082105come093009.wpd

PUBLIC SERVICE COMMISSION OF WEST CHARLESTON

At a session of the PUBLIC SERVICE COMMISSION OF in the City of Charleston on the 30th day of September 2009.

CASE NO. 08-2105-E-CS

AES , LLC Application for a Siting Certificate to Authorize the Construction and Operation of a Wholesale Electric Generating Facility in Grant , West Virginia

Public Service Commission of West Virginia Charleston TABLE OF CONTENTS

I. PROCEDURAL HISTORY ...... 2

11. DISCUSSION OF ISSUES AND EVIDENCE ...... 8

A. StatutoryTest ...... 8

B. The Commission’s Application of Part One ...... 9

1. Part One (a) - The Interest of AES New Creek to Construct the Project ...... 9

2. Part One (b) - The Need for Generating Plants in the State andRegion ...... 10

3. Part One (c) - The Economic Gain to the State and the LocalEconomy ...... 13

4. Part One (i) - Community Residents’ Interest in Living Separate from the Project, Part One (ii) - The Project’s Negative Impacts be Minimally Disruptive to Existing Uses, and Part One (iii) - The Project’s Social and Environmental Impacts . 14

a. Viewshed ...... 15

b. Noise ...... 17

C. Birds and Bats ...... 21

d. Water ...... 24

5. Proposed Conditions and the Memorandum Agreement ...... 24

C. The Commission’s Application of Part Two ...... 3 1

111. FINDINGS OF FACT ...... 31

IV. CONCLUSIONS OF LAW ...... 43

V. ORDER ...... 48

Public Service Commission of West Virginia Charleston COMMISSION ORDER

By this Order, the Commission (i) grants a conditional siting certificate to AES New Creek, LLC (“AES New Creek”) and (ii) approves the January 14, 2009 Memorandum Agreement between AES New Creek and the Trades Council.

I. PROCEDURAL HISTORY’

On December 19,2008, AES New Creek filed an application for a Siting Certificate2 (“Application”), pursuant to W.Va. Code 824-2- 1IC, to authorize the construction and operation of a $308 million wind turbine wholesale electric generating facility, including related interconnection facilities. AES New Creek proposed to construct up to sixty-six wind turbines on a seven-mile stretch of the New Creek Mountain ridge line from a point approximately one mile north of Greenland Gap near Greenland in Grant County and proceeding in a northern direction to the county line with Mineral County. AES New Creek EX. 1,p. 1-1.

AES New Creek stated that the Project will be located within 4,900 acres of leased land that consists primarily of undeveloped mountainous woodlands. About fifty acres will be required for the Project’s final footprint. Id., pp. 1-1, 1-2, 7-1. AES New Creek has already obtained the leases needed for the construction and operation of the Project. AES New Creek Ex. RAC-D, p. 8.

There is one residence located within 3,500 feet to the closest proposed turbine. That residence, a part-time residence, is located approximately 1,300 feet from the closest proposed turbine. The owner of this residence has entered into a lease agreement with AES New Creek. There are only nine residences within 4,000 feet of the Project, and three of these residences are under lease agreements with AES New Creek. AES New Creek Ex. RAC-D, pp. 8-9.

1 The Table of Contents and Headings are provided purely as a convenience to the reader. Material or discussion under one heading may also relate to material or discussion under another heading. In all events, the substantive content ofthe Commission’s Order, and not the wording or placement of any heading, controls.

2 AES New Creek’s Application consisted of three volumes in excess of 1,100 pages, including multiple tables and figures and nineteen appendices. The Application was filed in accordance with the Commission’s Rules Governing Siting Certificates for Exempt Wholesale Generators (‘‘Siting Rules”), 15 C.S.R. Series 30. AES New Creek numbered the pages of its Application and related materials beginning with a section and then specific page of that particular section. Thus, page 1-2 refers to Section 1, page 2, and not to pages 1 through 2. For the sake of consistency, the Commission will follow the same page numbering format when referring to the Application.

Public Service Commission of West Virginia Charleston 2 According to the Application, AES New Creek selected this site because it has an excellent wind resource; the Project can meet growing demand for electricity in the PJM3 service territory; the landowners support the Project; the Project is located away from sensitive receptors such 2s residences and recreational areas 2nd near an existing electric transmission line; and environmental aspects are expected to be minimal. AES New Creek Ex. 1, p. 1-1; AES New Creek Ex. RAC-D, p. 11.

AES New Creek asserted that neither the Project nor the related interconnection facilities is a utility providing service to the public, and there will be no direct financial impact to West Virginia ratepayers from the construction and operation of the Project. AES New Creek Ex. 1, App. B, p. 2. Rates charged for electricity from the Project will be subject to regulation by the Federal Energy Regulatory Commission (“FERC”) for negotiated rates.

_.Id.

According to the Application, the Project will be capable of generating up to 160 megawatts (“MW’)‘ to an existing Allegheny Power 500 kV overhead transmission line that runs from Mount Storm to Doubs and is located approximately 3,300 feet from the southern- most proposed turbine location. AES New Creek Ex. 1, pp. 1-1,4.1.

A collector system of buried cables will conduct electricity from each of the wind turbines to a new collection substation. From the collection substation, power will be conducted to a new switching station located adjacent to the collection substation and then to the existing 500 kV transmission line. Id.,pp. 1-3,4-1, AES New Creek will bear all of these costs and the costs for any other upgrades necessary for the Project to deliver its electricity to the existing 500 kV transmission line. Id., p. 4-1.

AES New Creek will enter into agreements with PJM to govern the Project’s operation and interconnection with the 500 kV transmission line. According to the Application, the PJM feasibility study indicates that there is adequate capacity to accept 160 MW from the Project. Id., p. 1-3 & App. F.

According to the Application, AES New Creek will obtain 40 to 60 percent of the Project funding through equity, and the remainder of its funding will be borrowed. No public funds will be used, and there are no agreements with public entities regarding the funding of the Project. Id., p. 12-1; AES New Creek Ex. RAC-D, p. 15.

3 PJM Interconnection L.L.C., a regional transmission organization (ccRTO”),coordinates the movement of electricity through all or parts of Delaware, Illinois, Indiana, Kentucky, , Michigan, New Jersey, North Carolina, Ohio, , Tennessee, Virginia, West Virginia, and the District of Columbia; operates a wholesale electricity market; and manages a long-term regional electric transmission planning system to maintain the reliability to the power supply system.

4 A megawatt is enough electricity to power approximately 800 to 1,000 homes.

Public Service Commission of West Virginia Charleston If the Project is constructed at its full maximum size of 160 MW, then the estimated property tax that AES New Creek will pay to Grant County is approximately $673,000 per year. For the full maximum size of 160 MW, AES New Creek will also pay approximately $2 19,000 per year in Stzite taxes for the first ten years of the Project and $437,000 per year thereafter. AES New Creek Ex. 1, pp. 12-3, 12-4. If the Project size results in a capacity of 99 MW, then the estimated property tax that AES New Creek would pay to Grant County is approximately $428,000 per year, with approximately $135,000 per year in State taxes for the first ten years of the Project and $27 1,000 per year thereafter. Id., p. 12-4. The Project will result in about 123 construction jobs and eight to ten permanent jobs when the Project is operational. Id.,pp. 12-2, 12-3.

Under the requirements of W.Va. Code 924-2- 1lc(b), the Commission must issue its final order in this proceeding by October 15,2010.

Initial Public Notice & Comment Letters

The Commission received letters in support of and in opposition to the Project after AES New Creek filed the Application. By the end of June 2009, the comment letters in support of the Project numbered approximately 44, and the number of comment letters in opposition numbered approximately 107.

AES New Creek published notice of the Application on December 30, 2008, in Kanawha County in The Charleston Gazette and in Grant County in The Grant County Press. See Affidavits of Publication filed January 5,2009.

AES New Creek placed a copy of the Application at the Grant County Public L brary. AES New Creek Ex. 1 (cover letter).

Reauest for Waiver of Filing Requirements; Interventions

On February 23, 2009, the Commission granted a request of AES New Creek for a waiver of certain certificate application filing requirements. Because the Commission's jurisdiction, by law, is limited regarding the operations of the Project, the Commission did not require AES New Creek to file information that relates to the traditional public utility model under which the Commission establishes rates for service based on the cost to the utility to provide that service. February 23,2009 Commission Order, pp. 6, 12.

Additionally, AES New Creek filed a photograph to satis& Siting Rule 3.1 .g.2 that was three months older than the Siting Rules require and sought a waiver from the requirement of the Siting Rules. Because the photograph continued to accurately represent the surface features of the Project area, the Commission granted this request. Id.,pp. 9, 12.

On February 23, 2009, the Commission granted the petitions to intervene filed on January 8, 2009, by the West Virginia State Building and Construction Trades Council,

Public Service Commission of West Virginia Charleston 4 AFL-CIO (“Trades Council”) and on January 26, 2009, by the Alliance (“Alliance”). Id., p. 12.

Motion for Protective Treatment

Rule 3.1.1.2 of the Siting Rules requires AES New Creek to file certain financial statements for each year of the start-up phase and for the first five years of operation, and these financial statements must disclose all assumptions. AES New Creek filed part of the financial data under seal, arguing that the information was confidential and proprietary and constituted trade secrets because it provides insight into the business plans and strategies of AES New Creek to implement the Project. The Commission agreed that the information constituted trade secrets under W.Va. Code §29B-1-1(1) and granted the request for protective treatment to AES New Creek. February 23,2009 Commission Order, pp. 6-8,12.

With the Application, AES New Creek filed a preliminary Transportation Study that contained recommendations for access roads to transport and install Project equipment and estimated costs to improve existing roads and construct new ones, with certain costs provided under seal. AES New Creek argued that the cost information was confidential and proprietary and constituted trade secrets, and that the disclosure of the costs could significantly alter the bargaining position of AES New Creek. On February 23, 2009, the Commission agreed that the information constituted trade secrets under W.Va. Code §29B-1-1(1) and granted the request for protective treatment to AES New Creek. Id. pp. 6-8, 12.

Notice of Slight Modification to the Project

In order to assess the full range of potential Project impacts, AES New Creek noted that the Application provided an analysis assuming the use of two turbines that were under consideration at the time the Application was filed - a 1.5 MW GE turbine (the smallest turbine in terms of physical size) and a 2.5 MW Clipper turbine (the largest turbine in terms of physical size). AES New Creek pointed out that the Application analyzed both the maximum height for the 2.5 MW Clipper turbine (80 meter hub height; total height 129.5 meters), and the maximum height for the 1.5 MW GE turbine (80 meter hub height; total height 118.5 meters). AES New Creek Ex. 1, p. 3-1.

AES New Creek also noted that a different turbine model may ultimately be selected for the Project, but that if a model other than the 1.5 MW GE or 2.5 MW Clipper was selected, it would fall within the parameters of the GE and Clipper models outlined in the Application. AES New Creek Ex. 1, p. 3- 1. AES New Creek informed the Commission on April 28,2009, that a 2.5 MW GE turbine was a viable alternative for the Project. Because the 2.5 MW GE turbine is slightly taller (5.5 meters) than the 2.5 MW Clipper turbine, AES New Creek indicated that it wanted to alert the Commission and the parties to the potential alternative. Modification Letter from AES New Creek filed April 28, 2009.

Public Service Commission of West Virginia Charleston 5 Public Comment Hearings and the View by the Commission

AES New Creek published a notice of the public comment hearings on April 7,2009, in Kanawha County is The Charleston Gazette and in Grant County in The Grant County Press. See Affidavits of Publication filed April 14, 2009. The Commission conducted a public comment hearing in Petersburg on April 30, 2009. A total of sixteen people commented at the hearing; twelve individuals spoke in favor of the Project, while four spoke against the Project. The public speakers opposing the Project expressed concern about the Project’s impact on viewshed, birds, bats and the amount of electricity being generated. The public speakers favoring the Project cited both the Project’s economic benefits as well as the country’s need for clean, renewable energy.

On May 1, 2009, the Commission participated in a View of the Project Area, beginning at 9:OO a.m. at Kimble’s Store in Scherr. Representatives of Commission Staff (“Staff ’), the Alliance, AES New Creek, and the Trades Council conducted and participated in the View, which lasted until mid-afternoon.

The Commission went to Viewpoints that were jointly recommended on March 17, 2009, by AES New Creek, Staff, the Alliance, and the Trades Council:

1. A residence along Route 42 on the road leading to Mt. Storm; 2. Near Walker Ridge; 3. A reservoir and dam (Dam Site 14) off Oakdale Road and Route 93; 4. Log Cabin and Church at Claysville; 5. Skyline and Saddle Mountain; 6. Crest of New Creek Mountain, including location of meteorological tower; 7. Medley; and 8. Greenland Gap.

During the View, the Alliance suggested that the Commission stop at the Nancy Hanks Memorial. No one objected, and the Commission added the site to the View. The Commission and each of the parties traveled in separate vehicles during the View.

At each Viewpoint, the parties were given the opportunity to read a description of each Viewpoint, as had been filed on March 17,2009. The descriptions were required to be prefiled to provide appropriate information to the Commission and to limit significant extemporaneous discussions among the Parties during the View. At each Viewpoint, the Commission asked clariQing questions about the Viewpoints that were answered by the Parties. None of the questions addressed the merits of the Project. A court reporter was not present during the View.

Public Service Commission of West Virginia Charleston 6 Prefiled Testimony

On February 13,2009, AES New Creek prefiled the direct testimony of its witnesses:

1. Robert A. Colman - siting application and policy decisions; 2. Samantha Hard - environmental issues, permits, and authorizations; 3. Trevor Peterson - bird and bat studies; 4. Judith Bartos - viewshed mapping, photosimulations, and line of sight; 5. Anthony Agresti - noise; 6. Robert D. Wall, Ph.D. - archaeology and relations with the West Virginia State Historic Preservation Office (“SHPO”); 7. Geoffrey B. Henry - architecture and SHPO; and 8. Patricia D. Fleischauer - energy generation and economic modeling.

On May 8,2009, AES New Creek prefiled the supplemental direct testimony of the following witnesses: Robert A. Colman, Trevor Peterson, Judith Bartos, and Anthony Agresti. This testimony related to analyses conducted relating to the potential use of the 2.5 MW GE turbine.

On May 18, 2009, the Trades Council prefiled its direct testimony:

1. Darwin Snyder - local worker agreement; and 2. Michael Jin - economic impacts (IMPLAN study).

On June 11, 2009, Staff prefiled the direct and rebuttal testimony of its witnesses:

1. Dixie Kellmeyer - financial review; and 2. Wayne Perdue - engineering review.

The Alliance did not file prefiled testimony. On June 22, 2009, the Alliance filed a letter with the Commission advising that it was withdrawing as an intervenor from the proceeding.

On June 26,2009, AES New Creek filed the rebuttal testimony of Robert A. Colman and Samantha Hard to provide clarifications and respond to Staff direct and rebuttal testimony.

