Vol. No. 53-2 Utilities

Utilities

Retrofitting the Grid: How Senator Manchin’s Permit Reform Could Facilitate an Energy Transition in Texas

Introduction

Climate change will remain a prominent issue in the United States for decades. Attempting to decelerate global warming will require the country to undergo an energy transition and revolutionize its underlying electrical grid.[1] Partially with this end in mind, Senator Joe Manchin released the text for a bill that would accelerate the permitting process for energy projects across the U.S.[2] The initial ninety-one-page document was never formally introduced into the Senate, and Senator Manchin ultimately failed to tack a shorter version onto a defense spending package in December 2022.[3]

The proposal garnered an onslaught of criticism from all directions, including from Democrats, Republicans, and environmental groups.[4] Much of this criticism centered on the bill’s push for agencies to “take all necessary actions to permit the construction and operation” of a project in Appalachia and expedite the construction of other new fossil fuel pipelines.[5] Regardless of the proposal’s deficiencies, experts acknowledge that some kind of permitting reform is necessary for the large-scale renewable energy transition at hand.[6]

This Note explores the provisions proposed in Senator Manchin’s bill and how it might have impacted the construction of a hypothetical wind energy project in Texas’s High Plains region, which includes forty-one counties in the Texas Panhandle and West Texas.[7] Such a project would require permitting interactions with local governments, state agencies, and eventually the federal government.[8] This Note focuses on three key categories of federal permitting requirements—wildlife protection, air and water protection, and National Environmental Policy Act (NEPA) review—and how they would apply to a proposed turbine project. Then, it explores how these requirements would have interacted with Senator Manchin’s proposed legislation.

Federal Permitting Requirements

Wildlife Protection

Since turbine projects can potentially kill flying animals such as birds and bats, the U.S. Fish and Wildlife Service (FWS) has jurisdiction over any new wind installation in the High Plains of Texas.[9] The statutes that affect new wind turbines include the Migratory Bird Treaty Act, the Bald and Golden Eagle Protection Act, and the Endangered Species Act (ESA).[10] The ESA provides a straightforward example. If a project were to incidentally “take” a species on the endangered species list,[11] FWS must authorize the take through a formal permitting process.[12]

Air and Water Protection

Section 404 of the Clean Water Act requires permitting for projects that discharge dredged or fill materials into protected waters and wetlands.[13] A new turbine project in the High Plains would likely fall under this statute’s jurisdiction due to the presence of playa lake wetlands throughout the region,[14] which are essential to the cyclical recharge of the Ogallala aquifer.[15] These jurisdictional waters would be affected by large amounts of waste product from project construction—both from the turbine facility itself and the miles of transmission lines required to bring the power to population centers like Dallas and Austin.[16]

National Environmental Policy Act (NEPA) Review

NEPA is unlike the above statutes in that it is a procedural requirement rather than a permitting mandate.[17] NEPA requires a two-stage evaluation of the environmental impacts of a proposed federal action and is overseen by the White House Council on Environmental Quality.[18] First, for a new wind project, an agency overseeing the permitting process—for example, FWS for projects affecting land species[19]—must prepare an “environmental assessment” to determine whether the project would have a significant impact on the environment.[20] If the agency determines there would be a significant impact, it must then prepare a longer and more detailed “environmental impact statement” (EIS).[21] This review allows local communities, industry groups, and environmental organizations to comment on the project. Our hypothetical wind installation in the High Plains of Texas would certainly require a full NEPA review.[22]

NEPA tends to be the target of criticism since the review process can be lengthy (a median of three and  a half years), although the cause of such delays are in dispute.[23] Even after an agency finishes its EIS, litigants frequently challenge projects on the basis of procedural deficiencies, causing further delays, increasing costs, and stalling momentum for new projects.[24] While NEPA has provided wins for environmental groups,[25] it also poses a hurdle to new renewable energy projects that must be planned for.

How Senator Manchin’s Bill Would Affect This Process

Senator Manchin’s bill would impact a proposed wind facility in the High Plains by accelerating NEPA review and setting a statute of limitations for court challenges.[26] First, the bill defines “major project” as one that requires “multiple authorizations, reviews, or studies” and one that requires an EIS.[27] Since our proposed facility would be a significant public utility, it would likely be classified as a “major project”; this analysis will proceed under this assumption.

As a first step in the accelerated process, the “lead agency”[28]—e.g., the Environmental Protection Agency—would coordinate with each “participating agency”[29]—e.g., FWS for ESA authorization—to create a single environmental document that covers all applicable environmental statutes.[30] Currently, projects may require multiple agencies to create separate documents, such as a “Biological Opinion” prepared by FWS.[31] Additionally, the bill sets a page limit for this singular environmental document of 150 pages, with extra space of up to 300 pages for a project “of unusual scope or complexity.”[32] For major projects, this entire environmental review process should be finished no later than two years after the lead agency provides notice that it will began preparing an EIS.[33] Thus, for our proposed wind facility, if the permitting process would begin now, environmental review would be statutorily required to conclude by 2025 rather than 2026 or later.[34] If an agency in this process fails to meet the deadline, the project sponsor may petition a court to issue an order to the agency to complete its task within ninety days.[35]

Should the involved federal agencies, state officials, or project sponsors reach an impasse, the bill sets forth prescribed dispute resolution schedules to keep the major project moving forward.[36] Regarding potential litigation for a project, the bill sets a statute of limitations of 150 days after an agency finalizes the permit application and requires the reviewing court to undergo “expedited consideration.”[37] If any aspect of the environmental document is remanded, the court must set a “reasonable schedule” to fix the deficiency, not to exceed 180 days from the initial court order.[38]

An additional aspect of Senator Manchin’s bill would assist with creating the expansive new transmission lines required for wind energy expansion in the High Plains. Should the transmission lines be trapped in the CWA state-certification phase, the bill would   empower the Federal Energy Regulatory Commission (FERC) to issue a construction permit for transmission siting.[39] Since any new transmission lines for a wind project in the High Plains would likely be attached to the interstate electrical grid, this reform would likely apply to the theoretical wind facility.[40] Thus, in this case, if the Public Utility Commission of Texas failed to act on a permit application within one year, FERC might intercede and issue one itself.[41]

Conclusion

Constructing new electrical facilities is an exceedingly complex process. Even One could easily get lost digging through the text of the permit reform legislation and its numerous exceptions, deadlines, and chokepoints which could kill a new project. This Note only touches the surface of the regulatory requirements that must be met before applicants can construct new facilities. There is no doubt that some reform is needed to expedite the energy transition. Senator Manchin’s bill provides a starting point for legislators and regulators to consider how to best balance environmental interests while facilitating the transformation of our energy grid.

Paul Sarahan is a member of Enoch Kever PLLC. He focuses his practice on environmental, safety, and transportation issues. He has 28 years of experience in policy, regulation, and commercial use of the environment and has represented clients in the energy, chemical, manufacturing, transportation, and retail industry sectors before federal, state, and local agencies. Paul is a graduate of the University of Texas at Austin, The University of Texas School of Law, and the University of Houston Law Center’s Energy, Environmental and Natural Resources LL.M. program.

Jesse Bennett is a dual JD/MPAff student in his second year from Rochester, New York. He attended Hamilton College where he majored in economics and minored in history. Jesse joined TELJ as a 1L.