For the power sector, many factors point to the coming years as a time to build. States, municipalities, and the federal government have set ambitious goals to reduce carbon dioxide emissions from the electric sector. Both the Inflation Reduction Act and the Infrastructure Investment and Jobs Act have funding and tax credits that support building new generating facilities and updating aging infrastructure. Plus, there’s increasing electric demand from the electrification of buildings and transportation and the growth of energy-intensive industries, such as data centers.
But building or repurposing this infrastructure isn’t just about having the demand and the capital ready. Utilities and non-utility generators are faced with uncertainty — in costs, timelines, and rules — when it comes to siting and permitting for these projects.
“Without permitting reform, many goals in [the IIJA and IRA] cannot be reached because it’s too difficult, time-consuming, or costly to build,” said Amy Thomas, vice president of government relations at the American Public Power Association. “We need to build infrastructure faster, so we need to make some changes.”
That’s why permitting reform on energy infrastructure is one of the priority advocacy areas for APPA. Some of the specific hurdles that need to be addressed to build for the future responsibly include setting clear timelines, streamlining the federal review process, and getting clarity on regulatory statutes.
A Closed Loop
In Vermont, municipalities with small hydroelectric plants are struggling to attain renewed operating licenses from the Federal Energy Regulatory Commission.
“Most of those hydroelectric plants were built around 1900. Depending on the generation facility, FERC requires that the license be renewed every 30 to 40 years,” explained Ken Nolan, general manager of the Vermont Public Power Supply Authority, a joint action agency. Part of that process involves the state approving a Section 401 certification under the Clean Water Act. “FERC will tell you that you’re supposed to submit your first documents five years before your license expires. In my experience, five years is optimistic,” he added.
Part of what makes this such a lengthy process, said Nolan, is that there is not a set time frame for when other parties, such as environmental groups, can request additional impact studies or reviews. This can mean that such studies, which can take years, might have to be repeated, leading to further delays.
Among the list of priorities for permitting reform for energy infrastructure siting, APPA is working with members to recommend adjustments to 401 certification processes. APPA would like to see Congress encourage prompt action and decision-making among state agencies, consistent Section 401 permitting requirements from state to state, and a limit to the scope of such efforts to water-quality issues only.
Section 401 permits relate to how utilities obtain water-quality certifications to discharge water from generation facilities, explained Carolyn Slaughter, APPA’s director of environmental policy. “Making sure agencies adhere to a one-year clock will ensure that utilities have some certainty about whether a project is going to move forward,” she said. “Having that level of certainty helps utilities reduce costs because they know what the endpoint might be.”
Desmarie Waterhouse, senior vice president of advocacy and communications for APPA, explained why limiting the scope of Section 401 certification processes could help expedite energy infrastructure projects. Often, she said, utilities will be close to having a decision on the certification when someone raises a question about whether the facility as a whole will negatively impact water quality rather than if the “discharge only” would impact water quality. “The state agency then has to go back and start a different process,” she said, noting that this can make Section 401 certification an open-ended, ever-changing process in which a permit never gets approved.
“There’s already a statutory requirement on Section 401 certification timelines. It’s a one-year clock,” Slaughter said. “We’re asking Congress to hold federal agencies accountable to that statutory requirement. If you’ve come to the end of the year and you’ve had no interaction or communication from the state agency, then the permit just moves forward.”
Reducing Redundancies
Changes could also make it easier for utilities to navigate the National Environmental Policy Act. One idea is giving agencies more flexibility in establishing their categorical exclusions so that these could be tailored to specific project types and environments.
“Categorical exclusions are for projects that have minimal environmental impact, so they conceivably don’t have to go through a full-blown environmental impact assessment,” explained Waterhouse. “Every federal agency has its own categorical exclusions, and some of the rules are very rigid.”
Giving agencies more flexibility with categorical exclusions would help permit-seekers move more quickly “because they’re not having to jump through multiple hoops,” Slaughter said.
Another change APPA thinks would help speed up permitting is having agencies use existing studies of project impacts that were done by other federal, state, or local agencies. Right now, new studies are mandatory for environmental reviews.
Two of the utilities served by Nolan’s joint action agency in Vermont have tried to combine permitting efforts because they have dams located on the same river about 20 miles apart. “They’ve found themselves kind of wrapped around the axle in not being able to share studies and having the state come in and say, ‘We’re not happy with this study that was performed. We want the other utility to do something a little different,’” Nolan said.
Along with reusing studies, APPA has suggested that agencies should be required to review prior studies during the scoping process and determine whether those studies address the issues under review and how much information should be incorporated.
“These changes are important to public power entities because they are working with state and local agencies that are more familiar with a particular geographic area. They may already have done some type of analysis of impacts to the area,” Slaughter said. “Using all that existing information in developing an environmental assessment or environmental impact statement just saves time. You don’t have to go out and recreate analyses.”
Another recommendation is to reduce redundancies when multiple permitting agencies are reviewing a project. For example, if a project must satisfy requirements under the National Historic Preservation Act or the Endangered Species Act, then all relevant permitting agencies should consult on these efforts, increasing coordination and reducing redundancy, saving time and reducing permitting costs.
To facilitate coordination of permitting processes and information sharing, APPA is also hoping to see Congress create an interagency portal. “It would provide a clearinghouse where agencies could go look at what is being done across each other’s boundaries and allow APPA members to pull up information on their computers,” Slaughter said.
Thomas added that such a move would not only ease the administrative process, it would also add transparency on the project status and timeline.
No More Flip-Flops
Another area that would help: regulations that have more staying power.
“Utilities can be affected when changes in presidential administrations bring changes to existing regulations,” Waterhouse said. “It creates regulatory uncertainty for our members because the rules may change during the middle of a project. It makes long-term planning very difficult.”
Andy Kellen, vice president of power supply resources for WPPI Energy, a joint action agency serving 51 municipalities in Wisconsin, Iowa, and Michigan, can attest to that. “We had the Clean Power Plan during the Obama administration, the Affordable Clean Power rule under Trump, and now we have a new proposed rule regulating greenhouse gas emissions,” he said. It’s hard to meet a moving target, and it may be counterproductive, he added.
“We entered into several purchase power agreements for renewables in the 2006–2007 time frame,” he explained. Kellen said jumping in then — before meeting renewable portfolio standards was necessary — means WPPI Energy bought into renewables at a higher price point than it might have secured by waiting. He said the timing of this decision also made it more difficult for his organization to meet Clean Power Plan targets, because WPPI Energy had already lowered its emissions during the baseline year.
This kind of experience, Kellen said, can make organizations reluctant to move quickly. “You don’t want to incent people to hold off on renewables because they’re not sure what the regulations will be or what the effect of those regulations will be on their portfolio,” he noted.
“APPA is supportive of congressional efforts to provide regulatory certainty through the use of clear statutory text, expedited and coordinated reviews by federal agencies, and firm timelines for reviews,” Waterhouse said.
Clarity and certainty are key drivers behind all the permitting reform priorities that public power providers have.
Although some priorities on transmission are listed in APPA’s permitting reform document, APPA is targeting more comprehensive permitting reform. “We want to focus on environmental reforms, judicial reforms, putting a time frame on how long it takes to get a permit, and limiting the number of times something can be reviewed,” Thomas said. “We don’t think transmission-specific policy changes are necessary. To meet decarbonization goals, we need broader policy changes that will make it easier for all energy infrastructure to get built.”
