Certificate Condition

Certificate Condition #165 of the Order Granting The Certificate of Environmental Compatibility and Public Need establishes the Lake Champlain Habitat Enhancement, Restoration, and Research/Habitat Improvement Project Trust Fund. It reads:

The Certificate Holders shall establish the Hudson River and Lake Champlain Habitat Enhancement, Restoration, and Research/Habitat Improvement Project Trust ("the Trust") solely for the purposes of protecting, restoring, and improving aquatic habitats and fisheries resources in the Hudson River Estuary, the Harlem and East Rivers, Lake Champlain, and their tributaries, in order to minimize, mitigate, study, and/or compensate for the short-term adverse aquatic impacts and potential long-term aquatic impacts and risks to these water bodies from Facility construction and operation and for the administration of the Trust to the extent expressly authorized in these Certificate Condition.

• Certificate Holders shall file an agreement providing for the establishment of the Trust (the "Trust Agreement") within sixty (60) days after issuance of this Certificate. The trustee selected by Certificate Holders to oversee the Trust (the "Trustee") shall be a bank accredited by and doing business in the State of New York. Both the Trust Agreement and the selection of the Trustee shall be subject to review and approval by the Commission (in consultation with NYSDEC) and, if required, the New York State Comptroller, and Attorney General.

• Within thirty (30) days of the Closing, the Certificate Holders shall endow the Trust with an interest-bearing account established at the Trustee bank, with the first payment of $2.5 million. Within one (1) month of the COD, the Certificate Holders shall make a second payment of $7.21 million (the "Second Payment") into the Trust. Certificate Holders shall thereafter make annual payments to the Trust, adjusted as described below in Table 2 attached hereto, of $2.15 million on or before each anniversary of the date of the Second Payment for a period of thirty-five (35) years. On the fifth (5th) anniversary of the Second Payment, Certificate Holders shall make a payment to the Trust of $5 million in addition to the annual payment. On each of the seventh (7th), ninth (9th), eleventh (11th), thirteenth (13th) and fifteenth (15th) anniversaries of the Second Payment, Certificate Holders shall make a payment to the Trust of $1 million in addition to the annual payment described above.

• Within thirty (30) days of the Closing, Certificate Holders shall prepare and file with the Commission for its approval a written agreement to govern the administration and operation of the Trust (the "Governance Agreement"). The Governance Agreement shall:
  • provide that the funding commitments of the Certificate Holders will be fixed in accordance with Table 2 attached hereto and the terms stated in this condition and that they will not be increased for any reason or decreased except as provided for in subsections (d)(vii) and (d)(ix) of this Certificate Condition;
  • establish a Governance Committee consisting of Certificate Holders; DPS Staff; NYSDEC; NYSDOS; CNY; APA; the New York State Council of Trout Unlimited; Riverkeeper, Inc.; and Scenic Hudson, Inc.;
  • authorize the Governance Committee to meet prior to COD to perform the preliminary work required to implement the Trust, including consideration of whether to use a third-party administrator (the "Administrator") to assist in the conduct of its business and for the administration of the Trust for tasks including but not limited to developing: (A) cash flow schedules for the Trust expenditures; (B) measures to track administrative costs; and (C) associated auditing and reporting tasks;
  • permit the Governance Committee to retain an Administrator, if desired by the Governance Committee, and to compensate the Administrator (if any) from monies available in the Trust;
  • provide that members of the Governance Committee other than Certificate Holders will not be obligated to pay into the Trust and that no member of the Governance Committee, including Certificate Holders, shall be obligated to directly fund or perform any of the responsibilities of the Trustee, including compensation of the Trustee or the Administrator;
  • obligate the Trust to indemnify and hold harmless all members of the Governance Committee, including Certificate Holders, from liability for any and all actions and/or inactions of the Trustee, the Administrator (if any), or any representative(s) of any of them;
  • provide that the studies, projects, and activities listed in Attachment 5 hereto totaling approximately $ 32.4 Million (the "Priority Projects") satisfy the requirements of this Certificate Condition and shall be implemented by the Administrator (or by the Trustee if no Administrator has been selected) pursuant to a schedule to be developed by the Governance Committee in order to meet the primary objectives of the Trust during its initial implementation phase. The Governance Committee, by a three-quarters vote, may determine, on the basis of changed circumstances, that a Priority Project should not be implemented; and
  • provide that the Governance Committee shall be empowered to approve all expenditures of the monies of the Trust, provided however that no more than 75% of the monies to be provided by Certificate Holders to the Trust in any year may be designated for such Priority Projects during the first fifteen (15) years of the Trust's existence or until the Priority Projects have been completed; and
  • require the Administrator (or the Trustee if no Administrator has been selected) to maintain a clear written record identifying any criteria and justification for the decisions of the Governance Committee and for all expenditures by the Trust itself.

