Latham's Clean Energy Law Report

CEQA Developments: How New Proposed Regulations and Streamlined Legislation Will Impact California Projects

Posted in Environmental and approvals, Finance and project development

Webcast addresses recent developments involving the California Environment Quality Act.

By Marc Campopiano, Chris Garrett, and Winston Stromberg

The Project Siting & Approvals Practice hosted a 60-minute webcast on February 21, “CEQA Developments: How New Proposed Regulations and Streamlined Legislation Will Impact California Projects.” Speakers provided an overview of the proposed updates to the California Environmental Quality Act (CEQA) Guidelines, the implications of new proposed legislation to streamline CEQA (including S.B. 827), and the impact of the California Air Resources Board’s Scoping Plan on CEQA.

View the webcast or download the presentation slides on-demand by registering here.

Proposed CEQA Guidelines Amendments Proceed Through Rulemaking Process

Posted in Energy regulatory

Proposed changes include shifting the methodology for studying projects’ potential traffic impacts and clarifying the terms for deferred mitigation measures.

By Marc Campopiano, Winston Stromberg, and Samantha Seikkula

The California Natural Resources Agency (the Agency) has given notice that it intends to revise many of the regulations implementing the California Environmental Quality Act (the CEQA Guidelines). If adopted, the proposed rulemaking package would represent the most substantial amendments to the CEQA Guidelines in 20 years. The most significant proposed change shifts the methodology for studying projects’ potential traffic impacts and mitigation measures under CEQA. Continue Reading

Massachusetts Unveils Three Offshore Wind Farm Proposals

Posted in Finance and project development

New England wind farms poised to lead the way in utilities converting from fossil fuel to wind generation.

By Tommy Beaudreau, Janice Schneider, and David Amerikaner

The race is on to build the first utility-scale offshore wind farm in the United States (US) on the federal Outer Continental Shelf. In December, three companies — Bay State Wind, Deepwater Wind, and Vineyard Wind — submitted bids in response to the Request for Proposal (RFP) issued by the Massachusetts Electric Distribution Companies (Distribution Companies), in coordination with the Massachusetts Department of Energy Resources, to enter into long-term contracts for offshore wind energy generation off of the coast of Massachusetts. The RFP was issued pursuant to Section 83C of Massachusetts’ Act to Promote Energy Diversity. Under the RFP, the Distribution Companies required developers to submit projects of at least 400 megawatts (MW) of offshore wind power generation, while also considering projects generating up to 800 MW. This initial solicitation is part of a staggered procurement plan, in accordance with Section 83C, to acquire approximately 1,600 MW of aggregate offshore wind nameplate capacity by June 30, 2027.

Each of the submitting wind farm ventures holds a federal lease from the Bureau of Ocean and Energy Management (BOEM) for areas in federal waters 15 to 25 miles offshore. All three bids propose wind farms south of the island of Martha’s Vineyard that would provide 400 MW of power, though some bids include alternate proposals on smaller or larger scales. Each bid also includes storage and transmission proposals, as the RFP required. Continue Reading

Wholesale Capacity Market in New England Aims to Better Accommodate State-Sponsored Generation Resources

Posted in Energy regulatory

The regional transmission organization’s proposal seeks to reconcile the increasing deployment of state-sponsored subsidized clean energy resources with competitive forward auctions.

By Michael Gergen and Tyler Brown

Proposed New Auction Process in New England

energy pylonThe ISO New England Inc. (ISO-NE), the regional transmission organization serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont has filed proposed changes to its Transmission, Markets and Services Tariff with the Federal Energy Regulatory Commission (FERC).  The proposal would create a two-stage capacity auction designed to balance competitive pricing in its three-year Forward Capacity Market (FCM) with the entry of state-sponsored renewable electric energy resources into the FCM. ISO-NE’s proposal, known as Competitive Auctions with Sponsored Policy Resources (CASPR), emerged from the New England Power Pool (NEPOOL)’s Integrating Markets and Public Policy (IMAPP) initiative. IMAPP sought to reconcile states’ efforts to deploy new generation with existing generators’ concerns that resources receiving out-of-market revenues will suppress capacity prices. ISO-NE filed the CASPR proposal on January 8, 2018 even though it fell short of the support it needed to win endorsement by a vote of the ISO’s Participants Committee on December 8, 2017. Stakeholders have until January 29, 2018 to submit comments.

