Latham's Clean Energy Law Report

California Court of Appeal Upholds CEQA Exemption for Wireless Communications Facility

By Latham & Watkins LLP on Posted in Environmental and approvals

By Daniel P. Brunton, Lucas I. Quass, and Stephanie L. Postal

CEQA Case Report: Understanding the Judicial Landscape for Development [i]

In a published opinion issued March 15, 2018, Don’t Cell Our Parks v. City of San Diego, the California Court of Appeal affirmed the trial court’s judgment and upheld the City of San Diego’s (the City’s) determination that a wireless communications facility (the Project) qualified for a categorical exemption for new small facilities under CEQA. In summary, the court determined:

  • Exhaustion of administrative remedies is not required if the agency did not hold a public hearing or otherwise provide an opportunity for members of the public to raise objections.
  • A standalone utility can qualify under the Class 3 exemption.
  • For the location exception to CEQA exemptions to apply, a location impacted by a project must be designated as an environmental resource of hazardous or critical concern by an agency.

The petitioner, a non-profit entity (Petitioner), had filed an unsuccessful petition for writ of mandate seeking to overturn the approval of development and use permits for the Project. Petitioner argued that the City’s determination that the Project was exempt from environmental review under the Class 3 exemption was erroneous because, as a standalone utility, the Project would not qualify for a Class 3 exemption. Petitioner also argued that, even if the Project fell within the Class 3 exemption, an environmental impact report (EIR) would be required because the unusual circumstances exception and location exception applied . The court rejected each of these arguments.

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CEQA Case Report: Understanding the Judicial Landscape for Development

By Latham & Watkins LLP on Posted in Environmental and approvals

By James Arnone, Lucinda Starrett, Marc Campopiano, and Christopher Garrett

California higher courts rule in favor of public agencies on small majority of environmental impact report cases.

Over the course of 2017, Latham lawyers reviewed all 46 California Environmental Quality Act (CEQA) cases, both published and unpublished, that came before California appellate courts. These cases covered a wide variety of CEQA documents and other topics. Below is a compilation of information from the review and a discussion of the patterns that emerged in these cases. Latham will continue to monitor CEQA cases in 2018, posting summaries to this blog.

The California Court of Appeal heard 43 CEQA cases, while the California Supreme Court heard the following three cases: Banning Ranch Conservancy v. City of Newport Beach, Friends of the Eel River v. North Coast Railroad Authority, and Cleveland National Forest Foundation v. San Diego Association of Governments. Exactly half of all CEQA cases decided in 2017 were published.

The chart on the right shows all 46 cases sorted by topic. The greatest number of cases (20 of the 46) focused on Environmental Impact Reports (EIRs). Attorneys’ Fees, Justiciability, and Other Procedures accounted for 12 cases. This category includes issues such as standing, preemption, statute of limitations, and res judicata. Six cases focused on negative declarations or mitigated negative declaration, while five cases focused on CEQA exemptions and exceptions to these exemptions. The remaining three cases involved supplemental review or certified regulatory programs.

In the below chart, cases are also sorted by topic but include additional information on whether the public agency prevailed in each kind of case. For purposes of this summary, if the public agency lost on any issue it is deemed to have not prevailed. Overall, public agencies prevailed in 30 of 46 cases, or 65%, but won only 55% of EIR cases. Public agencies saw their greatest level of success in exemption/exception, negative declaration, and supplemental review cases.

Read the full CEQA Case Report Year in Review 2017.

Big Changes Ahead for US Renewable Fuel Standard

By Latham & Watkins LLP on Posted in Energy regulatory

Recapping the first year of activity by the Trump administration on key issues.

