250)^[FN2] . If an agency has no grounds to deny an application other than inconsistency, its analysis under CLCPA § 7(2) must continue to consider justification.

The Scoping Plan sets forth, that "[p]ursuant to existing policies and procedures, any retirement and/or repurposing of existing fossil fuel generation must be done in coordination with the PSC, the NYISO planning process, the required reviews under Section 7(2) and 7(3) of the Climate Act, and consistent with New York State Reliability Council criteria" (Scoping Plan [Dec. 2022] at 226).

Moreover, a thorough justification analysis could have relied on input from the PSC, which the Legislature via the PSL delegated specific authority concerning power plants, which would have been consistent with the Scoping Plan's guidance concerning the justification analysis.

The Court is left to conclude the Final Denial had no rational basis for its decision to forego CLCPA § 7(2)'s justification analysis and that the denial of the Renewal Application, and was thus affected by an error of law and was arbitrary and capricious.

DEC argued that the Final Denial was correct in not advancing the question of justification to an adjudicatory hearing because the issue was not "substantive and significant" as required by 6 NYCRR 624.4(c)(1)(iii) and 6 NYCRR 621.8(b).

But DEC's focus on the "substantive and significant" trigger for adjudication overlooks 6 NYCRR 624.4(c)(1)(ii), which states that an issue is adjudicable if "it relates to a matter cited by the department staff as a basis to deny the permit application and is contested by the applicant." The only limitation to 6 NYCRR 624.4(c)(1)(ii) is that "the completeness of an application, as defined in section 621.1(d) of this Title, will not be an issue for adjudication" (6 NYCRR 624.4[c][7]).

The question becomes whether it is a fair characterization of the Staff Denial that justification is one of its bases for denying the Renewal Application. The Staff Denial found Greenidge did "not provide [DEC] with any information to support a justification in the event of a finding of inconsistency, as is the case here, such as whether cryptocurrency mining operations in and of themselves could be necessary or could provide any economic or social utility for the State" (AR 1382). Further, the Staff Denial "considered whether the Facility may be necessary for purposes of maintaining electric system reliability", albeit not based on submissions from Greenidge, and concluded such necessity was "not an available justification" (AR 1383-1384). It thus is a fair characterization of the Staff Denial that justification is one of its bases for denying the Renewal Application, which in turn is the predicate for an adjudicable issue pursuant to 6 NYCRR 624.4(c)(1)(ii).

DEC correctly argued that evaluating an agency's determinations regarding Part 624 is an exercise of its discretion (Matter of Town of Ellery v New York State Department of Environmental Conservation, 159 AD3d 1516, 1517 [4th Dept 2018]) and also cited Ellery for the proposition that "where the judgment of the agency involves factual evaluations in the area of the agency's expertise and is supported by the record, such judgment must be accorded great weight and judicial deference."^[FN3]

But even according great weight and deference to the Final Denial's resolution of the "substantive and significant" question pursuant to 6 NYCRR 624.4(c)(2-3), the question of justification still must have been advanced to adjudication.^[FN4] Greenidge need not have succeeded on every avenue under 6 NYCRR 624.4(c) to advance the issue, it merely needed to succeed on one. And it is unavoidable that Greenidge cleared the bar for the factual predicate to raise [*14]justification as an adjudicable issue pursuant to 6 NYCRR 624.4(c)(1)(ii).

The Final Denial's failure to advance the issue of justification to adjudication was thus arbitrary and capricious and contrary to law (see Matter of Adirondack White Lake Association v Adirondack Park Agency, 225 AD3d 1247 [4th Dept 2024]).

For the foregoing reasons, Greenidge's second count in its Petition must be granted, the Final Denial must be annulled, and the matter must be remitted to DEC.

Greenidge alleged DEC engaged in improper policymaking, "making subjective value judgments that are beyond its purview" (NYSCEF doc. 3, at 44). Specifically, Greenidge alleged the Final Denial conducted CLCPA § 7(2)'s justification analysis "behind closed doors" (NYSCEF doc.131, at 11) "based on an obvious policy determination that using electricity for cryptocurrency mining is not need, desirable, or worthy in New York State" (NYSCEF doc. 3, at 44 [emphasis added]).