Joint Stipulation

On July 2, 2009, AES New Creek, Staff, and the Trades Council (“Stipulating Parties”) filed a Joint Stipulation and Agreement (“Joint Stipulation”). Joint Ex. 1. In the Joint Stipulation, the Stipulating Parties recommended that the Commission grant AES New Creek a siting certificate, subject to certain pre-construction, construction, and operational conditions for the Project. Specifically, the Stipulating Parties agreed that the evidence that

Public Service Commission of West Virginia Charleston 7 was expected to be admitted at the hearing (Le., the Application and the prefiled testimony) weighed in favor of granting AES New Creek a siting certificate. Joint Ex. 1, p. 5. The Stipulating Parties also provided the specific text of recommended conditions. Id. pp. 5-1 1. Following the submission ofthe Joint Stipulation, the Stipulating Parties filed, as E separate filing, proposed Findings of Fact and Conclusions of Law for the Commission’s review.

Evidentiary Hearing

In this case, the Commission has reviewed eighteen prefiled direct, supplemental direct, and rebuttal testimonies and exhibits of twelve witnesses. The Commission also conducted an evidentiary hearing on July 13, 2009. In this Order the transcript from the evidentiary hearing is cited by the page number. References to prefiled direct, supplemental direct, and rebuttal testimonies of witnesses are cited to the page number and the exhibit identification that appears in the transcripts.

AES New Creek published notice of the evidentiary hearing on June 18, 2009, in Mineral County in the News-Tribune; on June 19, 2009, in Kanawha County in The Charleston Gazette; and on June 23,2009, in Grant County in The Grant County Press. &g Affidavits of Publication filed July 2,2009.

11. DISCUSSION OF ISSUES AND EVIDENCE

A. Statutory Test

W.Va. Code 524-2-1 lc(c) states as follows:

In deciding whether to issue, refuse to issue, or issue in part or refuse to issue in part a siting certificate, the Commission shall appraise and balance the interests of the public, the general interests of the state and local economy, and the interests of the applicant. The Commission may issue a siting certificate only if it determines that the terms and conditions of any public funding or any agreement relating to the abatement of property taxes do not offend the public interest, and the construction of the facility or material modification of the facility will result in a substantial positive economic impact on the local economy and local employment. The Commission shall issue an order that includes appropriate findings of fact and conclusions of law that address each factor specified in this subsection. All material terms, conditions and limitations applicable to the construction and operation of the proposed facility or material modification of the facility shall be specifically set forth in the Commission order.

The Commission views this statute as setting forth a two-part balancing test that the Commission more fully explained in Longview Power LLC, Case No. 03-1 860-E-CS,

Public Service Commission of West Virginia Charleston 8 August 27, 2004 Commission Order.5 The Commission explained its two part analysis on page 102 of its June 26,2006 Order approving the Longview Project:

In Part One of the analysis, the Commission performs its duty to appraise and balance: (a) an applicant’s interest to construct an electric wholesale generating facility; (b) the State’s and region’s need for new electrical generating plants; and (c) the economic gain to the State and the local economy, against: (i) community residents’ interest in living separate and apart from such facility; (ii) a community’s interest that a facility’s negative impacts be as minimally disruptive to existing property uses as is reasonably possible; and (iii) the social and environmental impacts of the proposed facility on the local vicinity, the surrounding region, and the State.

The Commission performs Part Two of its analysis only if it determines in Part One that, taken as a whole, positive impacts relating to the various interests outweigh the negative impacts on the various interests. (& W.Va. Code 524-2-11c(c)). In Part Two the Commission decides whether a project’s public funding, if any, and property tax abatement, if any, offends the public interest. (W.Va. Code 524-2-1 lc(c)).

Within the second part of Part One, the Commission considers issues such as the Project’s impacts on viewshed, wildlife, ambient sound levels, and water resources. AES Laurel Mountain, LLC, Case No. 08-0 109-E-CS, November 26, 2008 Commission Order, p. 9 (“Laurel Mountain Siting Order”).

B. The Commission’s Application of Part One

1. Part One (a) - The Interest of AES New Creek to Construct the Project

AES New Creek has been investigating and developing this Project since at least 2006. AES New Creek Ex. 1, p. 5-1. Since that time, AES New Creek has, through the hiring of consultants with requisite expertise for the particular areas of concern, studied anticipated Project impacts related to birds, bats, and other wildlife; noise; viewshed; shadow flicker; and telecommunications. See generally AES New Creek Ex. 1 & Apps. H, I, J, K, 0, Q, R, S, & T. AES New Creek has also indicated that it will invest approximately $308 million to construct the Project in West Virginia, with approximately 40 percent to 60 percent being generated from AES equity. AES New Creek Ex. 1, p. 12-1.

In addition to its efforts with the Commission, AES New Creek has already obtained clearance from SHPO relating to archaeological resources and is awaiting final

5 See also Longview Power, LLC, Case Nos. 03-1860-E-CS & 05-1467-E-CN (Comm’n Order June 26,2006); see also Libertv Gap Wind Force, LLC, Case No. 05-1740-E-CS (Comm’n Order pp. 39-40 June 22,2007).

Public Service Commission of West Virginia Charleston 9 documentation from SHPO relating to architectural resources. Tr. I, p. 49-50, 64 (Mr. Colman). AES New Creek has consulted with the West Virginia Division of Natural Resources (“WDNR”) and the Fish and Wildlife Service (“USFWS”). See generdlv AES New Creek Ex. 1 App. P (relating to agency consultsltion); Tr. I, p. 32-33 (Mr. Colman) (“[Wle have been in touch with [USFWS] with respect to birds and bats. We kept them updated with meetings and conference calls. We met them and we provided them with all of the information.”). AES New Creek has also indicated that it will work with the Commission, USFWS, and WVDNR to study the Project’s impacts to bats during the first year of the Project’s operation. Joint Ex. 1 pp. 9-10.

As mentioned earlier, AES New Creek submitted a “substantial” Application. See Fn. 2 above. This Application is the eighth filing at the Commission related to wind turbine projects. As noted in the AES Laurel Mountain proceeding, each filing becomes more comprehensive and seems to improve on the last, at least as to format. Laurel Mountain Siting Order, p. 9. The Application followed the same format as the AES Laurel Mountain application, and provided additional information for the Commission, including a line-of-sight analysis and an analysis of the low frequency sound anticipated with the Project. AES New Creek Ex. JB-D, p. 23; AES New Creek Ex. AA-D pp. 17-18; Tr. I, p. 45-46 (Mr. Colman).

Based on this evidence, the Commission concludes that AES New Creek has demonstrated a sufficient interest in constructing the Project. First, AES New Creek has demonstrated that it has a legitimate business purpose in undertaking the Project and AES New Creek retained various technical experts and developed detailed information in support of its Application. It has expended substantial time and economic resources to apply for a siting certificate, to pursue various other required permits, and to obtain the leases necessary to construct and operate the Project. It is prepared to make a significant investment to construct and operate the Project in West Virginia. Finally, AES New Creek has committed to coordinating its activities with the Commission and other state and federal agencies. All of these facts show AES New Creek’s interest in constructing the Project.

2. Part One (b) - The Need for Generating Plants in the State and Region

In its Application, AES New Creek asserted that it will provide needed capacity and energy to the electric power system, to serve load, and maintain overall system reliability as explained in more detail below. AES New Creek asserted that the Project will add generation from a renewable resource. AES New Creek Ex. 1, p. 2-1. A review of the evidence presented in the case indicates that AES New Creek has established a need for the Project.

Generation Fueled by Renewable Resources

The Commission has previously noted that the Energy Policy Act of 2005, P.L. 109-58, among other things, amended certain sections of the United States Code to encourage

Public Service Commission of West Virginia Charleston 10 the use and development of renewable energy resources. Laurel Mountain Siting Order, pp. 10,62 (citing Title 11, P.L. 109-58). Beyond the Energy Policy Act of 2005, we also stated:

In our estim2tion, it is reasonable to expect that federal environmental regulations will be enacted to control and monitor greenhouse gases, including carbon emissions, but there is not yet agreement about how the federal government will address those emissions. Until that policy has been enacted, the Commission cannot begin to estimate whether retrofitting will continue to contribute to added capacity. Instead the primary benefit of retrofitting could be to allow existing plants to remain productive. It simply is too early to tell.

Again, while the current downturn in economic activity and the dismal performance of the financial market indicate some difficult “sledding” ahead for the state and nation over the near term, the long term need for “renewable resources” [I, both to meet the need for new generation and to ease some of the concerns about carbon-based generation pending further technological development, is clear.

Laurel Mountain Siting Order, pp. 11-12.

As indicated in previous cases, there are no West Virginia statutes or rules suggesting that wind turbines are an inappropriate or unwarranted source of new electric generation in this State. Laurel Mountain Siting Order, p. 62. To the contrary, in June 2009, the West Virginia Legislature passed the Alternative and Renewable Energy Portfolio Act (“Energy Portfolio Act”). W.Va. Code 524-2F-1 et seq. In the Energy Portfolio Act, the West Virginia Legislature declared that “[Tlhe development of a robust and diverse portfolio of electric-generating capacity is needed for West Virginia to continue its success in attracting new businesses and jobs. This portfolio must include the use of alternative and renewable energy resources at new and existing facilities.” W.Va. Code §24-2F-2(4). The Legislature also stated that “[It] is in the public interest for the state to encourage the construction of alternative and renewable energy resource facilities that increase the capacity to provide for current and anticipated electric energy demand at a reasonable price.” Id. at §24-2F-2(7). Under the Energy Portfolio Act, the definition of “renewable energy resource” includes “wind power” as a renewable resource, method, project, or technology for the production or generation of electricity. Id. 8 24-2F-3( 13).

Moreover, each electric utility doing business in this State receives credits for, among other things, using alternative and renewable energy resources. Using credits acquired, each electric utility doing business in this State is required to meet certain alternative and renewable energy portfolio standards. Id. 8 24-2F-5(a). For the period beginning January 1, 20 15, and ending December 3 1,20 19, an electric utility must own credits in an amount equal to at least ten percent of the electric energy sold by the electric utility to retail customers in

Public Service Commission of West Virginia Charleston 11 this State in the preceding calendar year. That amount increases to fifteen percent on January 1, 2020, and increases again to twenty-five percent on January 1, 2025. Id. §24-2F-5(~).

Thus, although wind power is not mandated for electric generation in West Virginia, it is one of the resources that electric utilities may use to satisfl its required alternative and renewable energy portfolio standard. The Energy Portfolio Act became effective in West Virginia on July 1,2009. Given this authority, it is reasonable to encourage the development of diversified sources of fuel to generate electricity and to include renewable energy resources such as wind among those diversified sources.

Capacity to Meet the Needs of the Region

In its Application, AES New Creek noted that the PJM 2008 Load Forecast Report predicted an average summer peak load growth of 1.5 percent per year during the next ten years and 1.4 percent per year each of the five years thereafter. As a result, the PJM summer peak is predicted to reach 160,107 MW in 20 18 and 170,367 MW in 2023. The PJM winter peak load is projected to increase 1.1 percent per year over the next fifteen years, with the winter peak load forecast to reach 127,250 MW in 2016-17 and 133,518 MW in 2022-23. AES New Creek Ex. 1, p. 2- 1. AES New Creek indicated that, as operating and maintenance costs escalate and environmental regulations evolve, pressure to retire older fossil-fueled facilities is expected to increase. Id. AES New Creek argued that its project would help fill these expected needs. This assertion was uncontested.

In addition to this need for capacity, the Commission also notes that PJM must secure committed capacity that considerably exceeds any particular summer expected peak. Laurel Mountain Siting Order, p. 12. Moreover, in previous wind siting cases the Commission, in reviewing need, has recognized more than the highest annual hourly peak demand in assessing whether there is need for a generating facility. See, e.g, Beech Ridge, Case No. 05- 159O-E-CS, August 28,2006 Commission Order, Conclusion of Law 15. In Beech Ridge the Commission recognized the fact that wind turbines can power thousands of homes, even at their lowest productivity, and that the output of wind projects will assist in meeting the peak summertime demands.

Finally, in addition to these concerns, we also note that this State is part of a regional integrated electricity grid. Id., Conclusion of Law 14 (“[Ilt is not in the public interest for this Commission to isolate West Virginia from the region. The power grid is interconnected, and to safeguard the availability of productive, well-maintained resources to our State’s residents, West Virginia must participate in the interconnected electric system.”).

In sum, it is in the public interest to develop diversified sources of he1 to generate electricity, including renewables such as wind; additional generation capacity is needed to meet PJM’s projected load forecast; it is in the public interest for West Virginia to participate in the interconnected electric system; the Project will provide power to thousands of homes

Public Service Commission of West Virginia Charleston 12 at its lowest level of productivity, and its output is well-suited to deliver electricity in the winter, when heating demand peaks, and may assist in meeting the peak summertime demands. For all of these reasons, the Commission concludes that AES New Creek has demomtrslted sufficient need for this Proj ect.

3. Part One (c) - The Economic Gain to the State and Local Economy

AES New Creek asserted that, assuming a capacity of 132.5 MW, the Project would have a significant positive impact on the economy during construction, generating as much as $1 13 million in state and local economic activity and supporting up to 1,046jobs, with 123 of them being for construction workers. AES New Creek Ex. PDF-D pp. 5-7.

In the AES Laurel Mountain proceeding, AES Laurel Mountain evaluated the Project’s impact using the Job and Economic Development Impact (“JEDI”) model designed by the National Renewable Energy Laboratory in 2002 to estimate the economic impacts associated with the construction of wind power projects in the United States. Laurel Mountain Siting Order, p. 15. In this proceeding, AES New Creek evaluated the Project’s impact by using a new, updated December 2008 version of the JEDI model. The new version of the JEDI model is the same in its basic approach as the older version; however, it made changes in classifications of direct versus indirect employment and assigned proportionally less of the economic impact to the manufacturing sector and proportionately more to other off-site impacts, increasing the indirect and induced impact estimated. AES New Creek Ex. PDF-D pp. 6-7. AES New Creek asserted that the reallocation better reflected “on-the- ground” survey data that captures wind industry construction, equipment, and operating practices, as well as cost modifications that have occurred since 2002. Id.

AES New Creek entered into a Memorandum Agreement with the local unions that provides certain assurances that local workers will be hired to construct the Project. Trades Council Ex. 1, p. 2.

During operations, AES New Creek believes that the Project would employ about eight to ten people and, at the maximum generating capacity of 160 MW, generate $5.24 million annually for the local economy. AES New Creek Ex. 1, p. 12-3. If a 160 MW Project is constructed, AES New Creek estimated that it will be paying approximately $673,000 per year to Grant County and approximately $219,000 per year in State taxes for the first ten years and $437,000 annually thereafter. Id. Finally, AES New Creek indicated that economic benefits will continue for the anticipated thirty-year life of the Project. AES New Creek Ex. PDF-D, p. 9.

The Trades Council also presented evidence regarding economic activity. Trades Council witness, Michael Jin, testified that the Project would result in a substantial positive impact on the local economy and local employment and a positive impact on the State economy as a result of the substantial increases in sales, taxes, business activities, and jobs. Trades Council Ex. 2 pp. 6-7. Mr. Jin’s report sets out the economic impact in terms of

mtblic Service Commission of West Virginia Charleston 13 direct, indirect, and induced effects for new business sales, new jobs, new wages, income for the self-employed, corporate profits, and new taxes generated. His report was developed using economic simulation software called IMPLAN, an input-output model program developed by the United States Forest Service 2nd maintained by The Minnesota IMPLAN Group. Id.

