Department of Energy Seeks Comments on Reforms to Accelerate Electric Transmission Project Permitting

On August 10, 2023, the U.S. Department of Energy (DOE) proposed to substantially revise regulations aimed at accelerating the Federal environmental review and permitting processes associated with the development of onshore electric transmission projects.¹ DOE’s Coordination of Federal Authorization for Electric Transmission Facilities Notice of Proposed Rulemaking (NOPR) recognizes that the significant clean energy investments spurred by the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) will be for naught if the U.S. fails to rapidly expand its transmission capacity.² While there are a multitude of issues delaying or entirely preventing the deployment of needed electric transmission infrastructure, permitting, and specifically federal permitting, often plays a role.³ Accordingly, DOE proposes to address the issue by (i) establishing a Coordinated Interagency Transmission Authorizations and Permit (CITAP) Program that will, as its name suggests, coordinate federal agency permitting of electric transmission with a goal of issuing all federal authorizations within two years and (ii) requiring project proponents to engage in an Integrated Interagency Preapplication (IIP) Process that will include submitting 13 separate resource reports and attending a series of pre-CITAP Program meetings.

Background

The Energy Policy Act of 2005 (EPAct) established a national policy to enhance coordination and communication among federal agencies with respect to permitting electric transmission infrastructure and added a new section to the Federal Power Act providing DOE with authority to coordinate all of the necessary federal authorizations and environmental evaluations for the location of electric transmission projects.⁴ Although DOE has implemented regulations related to EPAct’s electric transmission goals, “the process of building transmission projects can [still] take more than a decade.”⁵ In light of a May 2023 Memorandum of Understanding between DOE and eight other federal agencies⁶ recognizing that now is a “key moment to improve timely, sustainable, and equitable permitting of transmission lines,”⁷ along with the Fiscal Responsibility Act of 2023’s requirement that a lead federal agency be designated for purposes of processing National Environmental Policy Act (NEPA) reviews,⁸ DOE has determined that its regulations must be updated.⁹

Proposed Reforms
1. CITAP Program

A key component of the CITAP Program is that DOE will serve as the lead agency for conducting NEPA reviews and will be responsible for preparing a single Environmental Impact Statement (EIS) designed to meet the requirements of all federal entities and inform those entities federal authorizations decisions.¹⁰ The establishment of DOE as a lead agency for NEPA purposes represents a departure from the current process by which the lead federal agency is determined through a consultation process—often not until just before the project application is submitted—involving the relevant federal agencies.¹¹ The NOPR removes the uncertainty of who the lead agency will be along with any delays associated with making the lead agency determination. The NOPR does, however, still allow for the designation of a co-lead agency with the “the most significant interest in the management of Federal lands or waters that would be traversed or affected by the qualifying project.”¹²

As part of the CITAP Program, DOE is also proposing to establish intermediate and ultimate deadlines for federal agencies to issue authorizations and environmental reviews based on a standard schedule. Accordingly, in conjunction with the NOPR, DOE published a draft CITAP Program Standard Schedule which establishes that an EIS Record of Decisions (ROD) will be issued 24 months following the issuance of a Notice of Intent (NOI) to prepare an EIS.¹³ While this two-year timeframe does not take into account the IIP Process or the time between when a project developer submits its application and DOE issues an NOI, it would, assuming the two-year NOI-to-ROD timeline can be met, represent a welcome development to electric transmission project developers.

Additionally, the NOPR proposes to require that project-specific schedules be established which would set “binding deadlines by which Federal authorizations and related environmental reviews for a particular project must be completed.”¹⁴ While the NOPR describes such deadlines as “binding,” it nevertheless notes that the MOU agreed to by the nine federal agencies contemplated a process to modify project-specific deadlines if they are not met.¹⁵ Project-specific schedules would be developed during the IIP Process based on consultation with the project sponsor and relevant agencies.¹⁶

2. IIP Process

While the NOPR promises a more coordinated and streamlined federal permitting effort will be achieved in the form of the CITAP Program, it also proposes to mandate—in a significant departure from the prior approach—that project proponents engage in an extensive IIP Process before they are eligible to submit a project application.¹⁷ DOE contends that this pre-application process is necessary to help it set realistic permitting milestones for the proposed project and expeditiously process the project once its enters the CITAP Program.¹⁸ The required IIP Process has both substantive and procedural requirements.