By Joel C. Beauvais and Steven P. Croley

The Renewable Fuel Standard, or RFS, has been the focus of sustained policy discussion and resulting uncertainty during the first year of the Trump administration. Over the past year, the administration has floated, and then set aside, several proposals for substantial policy change. The administration has also granted RFS exemptions to a substantial number of small refineries, dampening demand for the tradable credits known as renewable identification numbers, or RINs — which represent production of renewable fuels and are used to demonstrate compliance with RFS requirements — and RIN prices have decreased from approximately US$1 in November 2017 to about US$0.34 today. The administration meanwhile is conducting high-level policy discussions and considering a number of potential other changes, including allowing sales of E15 (gasoline that is 10 to 15% ethanol by volume) during summer months, currently prohibited in most areas of the country.

In an Expert Analysis article published by Law360, Latham partners Joel Beauvais and Steven Croley examined these developments, with a focus on the legal framework and implications for the RFS program writ large. The article is available here.

California Court of Appeal Finds EIR’s Air Quality Analysis Deficient

By Latham & Watkins LLP on Posted in Environmental and approvals

By Christopher Garrett, James Erselius, and Samantha Seikkula

CEQA Case Report: Understanding the Judicial Landscape for Development[1]

In a partially published opinion[2] issued January 12, 2018, City of Long Beach v. City of Los Angeles, the California Court of Appeal affirmed in part and reversed in part the trial court’s judgment requiring the City of Los Angeles (Los Angeles) to set aside certifications of the environmental impact report (EIR) for a project whereby BNSF Railway Company (BNSF) would construct a 153-acre near-dock railyard four miles from the Ports of Long Beach and Los Angeles (Project).  In summary, the court determined:

  • An EIR’s analysis of air quality impacts is incomplete where it fails to provide information sufficient for the public and decision makers to understand how air quality will change with reference to time.
  • The Attorney General is exempt from CEQA’s issue exhaustion requirement.
  • A project description does not need to analyze the project’s environmental impacts.

Petitioner City of Long Beach (Petitioner) filed a petition for writ of mandate seeking to invalidate the City of Los Angeles’s (Los Angeles) EIR for the Project.  On appeal, Los Angeles challenged the trial court’s conclusions that: 1) the EIR was deficient because its project description and analysis of indirect impacts failed to discuss reasonably foreseeable indirect impacts from freeing capacity at the existing railyard near the Project site, the Hobart railyard; 2) the EIR’s analysis of noise, traffic, air quality, and greenhouse gas emissions was inadequate; and 3) the Attorney General, who intervened in the petition, was not precluded from asserting objections to the EIR that were not raised in the administrative proceedings.  The court agreed with Los Angeles that the project description, analysis of indirect impacts, and analysis of noise, traffic, and greenhouse gas emissions were adequate, but affirmed the trial court’s decision with respect to the inadequacy of the EIR’s air quality analysis and the Attorney General’s exemption from issue exhaustion rules.  Continue Reading

California Court of Appeal Approves Environmental Analysis for Oil Refinery Propane Recovery Project

By Latham & Watkins LLP on Posted in Environmental and approvals

By Winston P. Stromberg, Lucas I. Quass, and Derek Galey

Rodeo Citzens Ass’n v. County of Contra Costa, California Court of Appeal, First Appellate District, Division Three, Case No. A151184 (March 20, 2018).

CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In a published opinion issued March 20, 2018, Rodeo Citizens v. County of Contra Costa, the California Court of Appeal affirmed the trial court’s issuance of a writ of mandate requiring the County of Contra Costa to set aside the certification of the environmental impact report (EIR) and approval of the land use permit for the Propane Recovery Project (Project) at an oil refinery in Rodeo, California. In summary, the court determined:

  • A project description need not address potential changes in the use of a facility that are unrelated to the project under consideration.
  • CEQA does not require speculation regarding downstream greenhouse gas (GHG) emissions that cannot be reasonably feasibly quantified.