ISO-NE’s existing FCM rules subject new capacity resources to a Minimum Offer Price Rule (MOPR), which requires that subsidized generation resources bid into the FCM’s Forward Capacity Auction (FCA) at their unsubsidized cost. The FCM contains a Renewable Technology Resource (RTR) exemption to the MOPR, which allows for up to 200 MW per year of certain renewable resources to bid into the FCA at their subsidized (i.e., below market) cost. New England state regulators have argued that the MOPR can cause electricity consumers to “pay twice”: once for the cost of capacity that clears in the FCA, and a second time for additional capacity from subsidized resources that did not clear in the FCA (because those subsidized resources were required to bid at their unsubsidized cost). Continue Reading

California Adopts Rules for Evaluating Multiple-Use Energy Storage Resources

Posted in Energy storage

By Michael Gergen, David Pettit and Christopher Randall

The CPUC’s market-shaping decision provides guidance regarding the “stacking” of multiple electricity system services.

A new decision from the Public Utilities Commission of the State of California (CPUC) has set the stage for improved economic viability for California’s energy storage industry. The January 17 decision — Decision 18-01-003 in Rulemaking 15-03-011 (the Decision) — establishes a set of rules to guide utilities on how to “promote the ability of storage resources to realize their full economic value when they are capable of providing multiple [or ‘stacked’] benefits and services to the electricity system.”

To advance this objective, the CPUC has adopted 11 stacking rules to govern the evaluation of multiple-use energy storage applications, as well as associated definitions of services and service “domains.” The agency also established a working group to develop certain issues further and directed the CPUC’s Energy Division to prepare a report in 2018 on the state of the energy storage industry. Continue Reading

Interior Department Excludes Incidental Take Liability Under the Migratory Bird Treaty Act

Posted in Environmental and approvals

By Janice Schneider, Sara Orr, Jennifer Roy and James Erselius

Reversing a long-standing federal legal position, the US Interior Department recently stated that the Migratory Bird Treaty Act (MBTA) does not impose liability for the incidental take of protected birds. The 41-page Solicitor’s Opinion (number M-37050) withdraws and replaces a prior Solicitor’s Opinion (number M-37041), issued during the Obama administration. The prior Solicitor’s Opinion had interpreted the MBTA to prohibit “incidental take,” and concluded that “the MBTA’s broad prohibition on taking and killing migratory birds by any means and in any manner includes incidental take and killing.” The new legal position means that the Trump administration will not consider the non-directed and unintentional death of birds by energy companies and other businesses in the course of their otherwise lawful activities to be a crime under the MBTA.

The MBTA, enacted in 1918, prohibits the take of over 1,000 species of birds, and the take of any migratory bird’s parts, nest, or eggs without a permit. The regulations define take as “to pursue, hunt, shoot, wound, kill, trap, capture, or collect” or to attempt any of these acts. Violations of the MBTA are criminal offenses, and courts have held that the MBTA imposes strict liability, regardless of intent. Courts have debated, however, whether the scope of strict liability under the MBTA extends to the incidental take of migratory birds resulting from otherwise lawful activities. As discussed in a previous post, the Fifth Circuit joined courts in the Eighth and Ninth Circuits in ruling that the MBTA does not prohibit incidental take. In contrast, other circuits, such as the Second and Tenth, have extended liability under the MBTA to incidental take in at least some instances. Continue Reading

California Air Resources Board Clarifies 2018 LCFS Targets and POET II Case Approaches Major Milestone

Posted in Environmental and approvals, Permitting

By Joshua Bledsoe and Kimberly Farbota

Recent guidance published by the California Air Resources Board (ARB) clarifies the treatment of diesel fuels under the Low Carbon Fuel Standard (LCFS) in light of the Court of Appeals’ May 30, 2017 decision in POET I. Meanwhile, in POET II, ARB recently filed a Motion for Judgment on the Pleadings (MJOP), in an attempt to have the lawsuit dismissed as moot before a hearing on the merits occurs. While the MJOP addresses all of the claims in POET II and various other filings have been made by the parties in connection with the motion (e.g., Requests for Judicial Notice, a Motion to Strike, etc.), this blog entry focuses only on the key aspects of the MJOP and POET’s opposition thereto.

New Guidance Regarding Implications of the POET I Decision

On November 22, 2017, the ARB posted regulatory guidance to clarify the scope of the writ of peremptory mandate issued by the Fresno County Superior Court on October 18, 2017 (the Modified Writ) to implement the May 30, 2017 POET I decision.