• The Governance Agreement shall further require that:
• • the Governance Committee shall manage the Trust so that, over the life of the Facility, the monies of the Trust will be able to support additional studies, projects, or activities that may result from (A) the Priority Projects, (B) studies to be agreed to at a later time by the Governance Committee, or (C) information produced by the Governance Committee, consistent with the criteria set forth in this Condition 165 below;
  • the Governance Committee shall manage the Trust so that money remains available for future projects that were not identified in this Certificate and, from time to time, project ideas shall be solicited from the Governance Committee's members, other Federal and State Agencies or municipalities, individuals, and organizations located along the route of the Facility, provided these ideas are consistent with the purposes of the Trust and approved by the Governance Committee;
  • projects and activities approved by the Governance Committee for funding shall not replace natural resource management programs funded by the General Fund of the State of New York or NYSDEC Environmental Programs, meet an obligation of the State of New York or any other party to this proceeding, or replace funding for the operation and maintenance of any project not previously funded by the Trust. The Governance Committee may, however, authorize the Administrator (or the Trustee if no Administrator has been selected) to use the monies of the Trust to carry out additional or new activities that are part of or are consistent with applicable State and Federal resource management and land use plans;
  • studies, projects or activities to be financed by the Trust shall have a nexus to the Facility and shall include, but not be limited to: (A) habitat restoration, enhancement, or protection; (B) habitat research; (C) fish and wildlife species restoration, enhancement, or protection; (D) stewardship activities including additional or new activities, formally adopted by the Governance Committee, that are part of or are consistent with applicable State and Federal resource management and land use plans; (E) water quality improvement (excluding projects eligible for funding under the Clean Water State Revolving Fund); and (F) scientific or administrative support to ensure coordination of Trust projects with each other and externally funded research, restoration, and stewardship projects; delivery of final products; review of reports, data sets, and metadata; and placement of project results and data to ensure public access inappropriate digital and hard copy media;
  • prior to funding any studies, projects or activities, the Governance Committee must find that such studies, projects or activities have been proven: (A) to make a contribution to the long-term protection and enhancement of fish and wildlife species and habitats in the Hudson River Estuary, the Harlem and East Rivers, and/or Lake Champlain and their tributaries; (B) to have a strong scientific foundation; (C) to achieve identified environmental goals; (D) to be consistent with applicable State and Federal natural resource management plans; (E) to address impacts associated with the construction, operation, maintenance or security of the Facility; and, (F) to be feasible from an engineering perspective;
  • the Governance Committee shall give preference to projects that: (A) achieve multiple environmental goals; (B) involve multi-stakeholder collaboration; (C) feature matching funds; and/or, (D) are cost-effective;
  • the Administrator (or the Trustee if no Administrator has been selected) shall pay any administrative costs associated with the establishment and maintenance of the Trust from any accrued interest on monies of the Trust or, if adequate interest is not accrued, such administrative costs shall be borne by the Trust, provided however that the monies of the Trust shall not be used to compensate any party, including Certificate Holders, for participation in the Governance Committee or to reimburse any such party for any expenses incurred in such participation;
  • Certificate Holders' obligation to make the payments into the Trust set out above and in Table 2 attached hereto shall terminate upon receipt by the Administrator (or the Trustee if no Administrator has been selected) of documentation from the NYISO or DPS stating that the Facility has ceased commercial operation. Should the Facility resume operations, the Certificate Holders shall resume the payments to the Trust on January 1st of the following year;
  • if the Facility ceases permanent operation for any reason, payments owed to the Trust as of the date of the final termination and the balance of unused monies in the Trust, plus any accrued interest and minus any administrative cost, shall be retained in the Trust and administered by the Governance Committee until completely expended;
  • the Trustee, Administrator (if any) and the Governance Committee shall all be prohibited from directly or indirectly bonding or pledging any funds to be provided by the Certificate Holders at any future date; and
  • in the event that any department, agency, authority, office or other instrumentality or subdivision of the State of New York shall claim ownership or control of the Trust or any of the funds paid into the Trust by Certificate Holders or any interest thereon, the Trustee shall immediately return all monies held in the name of the Trust to Certificate Holders.