The petitioner, Rodeo Citizens Association (Petitioner) had filed a petition for writ of mandate seeking to invalidate the County’s certification of the final EIR and approval of the Project’s land use permit. The trial court found certain deficiencies in the air quality section of the Recirculated Final EIR (RFEIR) and issued a writ of mandate requiring reconsideration of that section, but rejected Petitioner’s remaining arguments. Despite the trial court’s issuance of the writ, Petitioner appealed the trial court’s decision rejecting Petitioner’s additional arguments that the project description and the analysis of GHG emissions and environmental hazards fail to comply with CEQA. The court found no error in the trial court’s conclusions and affirmed the peremptory writ as issued. Continue Reading

Dismissal of Low Carbon Fuel Standard (LCFS) Case Appealed Amidst Program Extension

By Latham & Watkins LLP on Posted in Environmental and approvals, Permitting

Appeal in POET II could complicate California Air Resources Board’s proposed LCFS amendments.

Joshua T. Bledsoe, Kimberly D. Farbota

In the case commonly referred to as POET II, petitioner POET, LLC, a biofuels manufacturer, challenged the Low Carbon Fuel Standard (LCFS) and Alternative Diesel Fuels (ADF) regulations which the California Air Resources Board (ARB) adopted in 2015. After briefing had been completed, defendant-respondent ARB filed a motion for judgement on the pleadings (MJOP) on November 21, 2017, in an attempt to have the case dismissed in light of earlier rulings in the related POET I case. On January 5, 2018 the Fresno County Superior Court issued a ruling granting the MJOP with respect to all claims and dismissing the entire case as moot. On March 6, 2018, POET noticed an appeal of the Superior Court’s decision to the California Court of Appeal for the Fifth Appellate District, the same Court of Appeal that issued the decisions in POET I. In that decision, the court sharply criticized the ARB for not acting in good faith and found that ARB failed to comply with the California Environmental Quality Act (CEQA).

Also on March 6, 2018, ARB released proposed amendments to the LCFS that would, inter alia, extend the Program to 2030. Included in the amendment package is an analysis of nitrogen oxide (NOx) emissions attributable to the LCFS, prepared in an attempt to fulfill the writ of mandate issued in POET I. On March 12, 2018, ARB released Regulatory Guidance Document 18-01, which updates prior guidance regarding ARB’s plans to meet the requirements of the writ of mandate issued in POET I. The appeal in POET II carries important implications for the Regulatory Guidance, the amendment package, and potentially for the future of the LCFS Program. Continue Reading

FERC Narrowly Approves ISO-NE Proposal Regarding State-Sponsored Generation Resources

By Latham & Watkins LLP on Posted in Energy storage

The split ruling may have broader implications for FERC’s stance toward state-sponsored resources.

By Michael J. Gergen, Tyler Brown, and Peter R. Viola

The Federal Energy Regulatory Commission (FERC) has approved ISO New England Inc.’s (ISO-NE’s) two-stage capacity market proposal, Competitive Auctions with Sponsored Policy Resources (CASPR), by a 3-2 vote, with Chairman Kevin McIntyre and Commissioners Cheryl LaFleur and Neil Chatterjee voting in support, and Commissioners Robert Powelson and Richard Glick voting against. FERC issued an order (CASPR Order) on March 9, 2018, accepting ISO-NE’s proposed tariff revisions largely unchanged. The bulk of the revisions took effect on March 9, 2018 and the remainder will take effect on June 1, 2018.

ISO-NE originally released CASPR as a set of proposed changes to its Transmission, Markets, and Services Tariff in April 2017. (Additional details can be found in this Latham blog post.) Following a series of stakeholder meetings, ISO-NE filed its proposed tariff revisions with FERC in January 2018 pursuant to section 205 of the Federal Power Act (FPA), arguing that the proposed revisions were just and reasonable and not unduly discriminatory. ISO-NE designed CASPR to balance competitive pricing in the organization’s three-year Forward Capacity Market (FCM) with the entry of state-sponsored renewable electric energy resources into the FCM. Continue Reading

BLM Begins Scoping Process to Consider Amendments to Desert Renewable Energy Conservation Plan

By Latham & Watkins LLP on Posted in Finance and project development, Permitting

DRECP under review in an effort to alleviate burdens on energy development.

