DOE Proposes Rule for More Effective Environmental Review of Clean Energy Projects – Climate Change

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On November 16, 2023, the US Department of Energy (DOE) proposed to amend its National Environmental Policy Act (NEPA) procedures to include a new categorical exclusion for certain energy storage systems and to expand its categorical exemptions for certain transmission lines and solar photovoltaic systems. The general purpose of the DOE proposal is to accelerate the deployment of clean infrastructure in the United States.1

The role of block exemptions in the clean energy transition

The Biden administration has set a goal of achieving 100% clean electricity by 2035 in the energy sector. Tea The Act on Investments in Infrastructure and Jobs and
Inflation Reduction Act include funding for DOE programs designed to drive strategic investments in critical electricity infrastructure to make the U.S. grid more resilient to the impacts of climate change and increase access to affordable and reliable clean energy.2 One critical means of accelerating infrastructure delivery and reducing project costs is to increase the efficiency of the environmental review and permitting process through the strategic use of categorical exemptions.

NEPA (42 USC 4321 et seq.) requires federal agencies to review the environmental impacts of proposals for major federal actions significantly affecting the quality of the human environment.3 The preparation of these environmental analyzes can be costly and time-consuming. A 2020 study by the Council on Environmental Quality (CEQ) found that the median time to complete an environmental impact statement (EIS) across all federal agencies is 3.5 years, while the average completion time is even longer, at 4. 5 years. Of the 1,276 EISs reviewed by CEQ, 1/2 took more than 3 1/2 years to complete and 1/4 took more than six years.4 Long completion times for environmental project review and approval, as well as the associated risk of litigation, create uncertainty that discourages private investment and can threaten the financial viability of critical projects.

In contrast, actions that are categorically excluded from detailed analysis usually do not have a significant impact on the human environment and therefore do not require the development of an Environmental Assessment (EA) or EIS.5 Maximizing the use of categorical exemptions for much-needed infrastructure projects is an important way for agencies to accelerate the deployment of clean infrastructure.

DOE is expanding its block exemptions related to clean energy infrastructure

DOE has established and maintains categorical exclusions for defined classes of activities that are supported by a record demonstrating that the actions do not normally have significant environmental effects, individually or cumulatively.6

DOE last made changes to its categorical exemptions in these areas in 2011.7 The DOE is the first agency to propose changes to its NEPA procedures through rulemaking in the Biden administration. The agency’s proposal appears to be part of a broader trend to increase the use of categorical exemptions to support the clean energy stewardship agenda. For example, the US Department of Homeland Security (DHS) and the US Department of Transportation (DOT) adopt a categorical exclusion of DOE electric vehicle charging stations under section 109 of NEPA, 42 USC §4336c, to be used for proposed DHS and DOT actions. .8

DOE’s proposed rule would add a categorical exclusion for certain energy storage programs and expand its existing categorical exclusions for transmission lines and solar PV systems.

  • Modernization and reconstruction of transmission lines.DOE’s current B4.13 categorical exemption applies to upgrading or rebuilding transmission lines that are “approximately 20 miles in length or less.” DOE proposes to expand this categorical exclusion by removing the mileage limitation. DOE stated that its experience with power line upgrades and rebuilds does not indicate that a specific mileage limit is a reliable boundary for whether a project has significant effects. Instead, the potential significance of environmental impacts from upgrading or rebuilding power lines is more likely to depend on local environmental conditions. Currently, categorical exclusion B4.13 also allows for “minor displacement of small segments of power lines”. DOE proposes to further expand this categorical exclusion by deleting the term “minor”. DOE argues that it is unnecessary to qualify the term “relocation of small segments” with the term “smaller.” DOE also proposes to specify that power line segments may be relocated “within an existing right-of-way or within otherwise previously disturbed or developed land.” This change would provide additional flexibility without increasing adverse environmental impacts. Additionally, in response to questions from industry groups, DOE confirmed that it is interpreting the B4.13 categorical exclusion to cover all types of power lines, including “gen-connector lines” and “power lines that feed into the federal electric transmission system ( e.g., Tennessee Valley Authority)” and associated project features such as access roads.

  • Solar photovoltaic systems. Current DOE categorical exemption B5.16, Solar Photovoltaic Systems, covers the installation, modification, operation, and removal of solar photovoltaic systems located on a building or other structure or, if located on land, in a previously disturbed or built-up area that generally includes less than 10 acres. DOE proposes to change this categorical exclusion by replacing the word “removal” with “decommissioning”. Under the proposed rule, “decommissioning” is intended to be broader and include recycling and other types of activities that occur when equipment is decommissioned. DOE is also proposing to remove the acreage limitation for proposed projects because, in DOE’s experience, acreage is not a reliable indicator of whether a project will have significant environmental impacts.

  • Energy storage systems. Finally, DOE is proposing to establish a new categorical exclusion (B4.14) for the construction, operation, upgrade, or decommissioning of an electrochemical battery or flywheel energy storage system in a previously disturbed or developed area or in a small area adjacent to a previously disturbed or developed area. The proposed rule does not define what constitutes a “small area.” However, the rule explains that DOE will consider whether a contiguous area is “small” on a case-by-case basis in the context of each specific proposal by looking at its proposed location, its size relative to industry standards, the relationship of the proposed action to similar types developments in the vicinity of the proposed action and the expected output of waste or emissions. DOE is proposing to limit the new B4.14 categorical exclusion to electrochemical battery and flywheel energy storage systems because it does not have sufficient information to conclude that compressed air energy storage, thermal energy storage (e.g., molten salt storage), or other storage technologies typically do not constitute potential for significant environmental impacts. In the proposed rule, DOE solicits comments that provide analytical support for whether these additional energy storage technologies meet the requirements for the categorical exclusion, and suggests that if DOE identifies sufficient support, it may revise the categorical exclusion in the final rule to include additional technologies energy storage.

Next steps

DOE is accepting comments on the proposed rule until January 2, 2024.

Footnotes

1. 88 Fed. Reg. 78681 (November 16, 2023).

2. See e.g., Infrastructure Investment and Jobs Act, HR 3684, Section 40001 et seq.; Inflation Reduction Act, H.R. 5376, Section 13001 A. seq.

3. 42 USC 4332(2)(C).

4. See Council on Environmental Quality, EIS Timeline Data Excel Workbook, (June 12, 2020)

5. 40 CFR § 1501.4(a) (“For efficiency, agencies . . . shall identify in their NEPA agency . impact on the environment.”).

6. 10 CFR Ch.

7. DOE, Implementing Procedures for the National Environmental Policy Act, 76 Fed. Reg. 63764 (October 13, 2011).

8. 88 Fed. Reg. 72525 (Oct. 20, 2023) (“This notice describes the categories of proposed actions for which DHS intends to use DOE’s CE electric vehicle charging stations and details interagency consultations.”); 88 Fed. Reg. 64972 (Sept. 20, 2023) (“The U.S. Department of Transportation (DOT) adopts the Department of Energy’s (DOE) categorical exclusion of electric vehicle (CE) charging stations under the National Environmental Policy Act for use in DOT programs and DOT managed funding opportunities. “).

© 2023 Perkins Coie LLP

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