As we have discussed in previous posts, the POET I case arose from Petitioner POET, LLC’s challenges to the original LCFS regulation adopted by ARB in 2009. On April 10, 2017, the Court of Appeal ruled that ARB had failed to faithfully execute a writ of peremptory mandate requiring it to remedy violations of the California Environmental Quality Act (CEQA) that occurred during adoption of the original LCFS. In response to a petition for rehearing filed by ARB, the Court of Appeal reissued its opinion on May 30, 2017. Continue Reading

California Continues to Drive Toward Lower NOx Standards for Heavy-Duty Diesels

Posted in Energy regulatory

By Arthur Foerster and Jamie Friedland

On January 12, 2018, the California Air Resources Board (CARB) will conduct a public workshop regarding CARB staff’s potential amendments to California’s heavy-duty vehicle (HDV) emission warranty requirements. According to CARB staff, the workshop will focus on potential changes to Title 13, California Code of Regulations, Section 2036, and specifically, amendments to required emission warranty periods and manufacturer-scheduled maintenance. CARB staff will present the workshop as a webcast (available here).

Background

Under United States law, the federal Clean Air Act (CAA) generally preempts individual states from adopting their own emission standards. The Act, however, grants California the ability to seek authorization to set the state’s own more stringent standards. See 42 U.S.C. § 7543(b). Manufacturers generally prefer a single national standard and, as a practical matter, often follow CARB standards when they are stricter.

Under current CARB rules, the applicable warranty period for heavy-duty diesel vehicles and engines (i.e., class 4 through 8) is whichever of the following comes first: five years, 100,000 miles, or 3,000 operation hours. See 13 CCR § 2036(c)(4). CARB staff’s proposal would maintain the five-year limit, while eliminating hour limits and lengthening mileage limits. Specifically, the proposal would increase the mileage limits to the following:

  • 350,000 miles, for class 8 vehicles;
  • 150,000 miles for class 6 and 7 vehicles; and
  • 110,000 miles for class 4 and 5 vehicles.

Continue Reading

DOI Identifies Burdens to Energy Development on US Tribal Land

Posted in Environmental and approvals, Finance and project development

By Janice M. Schneider, Tommy P. Beaudreau, Stacey L. VanBelleghem, and Nikki Buffa

Stakeholders interested in energy development on US tribal lands will welcome recent Department of Interior (DOI) efforts that identify a key burden to energy development on these lands — as well as the Bureau of Indian Affairs’ (BIA’s) plans to address it. DOI issued the Review of the Department of the Interior Actions that Potentially Burden Domestic Energy report (DOI Burden Report) in response to Executive Order (EO) 13783, Promoting Energy Independence and Economic Growth, which required agencies to evaluate and report on all existing agency actions that “potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.” (For more on the DOI Burden Report, please see this November 2017 Latham & Watkins Client Alert.)

The BIA, a federal agency within DOI, is charged with managing trust assets of American Indians, Indian tribes, and Alaska Natives. As BIA noted in the DOI Burden Report, royalty income from energy production on tribal lands totaled US$534 million in 2016 and constitutes the largest source of revenue generated from tribal trust lands. BIA identified its existing regulations governing Tribal Energy Resource Agreements (TERAs) as a policy that potentially burdens domestic energy. Continue Reading

BOEM Renewable Energy Task Force Discusses Potential New Wind Energy Areas Offshore New York

Posted in Finance and project development

By Tommy Beaudreau, Janice Schneider, and David Amerikaner

The Bureau of Ocean Energy Management (BOEM) convened the Intergovernmental Renewable Energy Task Force for the New York Bight to discuss BOEM’s draft Call for Information and Nominations (Call) on December 4, 2017. The meeting, which was held via a webinar, marked an important step in the process to identify potential new wind energy areas (WEAs) in federal waters off of New York. BOEM plans to publish the Call in the Federal Register for formal public comment in late January or early February 2018 after considering inter-governmental input on the draft Call areas. With publication of the Call, BOEM will initiate the area identification process to delineate up to four potential new WEAs in the New York Bight, each with the estimated potential to generate at least 800 megawatts of electricity in support of the state’s renewable energy goals.

BOEM issued the draft Call, including the four new potential WEAs, in response to the New York State Research and Development Authority’s (NYSERDA) request to review proposed WEAs in the waters off New York and to expedite the permitting process for offshore wind development. More information, including maps of New York’s Area for Consideration, is available on NYSERDA’s website.

New York is prioritizing the development of renewable energy, and adopted a Clean Energy Standard (CES) in 2016. The CES mandates that 50% of New York’s electricity come from renewable sources by 2030, with a phase-in schedule beginning in 2017. Offshore wind energy stands to play a key role in meeting New York’s CES goals, which include a target of 2.4 gigawatts (GW) of offshore wind power. New York is currently preparing an offshore wind Master Plan that outlines information about project siting and environmental and use conflicts within a 16,740 square-mile study area. The State is expected to issue the Master Plan soon.

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