Mr. Jin testified that during the ten-month construction period, the Project would require about 109 workers and generate $45.7 million in business sales for West Virginia companies. In addition, the construction would create 156 more jobs in the trucking, wood products, business and professional services, retailing, and wholesale industries in West Virginia. The new wages for the construction and other jobs would total $13.4 million. Profits for the self-employed would be $1.0 million, and corporate profits would be $2.6 million. State government would receive $1.2 million in taxes, and the federal government would take in $2.8 million. Report attached to Trades Council Ex. 2.

Darwin Snyder, president of the North Central West Virginia Building and Construction Trades Council, AFL-CIO, testified that the Memorandum Agreement entered with AES New Creek in January 2009 “ensures to the greatest extent reasonably possible” that local workers will be hired to construct the Project. He testified that the construction would be a lot of work for union members and that the size of the Project would have a positive impact on the local economy aqd local employment. Trades Council Ex. 1, pp. 2-3.

Staff reviewed economic evidence presented by AES New Creek and did not express any concerns with that evidence. Staff Ex. DLK-D.

The Commission finds that the evidence regarding economic impact provided from the two different economic simulation models shows that approximately 109 to 125 construction jobs will be necessary for the Project. Although the modeling provided by AES New Creek and the Trades Council differed relating to the indirect and induced jobs that will be created by the Project, each predicted significant economic gain during the construction period. Therefore, it is reasonable for the Commission to conclude that there will be a significant economic gain to both the State and local economy. Not only will the Project create approximately 109 to 125 local construction jobs and several permanent jobs thereafter, the Project will provide significant tax revenues for local governance and public education.

4. Part One (i) - Community Residents’ Interest in Living Separate from the Project Part One (ii) - The Project’s Negative Impacts be Minimally Disruptive to Existing Uses Part One (iii) - The Project’s Social and Environmental Impacts

Parties in siting certificate cases often differ on whether aspects of the Project involving viewshed, noise, bats, and water result in negative social and environmental impacts, and if so, whether those impacts are minimally disruptive to the local residents and whether they can live separate and apart from the impacts of the Project. Although the

Public Service Commission of West Virginia Charleston 14 Commission weighs each of the three considerations listed above when assessing community concerns, an overall analysis is more helpful. The Commission analysis, therefore, will be presented in a comprehensive fashion, as it has done in past siting certificate cases. Laurel Mountain Siting Order, p. 17.

a. Viewshed

Up to sixty-six turbines, between 389 feet and 443 feet tall, will be placed on New Creek Mountain in Grant County. AES New Creek Ex. 1, p. 3- 1; AES New Creek Ex. RAC- SD pp. 3-4; AES New Creek Ex. JB-SD, p. 1. As the Commission has recognized in previous cases, “to some degree the visual impact of wind turbines is a subjective and personal opinion; in other words ‘beauty’ truly is in the eye of the beholder and seems to be (again understandably) a function of proximity to, and to some extent, an economic interest in the Project.” Laurel Mountain Siting Order, p. 17.

AES New Creek’s Visibility Analysis provided the expected impacts on viewshed within a one-, five-, and twenty-mile radius of the Project. AES New Creek concluded that viewshed impacts within one mile are expected to be minimal because of the heavily forested and steep terrain immediately surrounding the site. AES New Creek Ex. 1, App. J., pp. 3-2. AES New Creek does not contend the wind turbines will not be visible, and indicated that the most predominant views that occur between one and five miles are within 2.6 miles of the ridge line, and generally occur in vicinities along and adjacent to two thoroughfares located east and west of the Project site (Knobly Road and Route 93, respectively). Id. AES New Creek noted that between 2.6 and 6 miles, there would be many areas with no views because of the extreme differences in topography surrounding the ridge and because of existing forested areas. AES New Creek Ex. JB-D, p. 8. AES New Creek asserted that, at distances of five miles or greater, the potential views were located predominately to the east near Lahmansville and to the southeast along Road between Lahmansville and Burlingon. AES New Creek Ex. 1, App. J., pp. 3-2. Finally, beyond ten and up to twenty miles, AES New Creek indicated that visibility will be generally limited to small areas of open land. AES New Creek Ex. JD-B, p. 8.

AES New Creek identified two cultural resources of note within five miles of the Project, the Claysville United Methodist Church and the Medley Historic District. Although neither is listed on the National Register of Historic Places (“NRHP”), both were identified as potentially eligible for the NRHP. AES New Creek Ex. GBH-D, p. 5-8. The Medley Historic District is in Grant County and is located approximately 4.9 miles from the Project, and the Claysville United Methodist Church is located approximately 3.8 miles away from the Project in Mineral County. The Project will not be visible from the majority of the resources in the Medley Historic District. Although the Project will be visible from a small corner of the church property, it is not anticipated that the Project will be visible from the Claysville United Methodist Church itself. AES New Creek Ex. GBH-D, p. 5-8.

Public Service Commission of West Virginia Charleston 15 AES New Creek indicated that the , the southern tract of the Allegheny Wildlife Management Area, the Greenland Gap preserve, and a portion of the lie within a ten-mile radius of the Project. All other managed lands lie beyond ter, miles from the nearest turbine. AES New Creek indicated that Project views are not expected at Jennings Randolph Lake or the Stony Creek Reservoir. There are some areas of the Allegheny Wildlife Management Area, including a fire tower on Pinnacle Knob, where there will be views of the Project. There may be views of the Project from the southern side of the Greenland Gap Preserve. AES New Creek Ex. 1, App. J, p. 3-3.

AES New Creek identified thirteen managed lands that lie between ten and twenty miles of the nearest proposed turbine location, including the Canaan National Wildlife Refuge, Fairfax Stone State Park, Blackwater Falls State Park, Dolly Sods Wilderness Area, portions of the Spruce Knob- National Recreational Area, and the Monongahela National Forest. Based on the viewshed analysis, these areas outside the ten-mile radius will likely have minimal views ofthe Project because of distance, intervening topography, vegetation, and atmospheric haze. AES New Creek did indicate, however, that there are some small scattered areas located in open, high elevation areas in some of the parks that may have visibility of the Project, including sections of the Canaan Valley Wildlife Refuge, Dolly Sods Wilderness Area, Spruce Knob-Seneca Rocks National Recreational Area, and the Monongahela National Forest. AES New Creek also concluded that it was very unlikely that there will be views of the Project from the Canaan Valley State Park, Fairfax Stone State Park, and the Blackwater Falls State Park. AES New Creek Ex. 1, App. J, p. 3-3.

Evidence was also presented by Staff and AES New Creek concerning Bear Rocks. Staff Ex. W-D,p. 7;AES New Creek Ex. 1, App. J, p. 5-2; AES New Creek Ex. JB-D, p. 24; AES New Creek Ex. JB-SD pp. 1-6; AES New Creek Ex. RAC-R, p. 4. This Commission in the past refused to certifj a portion of a wind power project because of its proximity to the Dolly Sods Wilderness Area and Bear Rocks. NedPower Mount Storm LLC, Case No. 02-1 189-E-CN (Commission Order dated April 2,2003, p. 117-1 18). In the NedPower proceeding, the applicant sought to construct 200 turbines in three phases, a northern, a southern, and a central phase. Id.,p. 39. The southern phase of the Project would have been in “close proximity” to the Dolly Sods Wilderness, and contemplated a turbine located approximately 1.24 miles from Bear Rocks. Id., p. 118. Given the concern over the viewshed at the Dolly Sods Wilderness Area and Bear Rocks, and based on an assumption that the applicant had the flexibility to locate the turbines from the southern phase in the central and northern phases, the Commission denied certification of the southern phase of the Project. Id.

With respect to the AES New Creek Project, the nearest turbine would be located in excess of twelve miles from Bear Rocks and the farthest turbine would be located approximately nineteen miles from Bear Rocks. As evidence of this fact, AES New Creek provided a photosimulation from Bear Rocks. AES New Creek Ex. RAC-R, p. 4. As Staff indicated, the photosimulation revealed that a number of the wind turbines from the

Public Service Commission of West Virginia Charleston 16 NedPower project can be seen from Bear Rocks. Staff Ex. WMP-D, p. 7. Indeed, Mr. Perdue noted that “a portion of Nedpower project’s turbines are a significant part of the Bear Rocks scenic view and are more readily seen than the AES New Creek wind turbines.” -Id.

AES New Creek suggested that its viewshed analysis was conservative, with AES New Creek choosing sites to provide Project views that would be most representative and evident to the public. AES New Creek Ex. 1, App. J, p. 6-2; AES New Creek Ex. JB-D pp. 12- 13. AES New Creek asserted that its photographs represented worst case views because they reflect “leaf off conditions. AES New Creek Ex. JB-D, p. 13. AES New Creek analyzed for visibility at the maximum blade tip height both versions of the GE turbines as well as the Clipper turbines. AES New Creek Ex. 1, App. J, p. 3-1; AES New Creek Ex. JB-SD pp. 1-6. Consistent with its approach, AES New Creek considered as “visible” in its analysis any turbine, even if only a small portion of the turbine blade would be visible at a distance of three miles. AES New Creek Ex. 1 pp. 3-1,3-2. Finally, in addition to providing photosimulations and viewshed maps, AES New Creek also provided the Commission with a line-of-sight analysis. AES New Creek Ex. 1 App. J, pp. 5-1 - 5-3. According to AES New Creek, the line-of-sight analysis was designed to provide an expanded approach to addressing potential views from discrete locations at higher elevation areas in managed lands that are less accessible but may have views of the Project. AES New Creek Ex. JB-D pp. 22-23.

In addition to reviewing all of the evidence regarding visibility and viewshed, the Commission conducted a View of the Project area in May 2009. The Commission visited eight sites that were selected by AES New Creek and the Alliance, including the approximate midpoint of the Project on New Creek Mountain, a view of Dolls Gap (also referred to as Saddle Mountain), Dam Site 14 off Oakdale Road and Route 93, the Greenland Gap, and the United Methodist Church at Claysville.

The Commission understands that viewshed of a wind turbine project is the most subjective (and likely most visceral) issue arising in siting certificate cases for wind power projects. As indicated, there is just as obviously no “bright line” test for viewshed. Laurel Mountain Siting Order pp. 18- 19. In this situation, although individual turbine units will be visible from various locations (as demonstrated from the View and the photo simulation evidence presented at the hearing), we conclude that the impact of the presence of the Project and view ofthe Project or its turbines will be minimally disruptive to the community and that the cumulative visual impact upon managed lands and historic and cultural sites is neither unreasonable nor burdensome.

b. Noise

Noise, like view, is another elusive and to some extent subjective factor in our deliberative process. Numerous factors affect the noise levels from wind turbine projects, including the type of turbine, weather, ground cover, distance, ambient noise, leaf and foliage

Public Service Commission of West Virginia Charleston 17 cover, elevation, wind direction, and the state of technology as applied to wind turbines and the detection of sound from wind turbine projects.

While there has been prcgress in controlling the noise from turbines, see AES New Creek Ex. AA-D pp. 15-16, as we have indicated in a previous siting certificate order:

Wind turbines obviously make noise. The question presented in this case, like prior cases before the Commission, is determining the expected degree of noise impact upon nearby residents and whether that impact is acceptable. We are required at this stage of the proceeding in these wind turbine certification applications to assess the noise impact from a wind turbine Project that is not yet certificated, let alone constructed or operating, in an industry with rapidly changing technology, upon certain possible “receptors,” receiving the noise in varying circumstances (wind, weather, foliage cover, ground cover and so forth) at multiple distances from the wind turbines within the Project area.

Laurel Mountain Siting Order, p. 22.

Moreover, during the Application process the Commission can only react to the evidence and questions presented in this proceeding. Id.; Liberty Gap Wind Force, LLC, Case No. 05-1740-E-CS (June 22,2007), p. 3 1.

With its Application, as required by Siting; Rule 3.1.m.4, AES New Creek filed a noise study conducted by TRC. AES New Creek Ex. 1 App. Q; AES New Creek Ex. AA-D; and AES New Creek Ex. AA-SD. Siting: Rule 3.1 m4.c requires a noise study of the Project’s expected operations up to one mile from the generating facility property lines. The top of New Creek Mountain is relatively sparsely populated, with only one residence located within 3,500 feet of the Project and only nine total residences located within 4,000 feet of the Project. The nearest residence, a part-time residence under lease agreement with AES New Creek and located on the northern part of the Project area, is about 1,300 feet away from the nearest turbine. AES New Creek Ex. 1, App. Q, p. 3-1.

Ambient noise levels - From April 1-1 1, 2008, TRC conducted an ambient noise monitoring program at four residential locations, one located north of the Project area; one located to the south of the Project, and two located on the eastern side of the Project area. AES New Creek Ex. 1, App. Q, Figure 1; AES New Creek Ex. AA-D pp. 8-9. To ensure that it understood the ambient sound levels in the northwestern portion of the Project area, TRC measured ambient sound at a fifth location from October 1-11,2008. AES New Creek Ex. RAC-R, p. 5; AES New Creek Ex. 1, App. Q, p. 3-1.

As is required by the Commission, AES New Creek used the average day-night sounds levels for both ambient and operational noise with the Leq6 descriptor. AES New

6 Equivalent Noise Level (“Leq”) is a cumulative metric that averages noise levels over time - an hour, day, month or quarter.

Public Service Commission of West Virginia Charleston 18 Creek also applied the 10 dBA penalty to all noise that occurs at night. AES New Creek used monitors that were fitted with foam windscreens to reduce wind-generated noise. AES New Creek provided certificates of calibration for the monitors. AES New Creek Ex. 1, App. Q, p. 2-2. Finally, measurements were conducted by a 302rd Certified Member ofthe Institute of Noise Control Engineering, in accordance with IS0 1996 and good engineering practice.

_.Id.

TRC found that the ambient noise levels varied widely depending on the time of day, wind speeds and location. The existing day-night average noise levels (“DNL”)7were from 30 to 60 decibels (“dBA”), with the most frequent range being 45 to 49 dBA. The next most frequent range was 40 to 44 dBA. AES New Creek Ex. Ex. AA-D pp. 9- 10.

Operational sound levels - In addition to an ambient noise study, TRC also conducted noise modeling studies of both construction and operational sound levels using the CadnaA model. Id. The Commission has in previous cases indicated that the use of the CadnaA model is appropriate. See e.g. Laurel Mountain Siting Order, p. 25.

TRC built several assumptions into its operational sound study that result in a more conservative calculation, e.g., result in higher sound levels. In conducting the AES New Creek operational noise study, TRC assumed: (1) that the ground cover would be completely acoustically reflective (although TRC presented testimony that the area’s ground cover is highly absorptive); (2) standard atmospheric conditions that are favorable to sound propagation; (3) all turbines within a five-kilometer radius would be operating at the same time; (4) that there was not extensive tree cover (although tree cover acts to further reduce noise); and (5) that all receptor locations were downwind of all turbines at all times (aphysical impossibility). AES New Creek Ex. AA-D pp. 6-7. TRC obtained the maximum sound levels from the manufacturers of each turbine and used these sound levels in the operational model. AES New Creek Ex. 1, App. Q, p. 4-2; AES New Creek Ex. AA-SD, p. 2.

