A proposal to build a power plant on the Musconetcong River has obtained an exemption from Highlands rules but faces a bigger hurdle in complying with state water quality regulations.
The state Department of Environmental Protection approved the Highlands exemption for the Phoenix Energy Center toin Holland Township.
At the same time, however, the DEP found the project is inconsistent with the Upper Delaware Water Quality Management Plan, a verdict that means the agency cannot issue any permits for the plant until the applicant applies and amends the areawide plan.
The applicant, Abatis Advisors, is seeking to build aon the site of a former paper mill on the Musconetcong, one of the few rivers in the state classified as a Category 1 (C1) stream, the designation given to the most pristine waterways.
The project is located in the Highlands Preservation Area, but the state agency ruled it qualified for an exemption under the Highlands regulations governing redevelopment of former sites where building already has occurred.
The approval surprised some environmentalists, who wanted the project rejected before it starts applying for additional permits.
“They should have just killed it,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “This gas power plant does not belong in the Highlands or anywhere else in New Jersey.’’
Tittel argued the rationale behind the Highlands exemption provision was to allow small developments that benefit the region without threatening the ecosystem. “The whole purpose of passing the Highlands Act was to prevent massive projects like this,’’ he said.
But Elliot Ruga, policy director of the New Jersey Highlands Coalition, argued the more significant action taken by the state was to rule the project inconsistent with the WQMP, a tool DEP uses to protect water quality in the state.
“I don’ think there’s a lot of traction for the project just from the exemption. It’s a very low bar to pass,’’ Ruga said. “They have so many other regulatory requirements they have to get, it is unlikely this will be approved under existing rules.’’
In determining the project is inconsistent with the WQMP, the DEP cited the project’s proposed wastewater flows of more than 2,000 gallons per day and proposed use of 5 million gallons of water daily.
Water quality issues are crucial in the Highlands, which provides drinking water to 6 million people in New Jersey. The Musconetcong River is widely regarded as the state’s finest trout stream, portions of which have been designated as a National Wild and Scenic River.
But Richard Radini, managing director of New York City-based Abatis Advisors, said he doesn’t see the department’s decisions as a setback to the project.
“It’s a normal procedure. We’re very early in the development,’’ Radini said, when asked about the project. “Call us back in five or six months.’’
Abatis Advisors is an investment firm specializing in projects in the power sector, including buying, selling and advising on their development. Its projects include a 700-megawatt underwater electricity cable under the Hudson River between New Jersey and New York, which it eventually sold, and a 400-megawatt coal plant it co-developed in Pennsylvania.
The project is the latest proposed in New Jersey that aims to exploit cheap natural-gas supplies being developed in neighboring Pennsylvania. Three new natural-gas plants have come on line in the state in the past few years, and another huge 1,200-megawatt power plant is proposed for North Bergen in the Hackensack Meadowlands.
Coincidentally, that project, the North Bergen Liberty Generating Station, won approval from the DEP earlier this month for freshwater wetlands, flood hazard and waterfront permits.