By Marc T. Campopiano, Joshua T. Bledsoe, Jennifer K. Roy, and James Erselius

The Bureau of Land Management (BLM) recently issued a notice of intent to review the Desert Renewable Energy Conservation Plan (DRECP) for potential burdens on domestic energy production in California. The BLM issued the notice on February 2, 2018, in response to Executive Order (EO) 13783, “Promoting Energy Independence and Economic Growth.” EO 13783 was issued on March 28, 2017, and requires the heads of federal agencies to review all existing agency actions that “potentially burden the development or use of domestically produced energy resources.”

Finalized in 2016, the DRECP established a framework to streamline permitting for renewable energy projects on public lands in the California Mojave and Colorado/Sonoran desert region. The DRECP covers renewable energy development activities, including solar, wind, and geothermal projects, as well as transmission facilities that service renewable energy projects. As discussed in a previous post, concerns from local agencies, industry, and environmental groups caused state and federal agencies to narrow DRECP’s focus to public lands only.

The corresponding Land Use Plan Amendment (LUPA), issued when the DRECP was finalized, affects land use planning decisions for all of the 10.8 million acres of federal lands within the 22 million total acres covered under the DRECP. The LUPA set aside certain BLM-managed lands for conservation and recreation, and identified priority areas for renewable energy development. As detailed in a prior post, the approved LUPA designates 388,000 acres of Development Focus Areas, which are lands identified as having high-quality solar, wind, and geothermal energy potential and access to transmission. In addition to Development Focus Areas, the approved LUPA designates: 40,000 acres of Variance Process Lands for renewable energy development; approximately 6.5 million acres for conservation; approximately 3.6 million acres for recreation; and 419,000 acres of General Public Lands, which lack a specific land allocation or designation. A land use plan amendment is needed to develop renewable energy in General Public Lands areas. Continue Reading

New York Releases Offshore Wind Master Plan

By Latham & Watkins LLP on Posted in Finance and project development

Plan outlines next steps for procuring 2,400 MW by 2030, with a likely significant benefit for New York’s economic development.

By Tommy Beaudreau, Janice Schneider, Michael Gergen, and David Amerikaner

New York Governor Andrew Cuomo and the New York State Energy Research and Development Authority (NYSERDA) have released the New York State Offshore Wind Master Plan, an extensive document that highlights the state’s progress on offshore wind development while charting an ambitious path forward. The plan is designed to help meet the Governor’s previously announced goal of procuring 2,400 megawatts (MW) of offshore wind energy by 2030. The offshore wind goal is part of an overall strategy to generate at least 50% of New York’s electricity from renewables by 2030, as previously covered in this blog. Continue Reading

FERC Approves Landmark Rule on Electric Storage Resources

By Latham & Watkins LLP on Posted in Energy storage

Federal Energy Regulatory Commission’s much-anticipated new rule will enhance the participation of electric storage resources in the organized wholesale electricity markets.

By Michael Gergen, David E. Pettit, and Peter Viola

Nearly a year and a half after issuing its original proposal, the Federal Energy Regulatory Commission (FERC or Commission) has unanimously adopted its final rule—Order No. 841—on Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators (Storage Rule). The Storage Rule is the culmination of FERC’s proceedings following the notice of proposed rulemaking issued in November 2016 (Storage NOPR) whereby FERC originally proposed enhancing the participation of electric storage resources in the organized capacity, energy, and ancillary service auction markets operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).

The Storage Rule recognizes the improving capabilities and cost-competitiveness of electric storage resources (such as batteries, flywheels, pumped-hydro, etc.) and is designed to further pave the way for such resources to participate in the organized wholesale electricity markets alongside conventional energy sources. At the same time, the Commission determined that further information is needed about proposed reforms related to market participation of aggregations of distributed energy resources (DERs) in the RTO/ISO markets. The Commission therefore directed FERC staff to convene a technical conference on April 10-11, 2018 to gather additional information before deciding what action to take on those proposals.
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