The ambient day-night noise levels at most residences near the Project ranged from dBA levels in the upper 30s to the 40s, with the most frequent day-night noise levels ranging from 45 to 49 dBA. The AES New Creek operational noise modeling study results in a maximum day-night noise level for the most affected full time residence at 50.3 dBA DNL for the 1.5 MW GE turbine at full load, 5 1.3 dBA DNL for the 2.5 MW GE turbine at full load, and 53.3 dBA DNL for the Clipper turbine at full load. AES New Creek Ex. AA-D pp. 12-13. Most of the residences in the Project area had anticipated operational maximum day-night noise levels below 52 dBA DNL.

7 The Day-Night Average Sound Level (“DNL”), expressed in decibels, is a 24-hour average noise level used to define the level of noise exposure on a community. The DNL represents the average sound exposure during a 24-hour period and does not represent the sound level for a specific noise event.

Public Service Commission of West Virginia Charleston 19 Mr. Agresti testified that the United States Environmental Protection Agency recommends an outdoor noise level of 55 dBA DNL for “outdoor recreational areas and farms and other outdoor areas where people spend widely varying amounts of time and other places in which quiet is a basis for use” and that this criteria was developed to provide a safety margin. The Project’s maximum calculated operational noise level at the nearest full-time residence - 53.3 dBA - is below the EPA protective criterion of 55 dBA. AES New Creek Ex. AA-D, p. 15. Moreover, many residences are expected to experience maximum Project-related sound levels of less than 50 dBA DNL. Id.

TRC also analyzed the Project related to low frequency sound. Mr. Agresti noted the technological advances made in sound control for wind turbines and testified that modern wind turbines do not generate a significant amount of operational noise as compared to older wind turbines. Older turbines had low frequency noise, aerodynamic noise and mechanical noise problems. AES New Creek Ex. AA-D pp. 15-16. Low frequency sounds are generally those that occur from about 30 to 125 Hertz. According to Mr. Agresti, low frequency noise is measured through C-weighted sound levels. The analysis conducted by TRC indicated that the highest C-weighted sound level expected at any nearby full-time residence would be 63.3 dBC, a level below recommended criteria levels. Id. pp. 17-18.

Based on these findings, TRC concluded that a comparison of ambient levels to calculated Project levels revealed that the Project noise levels are expected to be generally the same as or slightly higher than ambient noise levels. TRC concluded that Project operational noise levels are not expected to be objectionable, and no significant noise impacts are anticipated because of Project operation. AES New Creek Ex. 1, App. Q, p. 4-3.

Neither the governing statute nor the Siting Rules contain any operational noise limitations or guidelines. Instead, they require us to balance various project impacts and their effect on the community. The AES New Creek study complied with Commission requirements, accurately portrayed ambient noise levels that are typical for a rural community, and employed a variety of conservative assumptions to allow us to assess the “worst case” scenario for the Project’s noise impacts. Even under all of the conservative assumptions, the highest level of predicted operational noise was 56.6 dBA DNL for the Clipper turbine, 53.9 dBA DNL for the 2.5 MW GE turbine, and 52.1 dBA DNL for the 1.5 MW GE turbine, and that was at a part-time residence under lease agreement with AES New Creek. AES New Creek Ex. 1, App. Q, p. 4-1; AES New Creek Ex. AA-SD, p. 2. The next affected residence, located 3,600 feet from the Project, had a level of predicted operational noise of 53.3 dBA DNL for the Clipper turbine, 53.9 dBA DNL for the 2.5 MW GE turbine, and 50.3 for the 1.5 MW GE turbine. AES New CreekEx. AA-SD, pp. 2-3. The Commission is not required to conclude that the Project would never impact existing ambient noise levels, nor would that be a reasonable thing to do. Based upon the totality of the evidence presented to us, we conclude that the Project will emit some noise, but the operational noise levels should not be objectionable. The Commission further concludes that, to the extent that operational noise results in negative impacts, those negative impacts are expected to be as minimally disruptive to existing property uses as is reasonably possible.

Public Service Commission of West Virginia Charleston 20 Construction Sound Levels -For the construction noise model for the Project, TRC used the same conservative assumptions from the operational sound model plus one more - that five adjacent turbine sites would be under construction simultaneously and all would produce the maximum amount of construction noise. AES New Creek Ex. AA-D, p. 7.

Mr. Agresti testified that construction noise would not cause a significant impact for the community. AES New Creek Ex. AA-D pp. 10-12. Even under the “five adjacent turbines under construction simultaneously test,” the maximum predicted construction noise level at the most affected residence, a part-time residence located approximately 1,300 feet from the nearest turbine, is 54.1 dBA, and the maximum predicted noise level for the next most affected residence during construction is 43.9 dBA. Mr. Agresti also testified that the construction noise will not be permanent and that ambient levels were at times within the range of or greater than 43.9 dBA. Id. Mr. Agresti also stressed that these maximum noise levels were not likely to be achieved because the analysis was based on several conservative assumptions, among them, the extremely unlikely circumstance that three excavators will be operating at full load at five turbine sites simultaneously. Similar to the conclusion for operational sound impacts, the Commission also concludes that, to the extent that construction noise results in negative impacts, those negative impacts are expected to be as minimally disruptive to existing property uses as is reasonably possible, and are not unreasonable.

c. Birds and Bats

In support of its Application, and as required by Siting Rule 3.1m.2, AES New Creek filed the following surveys and assessments prepared by Stantec Consulting:

1. Spring, Summer, and Fall 2008 Bird and Bat Migration Survey Report (“2008 Report”);

2. Fall 2007 Bird and Bat Migration Survey Report; and

3. New Creek Mountain Bird and Bat Risk Assessment: A Weight-of- Evidence Approach to Assessing Risk to Birds and Bats at the Proposed New Creek Mountain Project, West Virginia (“Risk Assessment”).

AES New Creek Ex. TP-D pp. 3-4; AES New Creek Ex. 1, App. 0. Stantec and AES New Creek developed survey methods for bird and bat surveys based on a combination of standard methods developing within the wind industry for preconstruction bird and bat surveys as well as through its consultation with the WVDNR and the West Virginia office of the USFWS. Additionally, through the course of its investigations, Stantec regularly consulted with the USFWS and WVDNR to provide updates regarding survey progress, to obtain appropriate permits where necessary, and to confirm the sufficiency of the manner in which the surveys were conducted. AES New Creek Ex. TP-D pp. 4-5. In its Application and through the

- Public Service Commission of West Virginia Charleston 21 testimony of Mr. Peterson, AES New Creek provided the results of its investigations with respect to raptors, breeding birds, nocturnal migration activity, bats, and Threatened and Endangered species.

Raptors - The surveys documented relatively low levels of raptor migration in the Project area, as compared to other regional sites that were simultaneously monitored. AES New Creek witness Trevor Peterson testified that raptors appear to be at low risk of collision with the Project’s turbines. Field surveys and a literature review did not document particular features of the Project that would suggest an increased risk to raptors.

Although small numbers of eagles appear to migrate above the Project area during spring and fall, and limited telemetry data suggest that individual golden eagles are present in the vicinity of New Creek during the winter, eagles are not known to nest within the Project area or vicinity, and eagle mortality has not been documented at any existing wind facility in the eastern United States. AES New Creek Ex. TP-D pp. 14-15.

Breeding Birds - The surveys documented a relatively low diversity of breeding birds within the Project area, with the most frequently detected species relatively common in the region. While a small number of breeding birds will likely collide with turbines, population level impacts for any single species are not expected as a result of the Project. AES New Creek Ex. TP-D pp. 30-3 1.

Nocturnal Migration Activity -Radar surveys at New Creek Mountain documented large numbers of nocturnal migrants in the air space above the ridge line. However, most night-flying birds pass over AES New Creek Mountain at altitudes high above the maximum height of the proposed turbines. Moreover, Stantec expected patterns and levels of mortality of nocturnal migrants that would be similar to those documented at other operational wind projects in the region. AES New Creek Ex. TP-D pp. 11-12.

- The potential impacts to bats are expected to generally follow patterns similar to those documented at other facilities, and will consist largely of collision mortality during the spring and particularly the fall migration seasons, with bat mortality potentially higher on warm, calm nights when long distance migratory species are expected to be the most vulnerable to collision mortality. AES New Creek Ex. TP-D pp. 25-26. To reduce the potential for impact on calm nights, the blades of the New Creek turbines will be feathered so as not to operate when wind speeds are less than 24 meters per second. Tr. I., p. 60 (Mr. Colman).

Mist-netting surveys were conducted at twelve different sites on New Creek Mountain between April 18,2008 and May 15,2008; between May 30,2008 and July 5,2008; and between September 1,2008 and September 14,2008; equating to 150 nights of mist-netting. AES New Creek Ex. 1 App. 0,2008 Report, p. 60. No Threatened and Endangered species were captured through the mist-netting surveys. AES New Creek Ex. SH-D, p. 11 ; AES New Creek Ex. TP-D pp. 7-8, 16, 19.

Public Service Commission of West Virginia Charleston 22 The USFWS Recovery Plan Guidelines require studies to be conducted between May 15 and August 15 when Indiana bats are at their summer breeding range. AES New Creek indicated, however, that the USF W§ recommended the additional spring and fall mist-netting studies that were conducted outside of the May 15-August 15 time period. AES New Creek Ex. 1, App. 0, 2008 Report, p. 53. As the Commission has recognized in previous cases, the USFWS Recovery Plan requires one net site for every kilometer of habitat. AES New Creek consulted with the USFWS and distributed twelve mist-net sites to sample all habitats within the Project area to maximize the possibility of capturing Indiana bats along the Project’s 12 kilometers. AES New Creek Ex. 1, App 0, 2008 Report, p. 1. Finally, Stantec conducted desktop and field surveys to document potential bat hibernacula near the Project area and obtained the locations of known hibernacula within thirty miles of the Project from the WVDNR. AES New Creek Ex. TP-D, p. 21.

AES New Creek also noted that eastern small-footed myotis were detected during each of the three survey periods. Although rare throughout the State, eastern small-footed myotis appear to be common on New Creek Mountain. To better understand the behavior of the eastern small-footed myotis, Stantec conducted radio telemetry surveys to document roosting habits of this species on New Creek Mountain. AES New Creek Ex. TP-D pp. 18-19. Through the radio telemetry, Stantec detected a number of eastern small-footed myotis roosts on the western slope of New Creek Mountain, in the cleared transmission line corridor to the south of the Project, and in vertical rock cliff faces within Greenland Gap. AES New Creek Ex. TP-D, p. 19,27.

Given their current presence, following construction, eastern small-footed myotis are still expected to forage within the Project area. However, these species are thought to primarily feed and fly below the tree canopy based on their small size and foraging habits. Therefore, Stantec suggested that collision mortality for the eastern small-footed myotis is not expected to constitute as great a risk in comparison to migratory species. AES New Creek Ex. TP-D, p. 27.

Based on the record, it is clear to us that AES New Creek consulted regularly with the USFWS and WVDNR concerning the scope of the studies undertaken by AES New Creek, both during the development and implementation of those studies. In fact, AES New Creek conducted additional studies at the USFWS’s request. Finally, the scope of work performed in this proceeding is similar to that undertaken by AES Laurel Mountain and deemed sufficient in the AES Laurel Mountain proceeding. &Laurel Mountain Siting Order, p. 34. Accordingly, the Commission concludes that AES New Creek’s surveys were reasonable and sufficient.

Threatened and Endangered Species - There is no evidence that a wind power project has resulted in the death of a Threatened and Endangered bat in the United States. AES New Creek Ex. 1, App. 0, Risk Assessment, p. 6 1. Although AES New Creek advised the Commission that it is possible that a Threatened and Endangered Species may

Public Service Commission of West Virginia Charleston 23 occasionally pass through the Project site, AES New Creek asserted that the Project is likely to have a minimal impact on Threatened and Endangered species. AES New Creek Ex. TP- D, p. 8. The Project is not located in the immediate vicinity of hibernacula containing Threatened and Endangered bat species. Id. In ftict, the nearest hibernaculum for the federally endangered Virginia big-eared bats is located approximately nine miles southwest of the Project area and the nearest hibernaculum for the federally endangered Indiana myotis is located approximately 18.5 miles south of the Project area. Id. pp. 20-2 1.

The Commission concludes that the evidence submitted by AES New Creek concerning Threatened and Endangered Species is credible because the studies undertaken were complete, reasonable and conducted in consultation and cooperation with the USF WS and WVDNR. No Threatened and Endangered species were detected through the mist- netting surveys, and as confirmed by WVDNR, the Project area is not located in the immediate vicinity of hibernacula containing Threatened and Endangered bat species. Therefore, we agree that no Federally Threatened and Endangered species are expected to breed, reside in, or use the Project area as primary habitat or breeding area.

d. Water

For the studies related to water and hydrology, TRC surveyed US. Geological Survey (“USGS”) maps, conducted field observations, and reviewed the United States Department of Agriculture (“USDA”) Natural Resources Conservation Service (“NRCS”) (formerly the Soil Conservation Service) soil map units for the Project area. AES New Creek. Ex. 1, p. 13-4. Because there are no surface water body and sub-surface water sources likely to be affected by the Project, AES New Creek did not provide water budgets, surface flows, and water tables.

With respect to wetlands, TRC wetland delineation crews surveyed the proposed Project area using the Federal Routine Determination Method presented in the USACE Wetlands Delineation Manual (“USACE 1987”). One wetland and potential jurisdictional watercourse was identified within the Project Boundary. The forested wetland occurs on the lower western slope ofNew Creek Mountain. The Project will not impact this wetland. AES New Creek Ex. 1, pp. 13-4 - 13-5; AES New Creek Ex. SH-R, pp. 1-2; Tr. I, pp. 24-26 (Mr. Colman). Upon review, the Commission concludes that AES New Creek has provided a sufficient and complete water study and information related to the wetlands delineations in support of its Application.

5. Proposed Conditions and the Memorandum Agreement

The Parties in the Joint Stipulation agreed to several conditions, most of which are either identical or similar to conditions that the Commission has imposed in previous siting certificate cases. The Commission will address each condition below.

Public Service Commission of West Virginia Charleston 24 Preconstruction Certificate Issues

Prior to commencing construction, the AES New Creek must file a verified statement indicating that all pre-constructien conditions and requirements of the certificate have been met.

AES New Creek must not dispose of excavated rock and/or any bedding material during or following construction of the facility by spreading the material on agricultural land.

AES New Creek must dispose of all contaminated soil and construction debris in approved landfills in accordance with appropriate environmental regulations,

AES New Creek must design and install any needed fire protection systems in accordance with the National Fire Protection Association or other accepted standards.