Greenidge's argument asks the Court to conjecture that what happened "behind closed doors" was obvious policymaking. But as discussed in Section (C)(1) of this Decision, supra, it is not clear what occurred in the Final Denial's analysis after the finding of inconsistency.

The Final Denial decided between denying the Renewal Application as inconsistent or, notwithstanding the inconsistency, continuing the CLCPA § 7(2) analysis at the justification element, and asserts herein that DEC chose the former because it was so "inclined" (NYSCEF doc. 97 at 8). Just as that inclination is insufficient lead the Court to find a rational basis for the determination, it is insufficient to allow the Court to conclude improper policymaking took place.

As such, Greenidge's third count in its Petition must be denied.

Greenidge's fourth count assailed the Final Denial's inconsistency determination. Significantly, an agency is due deference in its application of a law in its area of expertise (Matter of Saratoga Economic Development Corporation v State of New York Authorities Budget Office, 222 AD3d 1072, 1074 [3d Dept 2023] lv. denied 41 NY3d 910 [2024]).

In support of the argument that the Final Denial's inconsistency determination was arbitrary and capricious, Greenidge pointed to a series of facts it believed supported a finding of consistency:

• that Greenidge already reduced the Facility's GHG emissions 70% from 1990 thus meeting the 2030 emissions limit set forth in ECL § 75-0107(1);

• that the proposed Title V permit would expire prior to the 2030 emissions limit set forth in ECL § 75-0107(1); and

• that Greenidge agreed to reduce the Facility's current permitted GHG emissions level by 40% prior to 2030 in compliance with ECL § 75-0107(1)

(NYSCEF doc. 3, at 55-60). Considering these facts, one could rationally conclude that granting the Renewal Application would be consistent "with the attainment of the statewide [GHG] emissions limits established in article 75 of the" ECL. By the same measure, however, it would be rational to conclude, as the Final Denial did, that granting the Renewal Application would be [*15]inconsistent.

The Final Denial expressly addressed each of the facts Greenidge raised herein and still made a finding of inconsistency (AR 2956-2960). The reasoning provided is rational, reasoned, and made with due regard. As such, the Court "must sustain the determination even if the court concludes it would have reached a different result than the one reached by the agency" (Peckham, 12 NY3d at 431).

Greenidge further argues that the Final Denial's inconsistency determination was arbitrary and capricious because a proper analysis of inconsistency is inextricably linked with an analysis of justification and alternatives/mitigation. But the fact that justification and alternatives/mitigation are themselves subsequent elements in CLCPA § 7(2) for an agency to consider weighs against the notion that they must also be considered in the inconsistency analysis. In this respect, the Final Denial's interpretation of CLCPA § 7(2) is rational and thus not arbitrary and capricious.

Greenidge's fourth count in its Petition must thus be denied.

DEC had the authority to deny Greenidge's Renewal Application under CLCPA § 7(2), but in utilizing that authority in its Final Denial, acted in a manner that was both affected by errors of law and arbitrary and capricious. Consistent with the foregoing, it is hereby

ORDERED that DEC's objections in points of law are GRANTED;

ADJUDGED AND DECREED that the Petition is GRANTED IN PART and DENIED IN PART;

ADJUDGED AND DECREED that DEC's May 8, 2024 Decision of the Regional Director denying Greenidge's application to renew its Clean Air Act Title V permit for the Greenidge Generating Station is ANNULLED, and the matter REMITTED to the DEC for further proceedings consistent with this Decision, Judgment and Order;

ORDERED that Petitioner's Motion for a Temporary Restraining Order and Preliminary Injunction is DENIED AS MOOT by the terms of this Decision, Judgment and Order and APA § 401[2]; and it is further

ORDERED, ADJUDGED, AND DECREED that any relief requested and not specifically addressed herein is DENIED.

Dated this 14th day of November, 2024, at Rochester, New York.