AES New Creek must coordinate with appropriate fire safety and emergency personnel during the pre-construction stage of the Project to promote efficient and timely emergency preparedness and response.

The siting certificate shall become invalid if AES New Creek has not commenced a continuous course of construction within five years of the date the final certificate is granted or has not completed construction by the tenth year without petitioning the Commission for approval to expand these time frames.

AES New Creek must file evidence that it has obtained any necessary environmental permits and/or certifications prior to commencing construction (including letters from United States Fish and Wildlife Service, West Virginia Division of Natural Resources, West Virginia Division of Culture and History and West Virginia State Historic Preservation Office) indicating that either AES New Creek does not need to take further action or outlining what action AES New Creek needs to take to be in compliance with that agency’s rule or laws prior to any grading, soil excavation, and/or habitat removal or causing a similar action by others.

These seven conditions are identical to General Preconstruction and Construction Certificate Issue conditions imposed in the Beech Ridge and AES Laurel Mountain proceedings, and there is no reason to depart from that approach for the New Creek Project.

Public Service Commission of West Virginia Charleston 25 (8) AES New Creek must file a copy of the wetlands survey and delineation, final endangered species study with any required mitigation plans, and historical/archaeological significance study with any required mitigation plans prior tc ccmmencing ccnstructicn. If AES New Creek is required to obtain approval and/or acceptance of the wetlands survey and delineation, it shall provide such approval and/or acceptance to the Commission prior to commencing construction.

This condition is different than a similar condition that was imposed in the Beech Ridge and AES Laurel Mountain proceedings. In those proceedings, the applicant was required not only to file a copy of the wetlands survey and delineation, but was also required to provide approval or acceptance of it. See e.g. Laurel Mountain Siting Order, p. 70. AES New Creek has indicated that, unlike those cases, the wetlands survey and delineation did not reveal the presence of any wetlands that would require approval ofthe wetlands survey and delineation. In other words, the Project is not expected to impact any wetlands. AES New Creek Ex. SH-R, p. 2-3. Based on this assertion, the Stipulating Parties agreed to this modified condition, which requires AES New Creek to file the wetlands survey and delineation report and to obtain approval or acceptance of the report ij'it is required to do so. Given these facts and assertions by AES New Creek, it is reasonable to accept this condition as suggested in the Joint Stipulation.

(9) AES New Creek must comply with the Endangered Species Act (16 U.S.C. 8FERC 1531 etseq.), theMigratory BirdTreaty Act (16U.S.C. tj 701 et seq.), and, if applicable, the National Environmental Policy Act of 1969 (42 U.S.C. 8 4321 et seq.) in both the construction and operation of the Project. If any authorized governmental agency or court with competent jurisdiction finds that AES New Creek is not complying with any one of the above three acts in either the construction or operation of the Project, then AES New Creek must notify the Commission in writing in this case of any such finding within ten (10) days of any such finding being made. Furthermore, the Commission may seek any legal remedies it has jurisdiction to seek, including injunctive relief, to address any such findings.

This Commission imposed this condition in the Beech Ridge and AES Laurel Mountain proceedings, and there is no reason to depart from that approach for the New Creek Project.

(10) AES New Creek must A) construct and maintain a fence around the O&M building and substation; B) lock all turbine doors unless access is needed for maintenance purposes and C) for the life of the Project, install and maintain safety hazard signs at appropriate intervals around the Project's perimeter, at the O&M building, substation, turbine towers, and any other location(s) where safety hazards are of concern.

Public Service Commission of West Virginia Charleston 26 ii This condition is new. It was initially suggested by Staff in the direct and rebuttal testimony of Mr. Perdue. Staff indicated that it was concerned about safety related to the Project and asserted that the condition would assist in ensuring safety at the Project site. Staff Ex. W-D,pp. 12-13; Tr. I, p. 79 (Mr. Perdue). The Stipulating Parties agreed to this condition. The Commission believes that this condition (i) is reasonable and (ii) will assist in ensuring safety at the Project site.

(1 1) Prior to commencing construction, AES New Creek shall have obtained a report from a qualified independent third party regarding a decommissioning fund to cover the dismantling of the turbines and towers and land reclamation. The report of the qualified independent party will provide the analysis to set the fund amount. The report shall be updated thereafter as mutually agreed between AES New Creek and the Grant County Commission, but no less frequently than every five years thereafter. The fund amount will vary over time depending on changes in the estimated market or salvage value of the Project, the estimated cost of dismantling and removing the turbines, and the expected ongoing life of the Project. AES New Creek shall obtain the approval of the Grant County Commission of the evaluative expert and each of the periodic reports. The decommissioning fund shall not be part of AES New Creek’s assets. Within 90 days of any report that requires a contribution to the decommissioning fund, AES New Creek shall make that contribution into an escrow account held by an agent pursuant to an escrow agreement between AES New Creek and the Grant County Commission. The methods for deposits to and disbursements from the fund shall be established within and governed by the escrow agreement. Furthermore, the escrow agreement must clearly reflect the role of the Grant County Commission and state that the obligations set forth in the escrow agreement apply to AES New Creek, its successors, and assigns. The escrow agreement and each report of the qualified independent third party shall also be filed with the Commission as a closed entry in this matter. The Commission retains the right to hire its own evaluative expert to review any of the periodic reports and to take such further action within its jurisdiction as the Commission determines is necessary to protect the public interest.

This Commission imposed this condition in the AES Laurel Mountain proceeding, and there is no reason to depart from that approach for the New Creek Project.

General Construction and Operational Phase Certificate Issues

(1) During construction, AES New Creek shall: a) Require contractors to use standard noise buffers on all construction equipment and trucks;

Public Service Commission of West Virginia Charleston 27 b) Require contractors to use pile driving equipment which have the least noise impact; c) Perform construction activities mostly during the daylight hours; d) Avoid noise impacts at certain mise-sensitive locations, such as a church, during the weekend church activities and services and during other normally-scheduled church weekday activities; e) Limit any dynamiting to daylight hours and follow all State and Federal rules, regulations, and/or laws.

AES New Creek must coordinate with appropriate fire safety and emergency personnel during all other stages of the Project, including construction and operations, to promote efficient and timely emergency preparedness and response.

AES New Creek must file evidence of its EWG status from FERC prior to commencing construction.

If AES New Creek seeks to transfer its certificate, AES New Creek is required pursuant to Siting Rule 7.1 to notify the Commission in writing of the identity of the transferee and submit an affidavit from the transferee attesting to the transferee’s willingness to abide by the terms of this siting certificate, as issued. This condition applies anytime - not just in the operational stage.

AES New Creek will consult with representatives of Commission Staff, the U.S. Fish & Wildlife Service, and the West Virginia Division of Natural Resources (collectively, the “Consulting Team”) on the scope, development, and implementation of post-construction studies (“Studies”) to commence within a reasonable time, and in any event no later than one year following the commercial operation date of the Project: a) The Studies will assess the Project’s impact on bat life, the potential for adaptive management strategies to mitigate those impacts, the expected cost of those strategies over a range of mitigation effectiveness levels, and any other aspects of bat/wind turbine interactions identified and agreed to between AES New Creek and the Consulting Team; b) To the extent AES New Creek and the Consulting Team agree that the Project’s risk profile requires it, the Studies will also assess the impact on the Project on birds, including raptors; c) AES New Creek commits to conduct at least one year of Studies. To the extent that AES New Creek and the Consulting Team determine, based upon the results of the Studies

Public Service Commission of West Virginia Charleston 28 undertaken during the first year of commercial operation, the Project would benefit from additional study and analysis, AES New Creek will conduct additional Studies during part or all of the next two years of commercial operatim. Although it may choose to do so, AES New Creek will have no obligation to conduct any Studies beyond the third year of commercial operation; d) AES New Creek will file copies of each Study with the Commission and provide copies to each member of the Consulting Team within thirty days of its completion.

This Commission imposed these five conditions in the AES Laurel Mountain proceeding, and there is no reason to depart from that approach for the New Creek Project.

(6) AES New Creek is committed to environmental stewardship and to minimizing the Project’s impact on migratory bats. Consistent with this commitment, if the Studies demonstrate that the Project causes significant levels of bat mortality and that adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective, AES New Creek commits in good faith to consider the implementation of those strategies.

The Commission imposed this condition in the AES Laurel Mountain proceeding, and the Stipulating Parties have recommended that the Commission adopt it in this proceeding. At the hearing, the Commission questioned why AES New Creek would not adopt adaptive management strategies if those adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective. In other words, the Commission questioned why AES New Creek should only be required to “in good faith” consider implementing adaptive management strategies if they are proven to be effective and economically feasible from AES New Creek’s perspective. In response, AES New Creek witness Robert Colman indicated that, if there were adaptive management strategies that were proven to be effective and economically feasible from AES New Creek’s perspective, then AES New Creek would probably implement them, but that it desired flexibility in dealing with adaptive management strategies. Tr. I, pp. 44-45 (Mr. Colman).

The Commission understands AES New Creek’s position and its desire for flexibility. However, if the Studies demonstrate that the Project causes significant levels of bat mortality and that adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective, then AES New Creek should implement those strategies, and not merely consider them in good faith. Accordingly, the Commission will modi9 this condition as follows:

(6) AES New Creek is committed to environmental stewardship and to minimizing the Project’s impact on migratory bats. Consistent with this

Public Service Commission of West Virginia Charleston 29 commitment, if the Studies demonstrate that the Project causes significant levels of bat mortality and that adaptive management strategies are proven to be effective and economically.. feasible from AES New Creek’s perspective, AE§New Creek I Ll shall implementatimm€ those strategies.

(7) AES New Creek will minimize the visibility of the Project by only using Project lighting in the presence ofthe Project’s personnel and any other persons authorized to be in the area except that AES New Creek may use Project lighting as required by the Federal Aviation Administration and any applicable fire or safety code, regulation, or accepted good utility practice.

This condition is similar, yet slightly broader than conditions imposed in the AES Laurel Mountain and Beech Ridge proceedings. In the AES Laurel Mountain proceeding, AES Laurel Mountain was required to minimize visibility by using as little lighting as possible and was required to use Project lighting as required by the Federal Aviation Administration and any applicable fire or safety code, regulation, or accepted good utility practice. The Staff recommended a more specific condition which specifically limits visibility beyond that required by the Federal Aviation Administration and any applicable fire or safety code, regulation, or accepted good utility practice. Tr. I, p. 80 (Mr. Perdue); Tr. I, p. 30 (Mr. Colman). The parties to the Joint Stipulation agreed to this modification. The Commission believes this condition is reasonable and should be adopted.

(8) In the unlikely event that the blasting associated with construction activities negatively affects the groundwater aquifer on or around New Creek Mountain, AES New Creek will take immediate steps to resolve those negative effects.

This Commission imposed this condition in the AES Laurel Mountain proceeding, and there is no reason to depart from that approach for the AES New Creek Project.

(9) AES New Creek must file copies of the remaining interconnection studies and final interconnection agreements prior to commencing operation.

This Commission imposed a similar condition in the AES Laurel Mountain and Beech Ridge proceedings that required the applicants to file interconnection agreements between the applicant and PJM. The parties to the Joint Stipulation have agreed to this condition. The condition is reasonable and should be adopted for the Project.

The Stipulating Parties also agreed that the Commission should approve the Memorandum Agreement dated January 14,2009, between AES New Creek and the Trades Council and make clear that the Commission anticipates that all representations and

Public Service Commission of West Virginia Charleston 30 commitments made by the parties therein shall be kept by the parties. The Stipulating Parties also agreed that the Commission should make clear that its approval of the Memorandum Agreement does not mean the Commission is the proper forum to resolve any disputes that may arise from operatigg under the Agreement. The Commission has issued similar rulings in previous siting certificate cases. There is no reason to depart from that approach for the Proj ect .

C. The Commission’s Application of Part Two

As is explained in Part One above, the Commission concludes that taken as a whole, the positive impacts relating to the various interests outweigh the negative impacts on the various interests in this matter. See W.Va. Code $24-2- 1lc(c). In Part Two the Commission decides whether a project’s public funding, if any, and property tax abatement, if any, offends the public interest.

AES New Creek testified that no public fbnding or property tax abatement was involved with this Project. AES New Creek Ex. RAC-D, p. 15. Staff agreed with this conclusion. Tr. I, p. 74 (Ms. Kellmeyer). Because there is neither public funding nor property tax abatement with the AES New Creek, no fbrther analysis is needed. Based on the record then, the Commission concludes that AES New Creek should be issued a Siting Certificate for this Project.

111. FINDINGS OF FACT

The Application and General Description of the AES New Creek Mountain Project

1. AES New Creek is a Delaware limited liability company, and is wholly owned by AES Corporation. AES New Creek Ex. 1, App. B, p. 2; AES New Creek Ex. RAC-D, p. 6.

2. On December 19, 2008, AES New Creek filed an Application for a Siting Certificate (AES New Creek Ex. l), pursuant to W.Va. Code 824-2-11c and the Commission’s Siting Rules. Included within AES New Creek Ex. 1 were several figures which contain maps responsive to the Siting Rules, including a map establishing the Project Boundary (Figure 1.2-1), a Site Location Map (Figure 1-3-1), a Five-Mile Radius Map (Figure 8.1- l), a Preconstruction Map (Figure 8.2- l), and Generating Facility maps for each of the potential turbine layouts (Figures 8.3-1A and 8.3-1B). No party submitted any testimony, evidence, or suggestion that the maps included in the Application failed to comply with the Siting Rules. Staff witness Wayne Perdue specifically testified that the maps provided by AES New Creek fulfilled the requirements of the Siting Rules. Staff Ex. WMP-D, p. 5.

3. In the Application AES New Creek is seeking authorization for the construction and operation of a $308 million wind turbine wholesale electric generating facility, including related interconnection facilities. AES New Creek proposes to construct

Public Service Commission of West Virginia Charleston 31 up to sixty-six wind turbines, between 118.5 meters and 135 meters feet tall, on an approximate seven-mile stretch of the New Creek Mountain ridge line from a point approximately one mile north of Greenland Gap near Greenland and proceeding in a northern direction to the county line with Mineral County. AES New Creek Ex. I, p. 1- 1; AES New Creek Ex. RAC-D, p. 8.

4. In order to assess the hll range of potential Project impacts, AES New Creek provided an analysis of Project impacts assuming the use of either a 1.5 MW GE turbine (the smallest turbine in terms of physical size, with the most potential turbines) and the 2.5 MW Clipper turbine (the largest turbine in terms of physical size, with the fewest potential turbines). The Application provided the Commission with an analysis of both turbine configurations (sixty-six 1.5 MW GE turbines; 53 2.5 MW Clipper turbines) so that the Commission and the public could see the maximum potential impact for the ultimate Project configuration selected. AES New Creek later supplemented the Application by providing information relating to a 2.5 MW GE turbine, which is 5.5 meters taller than the 2.5 MW Clipper turbine. AES New Creek’s analysis of the 2.5 MW GE turbine, when compared to the 1.5 MW GE turbine and the 2.5 MW Clipper turbine, shows that the potential use of a 2.5 MW GE turbine will have no material effect on the Project’s various impacts described in the Application and supporting direct testimony. AES New Creek Ex. RAC-SD, pp. 2-3; AES New Creek Ex. JB-SD; AES New Creek Ex. AA-SD; AES New Creek Ex. TP-SD.; see Staff Ex. WMP-D, p. 5 (“The maps for the new GE turbine indicated there was no perceivable change in the viewshed due the additional height of the 2.5 MW GE turbine.”).

5. The Project would be located on approximately 4,900 acres of leased land on New Creek Mountain. The Project site on New Creek Mountain and its surrounding area consist primarily of undeveloped mountainous woodlands. Approximately 295 acres will be required for construction of the Project. The final footprint of the Project is expected to encompass approximately fifty acres, which is approximately one percent of the anticipated leased land. In the Application, AES New Creek provided the location of the Project Boundary, which encloses a strip of land encompassing approximately 795 acres, approximately 600 to 1,000 feet wide along the New Creek Mountain ridge line where the proposed turbines and access road would ultimately be sited. AES New Creek indicated that the final lay-out and precise location of each turbine may change within the Project Boundary depending on turbine selection and the micro-siting process. AES New Creek Ex. 1, p. 1-1 - 1-2.

6. The top of New Creek Mountain is relatively sparsely populated, with only one part-time residence within 3,500 feet of the Project, and only nine total residences within 4,000 feet of the Project. The only residence within 3,500 feet is located approximately 1,300 feet from the nearest turbine. That current resident uses the residence on a part-time basis, and has entered into a lease agreement with AES New Creek. All other residences lie beyond 4,000 feet from the nearest proposed turbine location. There are eighteen structures located within a one-mile radius of the Project that are not full-time or part-time residences. Instead, those structures are seasonal structuredhunting cabins that are not stick-built

Public Service Commission of West Virginia Charleston 32 structures or manufactured homes that are capable of human occupation on a year-round basis. AES New Creek Ex. RAC-R, p. 5.

7. AES New Creek has already acquired the necessary leasehold interests sufficient to build the Project. AES New Creek Ex. RAC-D, p. 8-9.

8. AES New Creek anticipates filing for Exempt Wholesale Generator Status and intends to operate as an Exempt Wholesale Generator. Rates charged for the Project’s electricity would be subject to regulations by FERC. AES New Creek intends to file a market-based schedule with FERC for negotiated rates. AES New Creek Ex. RAC-D, p. 14; AES New Creek Ex. 1, App. B, p. 2.

9. Upon the completion of the Project, the Project will be used by AES New Creek to generate electricity exclusively for wholesale sales in the competitive market, and AES New Creek will bear full financial risk associated with the construction and operation of the Project. AES New Creek indicated that no West Virginia utility ratepayer will bear any risk associated with the Project. AES New Creek Ex. RAC-D, p. 14.

10. The Project has anticipated generation capacity between 99 MW and up to 160 MW of generation. AES New Creek Ex. 1, App. A, at 7 2.

11. The Project will not require the construction of a new transmission line. AES New Creek Ex. 1, p. 4-1; AES New Creek Ex. RAC-D, p. 10.

12. A collector system of buried cables will conduct electricity from each of the wind turbines to a new substation to be located south of the southernmost turbine. New interconnecting lines will then convey the Project’s electricity from the new substation to an existing 500 kV transmission line that runs between the Mt. Storm and Doubs substations. In addition to the costs to construct the wind turbines, AES New Creek will pay all of the costs of the interconnecting lines and substation, as well as the costs for any other upgrades for the Project to deliver its electricity to the Mt. Storm to Doubs 500 kV transmission line. AES New Creek Ex. 1, p. 4-1; AES New Creek Ex. RAC-D, p. 10.

13. AES New Creek entered into a Generation Interconnection Feasibility Study Agreement with PJM on February 1, 2008, and a System Impact Study Agreement on April 30,2008. AES New Creek received a completed System Impact Study and a Facility Study Agreement from PJM. AES New Creek will enter into all necessary remaining agreements with PJM to govern the Project’s operation and interconnection with the Mt. Storm to Doubs 500 kV transmission line. AES New Creek Ex. 1, p. 4-1; AES New Creek Ex. RAC-D, p. 14.

14. AES New Creek has indicated that the Project will not be fimded by public sources and there are no agreements with public entities for any tax abatements. AES New Creek has not received any loans, grants, or contributions from the State or Federal

Public Service Commission of West Virginia Charleston 33 Government. AES New Creek Ex. 1, p. 12-1; AES New Creek Ex. RAC-D, p. 15; Staff Ex. DLK-D, p. 2. Thus, no public funds will be used, and there are no agreements with public entities regarding the Project.

15. If a 160 MW Project is constructed, AES New Creek will be paying approximately $673,000 per year to Grant County and approximately $2 19,000 per year in State taxes for the first ten years and $437,000 annually thereafter. AES New Creek Ex. 1, p. 12-3.

Publication, Public Comment, the Commission View, and the Joint Stipulation

16. On December 30,2008, AES New Creek published notice of its filing of an Application for a Siting Certificate in the Grant County Press in Grant County and the Charleston Gazette in Kanawha County. In addition to making the publication of notice of filing, AES New Creek also placed a copy of the Application, including its appendices, at the Grant County Public Library. See Application cover letter.

17. The Commission conducted a public comment hearing in Petersburg on April 30,2009. At the public hearing, twelve individuals spoke in favor of the Project, while four spoke against the Project.

18. By the end of June 2009, comment letters filed with the Commission in support of the Project numbered 44, and the number of comment letters filed in opposition approached 107.

19. On May 1, 2009, the Commission conducted a View of the Project area, visiting approximately eight sites in the Project area.

20. On July 2,2009, the Parties submitted a Joint Stipulation. The Parties agreed that the Commission should issue an order granting AES New Creek a Siting Certificate to construct the Project, subject to a host of preconstruction, construction, and operational conditions that were also agreed to by the Parties.

State and Regional Need

2 1. AES New Creek indicated that the Project would provide needed energy and capacity to the electric power system, helping to serve load and maintain overall system reliability. AES New Creek also indicated that the Project would add generation from a renewable resource. AES New Creek Ex. 1, p. 2-1.

22. The annual net capacity factor for the Project would be in the range of 28 to 35 percent. Based on the annual net capacity factor and, depending on the ultimate turbine selection, the Project is expected to generate between 242,800 and 490,500 MWh per year for the life of the Project. AES New Creek Ex. 1, pp. 3-1 - 3-2.

~~ Public Service Commission of West Virginia Charleston 34 23. The 2008 PJM Load Forecast Report predicted both short-term and long-term load growth in the PJM service area, with summer peak demand levels expected to increase by 1.4 percent annually over the next fifteen years. The PJM summer peak is predicted to reach 160,107 MW in 2018 and 170,367 MW in 2023. The PJM winter peak load is projected to increase 1.1 percent per year over the next fifteen years, with the winter peak load forecast toreach 127,250 MW in2017/2018 and 133,518 MW in2022/2023. AES New Creek Ex. 1, p. 2- 1.

24. As environmental regulations evolve and the cost of maintaining older plants increases, the region is expected to experience retirement of older fossil-fueled generating facilities. AES New Creek Ex. RAC-D, pp. 13-16.

25. A recent study by Emerging Energy Research indicated that the supply of renewable electricity is unlikely to meet cumulative Renewable Portfolio Standard requirements for the near term, creating a need for wind energy projects. AES New Creek EX. 1, p. 2-3.

Evidence Concerning Economic Impacts

26. AES New Creek submitted a study performed by TRC, an environmental and economic consulting firm retained by AES New Creek, of the economic impacts that the construction and operation of the Project would have on the West Virginia economy. AES New Creek Ex. 1, pp. 12-1 - 12-3. TRC used a newly-revised version of the JEDI model. The revised JEDI model was specifically designed to estimate the jobs and economic impact associated with constructing and operating wind power plants in the United States. AES New Creek Ex. 1, pp. 12-1 - 12-2; AES New Creek Ex. PDF-D, p. 3.

27. Based on the economic modeling, AES New Creek concluded that the Project would have a significant effect on the economy during construction. The revised JEDI model predicted that the Project could support up to 1,046 jobs during the construction period, including construction directly accounting for the creation of 123 jobs. The revised JEDI model also predicted that the Project would generate approximately $1 13 million in state and local economic activity during the construction period. AES New Creek Ex. PDF-D, pp. 5-8.

28. The Trades Council presented a study based on the IMPLAN model, including evidence as to the impact of the Project for the predicted economic impacts of the Project during construction. The Trades Council study suggested that a Project costing approximately $307.9 million and requiring approximately 109 craft workers would generate an additional $45.7 million in sales and, all told, would create 265 additional jobs in West Virginia. Trades Council Ex. 2, Ex. 1. New wages for the construction and other new jobs would total $13.4 million; profits for the self-employed would be $1 .O Million, and corporate profits would be $2.6 Million. Trades Council Ex. 2, Ex. 1.

F’ublic Service Commission of West Virginia Charleston 35 29. AES New Creek entered into a Memorandum Agreement with the North Central West Virginia State Building and Construction Trades, AFL-CIO and the West Virginia State Building Trades Council, AFL-CIO for the construction ofthe Project. Trades Council Ex. 1, p. 2.

30. Trades Council witness Darwin Snyder indicated that the size of the Project and the amount of construction employment will have a positive impact on the local economy and local employment. Trades Council Ex. 1, p. 3.

3 1. AES New Creek submitted estimates that during operation the Project would employ approximately ten individuals and that the Project could generate approximately $5.24 million annually for the local economy, including the purchase of materials and services, tax revenue, and additional disposable income anticipated to be spent in the area. AES New Creek Ex. 1, p. 12-3.

32. Based on the above, the construction and operation of the Project will have substantial and positive economic impacts in West Virginia and, more specifically, the construction of the Project will result in a substantial positive impact on the local economy and local employment.

Evidence Concerning Viewshed

33, In its Application, AES New Creek provided a visibility analysis containing viewshed maps, photosimulations, and a line-of-sight analysis. AES New Creek Ex. 1, Appendix J; see also AES New Creek Ex. 2 (Figures 2 and 3 of Appendix J without shading).

34. The AES New Creek viewshed analysis consisted ofphotographs representing worst case views because they reflect “leaf off’ conditions, the visibility was analyzed at the maximum blade tip height for the GE and Clipper turbines, and any turbine was considered to be visible if only a two-foot section of the turbine blade could be seen at a distance of three miles. AES New Creek Ex. JB-D, p. 13.

35. Visual impacts within one mile are expected to be minimal because of the heavily forested and steep terrain immediately surrounding the site. AES New Creek Ex. 1, App. J, p. 3-2.

36. The most predominant concentration of views within a five-mile radius of the Project occurs within 2.6 miles ofthe ridge line, and in particular those views generally occur along Knobly Road and Route 93, two thoroughfares located on the east and west of the Project area, respectively. AES New Creek Ex. 1, App. J, p. 3-2.

37. Beyond five miles, the other concentrated areas with potential views are located predominantly six miles to the east of the Project near Lahmansville and to the southeast along Patterson Creek Road between Lahmansville and Burlington. There are also

Public Service Commission of West Virginia Charleston 36 views along Route 42 south of Maysville and along Jordan Run Road. Id. AES New Creek concluded that, generally speaking, beyond ten and up to twenty miles from the Project, visibility will generally be limited to small areas of open land.

3 8. The land areas within the viewshed that are impacted by the Clipper and both GE turbines are similar, with no new major changes or locations that are impacted by one turbine model or another. Id.; AES New Creek Ex. JDB-SD, p. 2-3. Additionally, the viewshed impact for the 2.5 MW GE Turbine, which AES New Creek considered after its application was filed, is similar to the 2.5 MW Clipper turbine. AES New Creek Exs. RC-SD, p. 4 and JB-SD, pp. 5-6.

39. The Jennings Randolph Lake, the southern tract of the Allegheny Wildlife Management Area, the Greenland Gap preserve, and a portion of the Stony River Reservoir lie within a ten-mile radius of the Project. All other managed lands lie beyond ten miles from the nearest turbine. Project views are not expected at Jennings Randolph Lake or the Stony Creek Reservoir. There are some areas of the Allegheny Wildlife Management Area, including a fire tower on Pinnacle Knob, where there will be views of the Project. There may be views of the Project from the southern side of the Greenland Gap Preserve. AES New Creek Ex. 1 App. J, p. 3-3.

40. AES New Creek identified thirteen managed lands that lie between ten and twenty miles of the nearest proposed turbine location, including the Canaan National Wildlife Refuge, Fairfax Stone State Park, Blackwater Falls State Park, Dolly Sods Wilderness Area, portions of the Spruce Knob-Seneca Rocks National Recreational Area, and the Monongahela National Forest. Based on the viewshed analysis, these areas outside the ten- mile radius will likely have minimal views of the Project because of distance, intervening topography, vegetation, and atmospheric haze. AES New Creek also indicated, however, that there are some small scattered areas located in open, high elevation areas in some of the parks that may have visibility of the Project, including sections of the Canaan Valley Wildlife Refuge, Dolly Sods Wilderness Area, Spruce Knob-Seneca Rocks National Recreational Area, and the Monongahela National Forest. AES New Creek also concluded that it was very unlikely that there will be views of the Project from the Canaan Valley State Park, Fairfax Stone State Park, and the Blackwater Falls State Park. AES New Creek Ex. 1, App. J, p. 3-3.

4 1. In addition to the photosimulations provided with the Application, AES New Creek provided a photosimulation from Bear Rocks in the rebuttal testimony of Mr. Colman. Bear Rocks is located to the south of the Project and is adjacent to the northernmost portion of the Dolly Sods Wilderness Area. Typical views of the Project from Bear Rocks range from a distance of approximately twelve miles from the nearest turbine and nineteen miles from the furthest turbine. AES New Creek Ex. RAC-R, p. 4. Additionally, from Bear Rocks, the NedPower wind energy generating facility can be seen. Mr. Perdue stated that the turbines ofthe NedPower project are a significant part of the Bear Rocks scenic view and are more readily seen than the anticipated view of the Project. Staff Ex. WMP-D, p. 7.

Public Service Commission of West Virginia Charleston 37 42. The Commission conducted a view of the Project site and surrounding area in May 2009. The Commission viewed sites that were jointly selected by AES New Creek and the Alliance. Both AES New Creek and the Alliance submitted descriptions of each point site selected. The Commission visited approximately eight sites in the Project area.

43. Some of the towers must be lit for airline safety. AES New Creek will use lighting as required by the Federal Aviation Administration (“FAA”) and any applicable fire or safety code, regulation, or accepted good utility practice, but otherwise will limit lighting for the Project.

Evidence Concerning Noise Impacts

A. Ambient Noise Monitoring Program

44. From April 1 to April 11,2008, TRC conducted an ambient noise monitoring program at four locations near the Project site. From October 1 through October 11,2008, TRC conducted an ambient noise monitoring program from a fifth location near the Project site. AES New Creek Ex. AA-D, pp. 4-7.

45. The noise monitoring locations were selected by evaluating topographic maps, aerial photography, and field investigations to identifj noise-sensitive locations, with the actual selections made in residential areas to the extent feasible. Four of the locations were located in residential areas. These locations included residential properties to the north, southwest, northeast, and northwest of the Project site, all designed to collect sound data representative of ambient conditions of residences in each of those areas near the Project. The fifth location was located near the Greenland Lodge, located to the southeast of the Project. AES New Creek Ex. AA-D, pp. 8-9.

46. Ambient noise levels varied widely depending on the time of day, wind speeds and location. The existing day-night average noise levels were from 30 to 60 dBA, with the most frequent range being 45 to 49 dBA. The next most frequent range was 40 to 44 dBA. New Creek Ex. AA-D, p. 9-10.

47. AES New Creek used a wind screen and followed the applicable ANSI standards when conducting the ambient noise study. AES New Creek, Ex. 1, App. Q, p. 2-2.

48. TRC used Larson-Davis Laboratories Model 820 Precision Integrating Sound Level Meters to measure ambient sound. These meters met the requirements of ANSI Standard S 1.4- 1983 for Type 1 precision meters. The meters are calibrated and certified to the National Institute of Standards and Technology standards annually by a certified laboratory and are calibrated before and after each noise monitoring study. AES New Creek, EX. 1, App. Q, p. 2-2.

mtblic Service Commission of West Virginia Charleston 38 49. The sound level meters recorded amajority of ambient levels at the Project area within a range of 45 to 49 dBA, which is typical for rural settings and consistent with the ANSI standards and a 1974 EPA publication which states that typical rural ambient sound is about 45 dBA. New Creek Ex. AA-D, p. 9-10,

B. Predictive Noise Study

50. AES New Creek also had TRC develop a noise modeling study for the construction and operation of the Project. TRC used the commercially available CadnaA model to evaluate Project operational and construction sound levels. CadnaA is a sophisticated model used extensively by acoustical consulting firms and regulatory agencies for wind power projects. CadnaA was used in the AES Laurel Mountain and Beech Ridge wind power proceedings before this Commission. CadnaA is able to include the effect of spreading losses, ground and atmospheric effects, shielding from terrain, and reflections from surfaces in its calculations. AES New Creek, Ex. 1, App. Q, p. 4-2.

5 1. TRC conducted noise modeling studies of both construction and operational sound levels. AES New Creek Ex. 1, App. Q; AES New Creek Ex. AA-D.

52. TRC built several assumptions into its operational sound study that resulted in a more conservative calculation, i.e., higher sound levels: (1) that the ground cover would be completely acoustically reflective instead of highly absorptive; (2) standard atmospheric conditions that are favorable to sound propagation; (3) all turbines within a five-kilometer radius would be operating at the same time; (4) that there was not extensive tree cover (although tree cover acts to further reduce noise); (5) a range of wind speeds that would result in the minimum to the maximum turbine noise levels; and (6) all receptor locations were downwind of all turbines at all times (a physical impossibility). AES New Creek Ex. AA-D, pp. 6-7.

53. TRC obtained the maximum sound levels from the manufacturers of the GE and Clipper turbines and used these maximum sound levels in the operational model. AES New Creek Ex. 1, App. Q, p. 4-2; AES New Creek Ex. AA-SD, p. 2.

C. Anticipated Project Noise

54. Two ambient sounds that are the same are not directly cumulative, but will result in a three decibel increase in noise. For example, if the ambient noise level is 40 dBA and the Project operational noise level is 40 dBA, the total noise level would be 43 dBA. AES New Creek Ex. AA-D, p. 4. Increases of 3 dBA or less are generally considered to be imperceptible changes in noise. AES New Creek Ex. 1, App. Q, p. 4-1.

55. The maximum operational noise level for the most affected residence, a part-time residence located approximately 1,300 feet from the nearest turbine, is 56.9 dBA DNL for the Clipper turbine at full load, 53.9 dBA DNL for the 2.5 MW GE turbine at full

Public Service Commission of West Virginia Charleston 39 load, and 52.1 dBA DNL for the 1.5 MW GE turbine at full load. This landowner, a part-time residence, has entered into an agreement with AES New Creek relating to the Project. AES New Creek Ex. AA-D, pp. 10-11; AES New Creek Ex. AA-SD, pp. 2-3.

56. Beyond the part-time residence located 1,300 feet from the Project, the most affected residence is located in excess of 3,500 feet from the nearest proposed turbine. The anticipated operational noise for that residence is 53.3 dBA DNL for the Clipper at full load, 5 1.3 dBA DNL for the 2.5 MW GE turbine at full load, and 50.3 dBA DNL for the 1.5 MW GE turbine at full load. AES New Creek Ex. AA-D, pp. 10-1 1 ; AES New Creek Ex. AA-SD, pp. 2-3.

57. To both protect public health and welfare and provide a safety margin, the EPA recommends an outdoor noise level of no higher than 55 dBA DNL for any residential areas, farms or areas where people spend time outdoors. AES New Creek Ex. AA-D, pp. 15.

58. Beyond the part-time residence located approximately 1,300 feet from the nearest turbine, the Project’s maximum calculated operational noise level - 53.3 dBA DNL - is below the EPA protective criterion of 55 dBA. AES New Creek Ex. AA-D, pp. 15. Many of the residences will experience maximum Project sound levels below 50 dBA DNL, significantly below the EPA protective criterion of 55 dBA. AES New Creek Ex. AA-D, pp. 12-13.

59. Technological adva.nces have been made in sound control for wind turbines, and modern wind turbines do not generate a significant amount of operational noise as compared to older wind turbines. Older turbines had low frequency noise, aerodynamic noise and mechanical noise problems. AES New Creek Ex. AA-D, pp. 15-16.

60. The maximum predicted construction noise level at the nearest part-time residence is 54.1 dBA. Beyond the nearest part-time residence, the maximum predicted noise level for any other residence during construction is 43.9 dBA, which is a relatively low noise level as compared to a typical suburban setting which generally has a noise level of 50 dBA. AES New Creek Ex. AA-D, p. 1 1.

Evidence Concerning Birds and Bats

6 1. Stantec Consulting performed the following bird and bat studies for the Project on behalf of New Creek:

(a) Spring, Summer, and Fall 2008 Bird and Bat Migration Survey Report;

(b) Fall 2007 Bird and Bat Migration Survey Report; and

Public Service Commission of West Virginia Charleston 40 (c) New Creek Mountain Bird and Bat Risk Assessment: A Weight-of- Evidence Approach to Assessing Risk to Birds and Bats at the Proposed New Creek Mountain Project, West Virginia.

AES New Creek Ex. TP-D, pp. 3-4; AES New Creek Ex. 1, App. 0.

62. Throughout the studies, Stantec communicated periodically with USFWS and WVDNR regarding survey progress and to confirm the sufficiency of the manner in which the surveys were conducted. AES New Creek Ex. TP-D, p. 4.

63. Radar surveys conducted on New Creek Mountain documented a large number of nocturnal migrants in the air space above the ridge line. Stantec concluded, however, that the results of the radar survey did not necessarily indicate a higher risk of collision mortality at New Creek than at other wind projects. Compared with typical radar surveys, the Project had an expanded radar view because of existing terrain. Expanded radar view is a significant factor affecting the detection of passage rates. Stantec expects patterns and levels of mortality of nocturnal migrants that would be similar to those documented at other operational wind projects in the region. AES New Creek Ex. TP-D, p. 11.

64. The level of raptor migration at the Project site is relatively low as compared to other regional sites that were simultaneously monitored. Although small numbers of eagles appear to migrate above the Project area during spring and fall, and the limited telemetry data suggest that individual golden eagles are present in the vicinity of New Creek during the winter, eagles are not known to nest within the Project area or vicinity, and eagle mortality has not been documented at any existing wind facility in the eastern United States. AES New Creek Ex. TP-D, pp. 14-15.

65, The breeding bird surveys documented a relatively low diversity of breeding birds within the Project area, with the most frequently detected species relatively common in the region, The Project area does not support large numbers of any rare bird species. AES New Creek Ex. TP-D, pp. 30-3 1.

66. Mist-netting surveys for the Project were conducted at twelve mist-net sites in the New Creek Mountain area between April 18,2008 and May 15,2008; between May 30, 2008 and July 5,2008; and between September 1,2008 and September 14,2008. AES New Creek Ex. TP-D, pp. 17-18.

67. USFWS Recovery Plan Guidelines require studies to be conducted between May 15 and August 15 when Indiana bats are in their summer breeding range, and part of AES New Creek’s studies were conducted then. USFWS recommended additional spring and fall mist-netting studies outside of the May 15-August 15 time period, and Stantec performed such additional studies. AES New Creek Ex. TP-D, pp. 17-18.

Public Service Commission of West Virginia Charleston 41 68. USFWS Recovery Plan Guidelines require one net site for every kilometer of habitat. Upon consulting with USFWS, AES New Creek distributed twelve mist-net sites to sample all habitats within the Project area to maximize the possibility of capturing Indiana bats. AES New Creek Ex. TIP-ID, pp. 17-18.

69. No Threatened and Endangered species were captured through the mist-netting surveys. AES New Creek Ex. TP-D, pp. 17-18.

70. Eastern small-footed myotis were detected during each of the three survey periods. Although rare throughout the State, eastern small-footed myotis appear to be common on New Creek Mountain. To better understand the behavior of the eastern small-footed myotis, Stantec conducted radio telemetry surveys to document roosting habits of this species on New Creek Mountain. AES New Creek Ex. TP-D, pp. 18- 19.

7 1. AES New Creek detected a number of eastern small-footed myotis roosts on the western slope of New Creek Mountain, in the cleared transmission line corridor to the south of the Project, and in vertical rock cliff faces within Greenland Gap. AES New Creek EX. TP-D, p. 19,27.

72. Following construction, eastern small-footed myotis are still expected to forage within the Project area. Additionally, these species are thought to primarily feed and fly below the tree canopy based on their small size and foraging habits. Accordingly, collision mortality for the eastern small-footed myotis is not expected to constitute as great a risk in comparison to migratory species. AES New Creek Ex. TP-D, p. 27.

73. The studies conducted by Stantec indicate that the potential to bats at New Creek Mountain will follow patterns similar to those documented at other facilities in the eastern United States. AES New Creek Ex. TP-D, pp. 25-26.

74. Stantec conducted desktop and field surveys to document potential bat hibernacula within five miles of the Project area and obtained the locations of known hibernacula within thirty miles of the Project from the WVDNR. AES New Creek Ex. TP-D, p. 21-22.

75. The nearest hibernacula known to contain Virginia big-eared bats is nine miles southwest of New Creek Mountain and the nearest hibernacula known to contain the Indiana bat is located approximately 18.5 miles south of New Creek Mountain. Although these bats are capable of flying long distances, it does not necessarily mean that Threatened and Endangered species are likely to be present in the Project area. AES New Creek Ex. TP-D, pp. 21-22.

76. There is no evidence that a wind power project has resulted in the death of a Threatened and Endangered bat in the United States. See evidentiary record generally and AES New Creek Ex. TP-D, pp. 26-27 (stating that no fatalities of Threatened and

Public Service Commission of West Virginia Charleston 42 Endangered bat species have been documented during the post construction monitoring surveys at existing wind sites, including the Mountaineer facility, which is located approximately twenty-one miles west of New Creek Mountain.)

Evidence Concerning Water Resources, Wetlands, and Hydrology

77. For the hydrology study, TRC surveyed USGS maps, conducted field observations, and reviewed the USDA NRCS (formerly the Soil Conservation Service) soil map units for the Project area. AES New Creek. Ex. 1, pp. 13-4.

78. TRC wetland delineation crews surveyed the proposed Project area using the Federal Routine Determination Method presented in the USACE Wetlands Delineation Manual (USACE 1987). Specifically, wetland scientists utilized a multi-phased approach consisting of a review of existing USFWS National Wetlands Inventory (“NWI”) Geological Information System (“GIS”) Datalayers and Natural Resource Conservation Service Soil Surveys, followed by an on-site determination of the wetland boundary based on technical criteria established for hydric soils, hydrophytic vegetation, and hydrology. AES New Creek EX. 1,p. 13-4.

79. One wetland and potential jurisdictional watercourse was identified within the Project Boundary. The forested wetland occurs on the lower western slope of New Creek Mountain. The Project will not impact this wetland. AES New Creek Ex. 1, pp. 13-4 - 13-5; AES New Creek Ex. SH-R, pp. 1-2.

Evidence Concerning Cultural Resources

80. There are no known archaeological sites within five miles of the Project site that are either listed or eligible for listing on the NRHP. AES New Creek Ex. RDW-D, p. 5-6.

81. There are no known architectural sites located within five miles of the viewshed of the Project that are listed on the NRHP. There are two resources that were identified as potentially eligible for listing in the NRHP: the Medley Historic District in Grant County, approximately 4.9 miles from the Project, and the Claysville United Methodist Church, located approximately 3.8 miles away from the Project in Mineral County. The Project will not be visible from the majority of the resources in the Medley Historic District. Although the Project will be visible from a small corner of the church property, it is not anticipated that the Project will be visible from the Claysville United Methodist Church itself. AES New Creek Ex. GBH-D, p. 5-8.

IV. CONCLUSIONS OF LAW

1. This proceeding is governed by W.Va. Code §24-2-llc(c), which the Commission has applied in its review of other siting certificate applications. In determining

Public Service Commission of West Virginia Charleston 43 whether to issue a siting certificate, the statute requires that the Commission apply a two-part balancing test. As Part One of the balancing test, the Commission has a duty to appraise and balance the (1) “interests of the public,” (2) “general interests of the state and local economy,” End (3) “interests of the applicant.” W.Va. Code $24-1-22c (Part One).

In applying Part One, the Commission appraises and balances:

an applicant’s interest to construct an electric wholesale generating project; the State’s and region’s need for new electrical generating plants; and the economic gain to the State and the local economy, against:

community residents’ interest in living separate and apart from such project; a community’s interest that a project’s negative impacts be as minimally disruptive to existing property users as is reasonably possible; and the social and environmental impacts of the proposed project on the local vicinity, the surrounding region, and the State.

Liberty Gap Wind Force, LLC, Case No. 05- 1740-E-CS, June 22,2007 Commissioner Order at 39-40. With respect to prongs (i), (ii), and (iii) of Part One of the balancing test, the Commission “considers issues such as a Project’s impacts on existing cultural features of a community, viewshed, noise, non-listed, and endangered bats.” Id.

3. If the Commission determines under Part One that, taken as a whole, positive impacts relating to the various interests outweigh the negative impacts on the various interests, then the Commission must determine whether “the terms and conditions of any public funding or agreement relating to the abatement of property taxes do not offend the public interest, and the construction of the facility . . . will result in a substantial positive impact on the local economy and local employment.’’ W.Va. Code $42-2- 1lc(c) (Part Two).

4. The Project will provide wholesale electric service and there will be no direct financial impact to West Virginia retail ratepayers.

5. AES New Creek filed a complete Application that satisfied the requirements of the Siting Rules of the Commission.

6. AES New Creek has demonstrated a sufficient interest in constructing the Project by retaining various technical experts and developing detailed information in support of its Application; expending substantial time and economic resources to apply for a siting certificate, to pursue various other required permits and to obtain the real estate interests necessary to construct and operate the Project; preparing to make a significant investment to

Public Service Commission of West Virginia Charleston 44 construct and operate the Project in West Virginia; and committing to coordinate its activities with the Commission and other state and federal agencies.

7. The Energy Policy Act sf 2005, P.L. 109-58, among other things, amended certain sections of the United States Code to encourage the use and development of renewable energy resources. See Title 11, P.L. 109-58.

8. In the Energy Portfolio Act, the West Virginia Legislature declared that “[Tlhe development of a robust and diverse portfolio of electric-generating capacity is needed for West Virginia to continue its success in attracting new businesses and jobs. This portfolio must include the use of alternative and renewable energy resources at new and existing facilities.” W.Va. Code §24-2F-2(4).

9. It is not in the public interest for this Commission to isolate West Virginia from the region. The power grid is interconnected, and to safeguard the availability of productive, well-maintained resources to our State’s residents, West Virginia must participate in the interconnected electric system.

10. AES New Creek has demonstrated sufficient need for this Project because of the following factors: it is in the public interest to develop diversified sources of fuel to generate electricity, including renewables such as wind; additional generation capacity is needed to meet PJM’s projected load requirement; it is in the public interest for West Virginia to participate in the interconnected electric system; and the Project will power thousands of homes at its lowest level of productivity, and its output is well-suited to deliver electricity in the winter, when heating demand peaks, and may assist in meeting the peak summertime demands.

11. It is reasonable to conclude that there will be a significant economic gain to both the state and local economy and that construction of the facility will result in a substantial positive impact on the local economy and local employment. AES New Creek provided projected economic output using the JEDI model, as revised in December 2008. The Trades Council used the IMPLAN model. Both models predicted significant economic gain, and predicted the lowest estimated output of the Project would be to generate up to $45.7 million dollars in the state and local economic activity, some 109 local construction jobs, 156 jobs in related services and several permanent jobs thereafter, and significant tax revenues for local governance and public education.

12. Although the numerical level of opposition may be one of a number of factors for consideration in the “balancing” efforts the Commission must perform, the “community of interest in living separate and apart from the Project” means more to the Commission than which side “gets out the vote.” The Commission is more concerned with the “intrusive” nature of the facility on the everyday life in and around the communities rather than the numerical (and sometimes illusory) tally of those “for” and “against the Project.”

Public Service Commission of West Virginia Charleston 45 13. Based on all of the evidence and after spending an entire day touring New Creek Mountain, the surrounding communities and a portion of the property that is the site of the Project, the Commission is of the opinion that the Project is largely isolated from the community and limited to the private property near the top of New Creek Mountain.

14. The viewshed of a wind turbine project is the most subjective and often most disputed issue in a siting certificate application. There is no “bright line” test for viewshed. In this situation, while individual turbine units will be visible from various locations (as demonstrated from the View and the photo simulation evidence presented), the Commission concludes that the impact of the presence of the Project and view of the Project or its turbines will be minimally disruptive to the community.

15. Noise, like view, is another elusive and to some extent subjective factor in the deliberative process of the Commission. Numerous factors affect the noise levels from wind turbine projects, including the type of turbine, weather, ground cover, distance, ambient noise, leaf and foliage cover, elevation, wind direction, and the state of technology as applied to wind turbines and the detection of sound from wind turbine projects.

16. In conducting the ambient noise study, AES New Creek effectively addressed any issue of contamination that may have occurred from wind noise artifact by using an appropriate wind screen and following the applicable ANSI standards. The sound level meters used by AES New Creek are appropriate for rural settings, such as the Project area.

17. CadnaA is a sophisticated model used extensively by acoustical consulting firms and regulatory agencies, including this Commission, for wind power projects.

18. The AES New Creek noise study complied with Commission requirements, accurately portrayed ambient noise levels that are typical for a rural community and employed a variety of conservative assumptions to allow the Commission to assess the “worst case” scenario for the Project’s noise impacts. Based upon the totality of the evidence presented to us, the Commission concludes that the Project will emit some noise, but the operational noise levels are expected to be similar to existing ambient noise levels and noise impacts are not expected to be objectionable because of the Project. The Commission also concludes that, to the extent that operational noise results in negative impacts, those negative impacts are expected to be as minimally disruptive to existing property uses as is reasonably possible.

19. Raptors appear to be at low risk of collision with the Project’s turbines.

20. While a small number of breeding birds will likely collide with turbines, population level impacts for any single species are not expected to result from the Project.

2 1. The potential impacts to bats are expected to generally follow patterns similar to those documented at other facilities in the eastern United States and will consist largely

Public Service Commission of West Virginia Charleston 46 of collision mortality during the spring and particularly the fall migration seasons, with bat mortality potentially higher on warm, calm nights when long distance migratory species are expected to be the most vulnerable to collision mortality.

22. Because AES New Creek consulted with USFWS, because USFWS reviewed AES New Creek’s study plans, and because AES New Creek conducted additional studies at USFWS’s request, the AES New Creek bird and bat surveys are reasonable and sufficient.

23. The evidence submitted by AES New Creek concerning Threatened and Endangered species is credible as the studies undertaken were complete, reasonable and conducted in consultation and cooperation with the USFWS and WVDNR. No Threatened and Endangered species were detected through the mist-netting surveys, and as confirmed by WVDNR, the Project area is not located in the immediate vicinity of hibernacula containing Threatened and Endangered bat species. There is no evidence that a wind power project has resulted in the death of a Threatened and Endangered bat in the United States. No Federally Threatened and Endangered species are expected to breed, reside in, or use the Project area as primary habitat or breeding area.

24. Other than General Construction and Operational Phase Certificate Issues condition number (6), which the Commission modified, as written on page 29 and adopted in Conclusions of Law No. 25, the conditions contained in the Joint Stipulation are reasonable and are adopted.

25. If the Studies undertaken by AES New Creek demonstrate that the Project causes significant levels of bat mortality and if adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective, then AES New Creek should be required to implement those adaptive management strategies. Therefore, General Construction and Operational Phase Certificate Issues condition number (6) will be modified to read as follows: AES New Creek is committed to environmental stewardship and to minimizing the Project’s impact on migratory bats. Consistent with this commitment, if the Studies demonstrate that the Project causes significant levels of bat mortality and that adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective, AES New Creek shall implement those strategies.

26. Taken as a whole, the positive impacts relating to the various interests outweigh the negative impacts on the various interests in this matter. See W.Va. Code 924-2- 1 l(c).

27. Because there is neither public funding nor property tax abatement with the Project, analysis under Part Two is not needed. Thus, the terms and conditions of any public funding or any agreement relating to the abatement of property taxes do not offend the public interest.

Public Service Commission of West Virginia Charleston 47 28. Based on the entire record and the analysis contained in this Order, the Commission concludes that AES New Creek should be issued a Siting Certificate for this Project.

V. ORDER

IT IS THEREFORE ORDERED that AES New Creek is granted a Siting Certificate, pursuant to W.Va. Code 824-2- 1 1c, for the Project summarized in this Order and more fully described in the Application, subject to these conditions:

Preconstruction Certificate Issues

Prior to commencing construction, AES New Creek must file a verified statement indicating that all pre-construction conditions and requirements of the certificate have been met.

AES New Creek must not dispose of excavated rock and/or any bedding material during or following construction of the facility by spreading the material on agricultural land.

AES New Creek must dispose of all contaminated soil and construction debris in approved landfills in accordance with appropriate environmental regulations.

AES New Creek must design and install any needed fire protection systems in accordance with the National Fire Protection Association or other accepted standards.

AES New Creek must coordinate with appropriate fire safety and emergency personnel during the pre-construction stage of the Project to promote efficient and timely emergency preparedness and response.

The siting certificate shall become invalid if AES New Creek has not commenced a continuous course of construction within five years of the date the final certificate is granted without petitioning the Commission for approval to expand this time frame.

AES New Creek must file evidence that it has obtained any necessary environmental permits and/or certifications prior to commencing construction (including letters from United States Fish and Wildlife Service, West Virginia Division of Natural Resources, West Virginia Division of Culture and History and West Virginia State Historic Preservation Office) indicating that either AES New Creek does not need to take further action or outlining what action AES New Creek needs to take to be in compliance with that agency’s rule or

Public Service Commission of West Virginia Charleston 48 laws prior to any grading, soil excavation, and/or habitat removal or causing a similar action by others.

(8) AES New Creek must file a copy ofthe wetlands survey and delineation, final endangered species study with any required mitigation plans, and historical/archaeological significance study with any required mitigation plans prior to commencing construction. If AES New Creek is required to obtain approval and/or acceptance of the wetlands survey and delineation, it shall provide that approval and/or acceptance to the Commission prior to commencing construction.

(9) AES New Creek must comply with the Endangered Species Act (16 U.S.C. 5 FERC 153 1 et seq.), the Migratory Bird Treaty Act (16 U.S.C. 5 70 1 et seq.), and, if applicable, the National Environmental Policy Act of 1969 (42 U.S.C. 5 4321 et seq.) in both the construction and operation of the Project. If any authorized governmental agency or court with competentjurisdiction finds that AES New Creek is not complying with any one of the above three acts in either the construction or operation of the Project, then AES New Creek must noti@ the Commission in writing in this case of any such finding within ten days of any such finding being made. Furthermore, the Commission may seek any legal remedies it has jurisdiction to seek, including injunctive relief, to address any such findings.

(10) Prior to commencing construction, AES New Creek shall have obtained a report from a qualified independent third party regarding a decommissioning fund to cover the dismantling of the turbines and towers and land reclamation. The report of the qualified independent party will provide the analysis to set the fund amount. The report shall be updated thereafter as mutually agreed between AES New Creek and the Grant County Commission, but no less frequently than every five years thereafter. The fund amount will vary over time depending on changes in the estimated market or salvage value of the Project, the estimated cost of dismantling and removing the turbines, and the expected ongoing life of the Project. AES New Creek shall obtain the approval of the Grant County Commission of the evaluative expert and each of the periodic reports. The decommissioning fund shall not be part of AES New Creek’s assets. Within ninety days of any report that requires a contribution to the decommissioning find, AES New Creek shall make that contribution into an escrow account held by an agent pursuant to an escrow agreement between AES New Creek and the Grant County Commission, The methods for deposits to and disbursements from the fund shall be established within and governed by the escrow agreement. Furthermore, the escrow agreement must clearly reflect the role of the Grant County Commission and state that the obligations set forth in the escrow agreement apply to AES New Creek, its successors, and assigns. The escrow agreement and each report of

Public Service Commission of West Virginia Charleston 49 the qualified independent third party shall also be filed with the Commission as a closed entry in this matter. The Commission retains the right to hire its own evaluative expert to review any of the periodic reports and to take such further action within its jurisdiction as the Commission determines is necessary to protect the public interest.

General Construction and Operational Phase Certificate Issues

During construction, AES New Creek shall: a) Require contractors to use standard noise buffers on all construction equipment and trucks; b) Require contractors to use pile driving equipment that has the least noise impact; c) Perform construction activities mostly during the daylight hours; d) Avoid noise impacts at certain noise-sensitive locations, such as a church, during the weekend church activities and services and during other normally-scheduled church weekday activities; e) Limit any dynamiting to daylight hours and follow all State and Federal rules, regulations, and/or laws.

AES New Creek must coordinate with appropriate fire safety and emergency personnel during all other stages of the Project, including construction and operations, to promote efficient and timely emergency preparedness and response.

AES New Creek must file evidence of its EWG status from FERC prior to commencing construction.

If AES New Creek seeks to transfer its certificate, AES New Creek is required pursuant to Siting Rule 7.1 to notie the Commission in writing of the identity of the transferee and submit an affidavit from the transferee attesting to the transferee’s willingness to abide by the terms of a siting certificate, as issued. This condition applies anytime - not just in the operational stage.

AES New Creek will consult with representatives of Commission Staff, the U.S. Fish & Wildlife Service, and the West Virginia Division of Natural Resources (collectively, the “Consulting Team”) on the scope, development, and implementation of post-construction studies (“Studies”) to commence within a reasonable time, and in any event no later than one year following the commercial operation date of the Project:

a) The Studies will assess the Project’s impact on bat life, the potential for adaptive management strategies to mitigate those impacts, the expected cost of those strategies over a range of mitigation effectiveness levels,

Public Service Commission of West Virginia Charleston 50 and any other aspects of bat/wind turbine interactions identified and agreed to between AES New Creek and the Consulting Team; b) To the extent AES New Creek and the Consulting Team agree that the Project’s risk profile requires it, the Studies will also assess the impact of the Project on birds, including raptors; c) AES New Creek commits to conduct at least one year of Studies. To the extent that AES New Creek and the Consulting Team determine, based upon the results of the Studies undertaken during the first year of commercial operation, the Project would benefit from additional study and analysis, AES New Creek will conduct additional Studies during part or all of the next two years of commercial operation. Although it may choose to do so, AES New Creek will have no obligation to conduct any Studies beyond the third year of commercial operation; d) AES New Creek will file copies of each Study with the Commission and provide copies to each member of the Consulting Team within thirty days of its completion.

If the Studies demonstrate that the Project causes significant levels of bat mortality and that adaptive management strategies are proven to be effective and economically feasible from AES New Creek’s perspective, AES New Creek shall implement those strategies.

AES New Creek will minimize the visibility of the Project by only using Project lighting in the presence of the Project’s personnel and any other persons authorized to be in the area except that AES New Creek may use Project lighting as required by the Federal Aviation Administration and any applicable fire or safety code, regulation, or accepted good utility practice.

In the unlikely event that the blasting associated with construction activities negatively affects the groundwater aquifer on or around New Creek Mountain, AES New Creek will take immediate steps to resolve those negative effects.

AES New Creek must A) construct and maintain a fence around the O&M building and substation; B) lock all turbine doors unless access is needed for maintenance purposes; and C) for the life of the Project, install and maintain safety hazard signs at appropriate intervals around the Project’s perimeter, at the O&M building, substation, turbine towers, and any other location(s) where safety hazards are of concern.

AES New Creek must file copies of the remaining interconnection studies and final interconnection agreements prior to commencing operation.

Public Service Commission of West Virginia Charleston 51 (11) The siting certificate shall become invalid if AES New Creek has not completed construction by the tenth year without petitioning the Commission for approval to expand the time frame.

IT IS FURTHER ORDERED that the Memorandum Agreement dated January 14, 2009, between AES New Creek and the Trades Council is approved. The Commission anticipates that all representations and commitments made by the parties therein shall be kept by the parties. Approval of the Memorandum Agreement by the Commission does not mean the Commission is the proper forum to resolve any disputes that may arise from operating under the Agreement.

IT IS FURTHER ORDERED that upon entry hereof, this case shall be removed from the Commission’s open docket.

IT IS FURTHER ORDERED that the Executive Secretary of the Commission serve a copy of this Order upon all parties of record by United States First Class Mail and upon Commission Staff by hand delivery.

JML/klm 082 105ce.wpd

Public Service Commission of West Virginia Charleston 52