As to the substantive requirements, the NOPR proposes to develop 13 separate “resource reports” that are “intended to develop data and materials that will facilitate Federal entities’ review of the project proponent’s applications under a number of Federal statutes.”¹⁹ The 13 required resource reports include a general project description and reports on water use and quality; fish, wildlife and vegetation; cultural resources; socioeconomics; geological resources; soil resources; land use, recreation and aesthetics; communities of interest; air and noise quality; alternative options; reliability and safety; and tribal interests.²⁰ In proposing this requirement, DOE recognizes that the information requested is “extensive” and that “gathering that information will require a significant investment of time and effort on the part of the project proponent.”²¹ Nevertheless, DOE contends that this information would have to be submitted at some point in the permitting process and that it will “ultimately allow both the project proponent and the Federal entities to avoid time and resource-consuming pitfalls that would otherwise appear during the application process.”²²

In addition to the 13 resource reports, the NOPR proposes to require that project proponents submit public participation and engagement plans.²³ Project proponents would be required to follow their submitted plans and conduct robust engagement with Tribes, local communities and other stakeholders early in a proposed project’s lifecycle.²⁴

The resource report and engagement plans submitted by project proponents would be vetted by DOE and other agencies through a series of three IIP Process meetings.²⁵ First, following a project proponent’s valid request to initiate the IIP Process, DOE will convene an initial meeting with the project proponent and all relevant federal, tribal and non-federal entities.²⁶ Following the initial meeting, drafts of the resource reports must be submitted to DOE prior to the IIP Process review meeting.²⁷ At the review meeting, federal entities would be able to present “any concerns” with the draft reports.²⁸ Finally, a project proponent must submit a request for a close-out meeting with updated, final resource reports.²⁹ It is at the close-out meeting that DOE will “present the final project-specific schedule.”³⁰

3. Other Proposed Reforms

DOE also proposed a number incremental reforms to facilitate the federal permitting of electric transmission projects. The NOPR, for example, proposes to combine the various documents developed as part of the IIP Process into a single administrative file that will be entered into a single, consolidated docket containing all information assembled and utilized by the relevant federal entities as the basis for their permitting decisions.³¹ DOE also proposed to limit the scope of the CITAP Program to high-voltage projects that are 230 kV or greater, although it provided a process for a non-qualifying project to otherwise qualify.³² The NOPR also proposes to shorten some of the timelines for DOE to provide feedback or respond to meeting requests.³³

Takeaways and Next Steps

The IIP Process is reminiscent of the pre-filing process the Federal Energy Regulatory Commission (FERC) requires for liquefied natural gas (LNG) terminal developers and large greenfield pipeline projects whereby developers submit to a pre-environmental review process where the agency can review and refine the environmental resource reports that will become the bulk of an application for Natural Gas Act authorization. The process is beneficial because the applicant and government officials can converse and exchange information during that time without running afoul of any ex parte communication rules but can also be extremely time consuming and may not prevent a contentious application review process. Given that DOE’s pre-application approach may have a significant burden on developers, DOE may look to the processes adopted by other agencies to assess whether it (and the other federal permitting agencies) can deliver federal permitting approvals within a two-year timeframe. Similarly, commenters may seek to assess the success of similar pre-application processes when considering how to respond to the NOPR. Proposed projects that have a significant federal permitting component may find that the burden associated with the IIP Process is worth the payoff of the accelerated CITAP Program timeline by creating a more structured NEPA process.

Comments on the NOPR are due on October 2, 2023. In particular, DOE seeks comment on the requirements proposed in the 13 resource reports³⁴ and the “burden and costs associated with the requirements contained in [the] proposed rule.”³⁵ A public webinar on the NOPR will be held on August 23, 2023, by DOE’s Grid Deployment Office.³⁶

_{1 Notice of Proposed Rulemaking: Coordination of Fed. Authorizations for Elec. Transmission Facilities, DOE Docket No. DOE-HQ-2023-0050 (Aug. 10, 2023).}

_{2 The NOPR specifically cites a report finding that the U.S. must expand its transmission capacity by 2.3% annually to realize the full benefits of the IRA. 2.3% would represent a major increase given that over the past decade the U.S.’s transmission capacity has increased by just 1% per year. Id. at 50.}

_{3 See, e.g., Greg Brophy, The TransWest Express transmission line is a win for rural communities. Why did approval take 15 years?, UTILITYDIVE (May 16, 2023), https://www.utilitydive.com/news/transwest-express-transmission-permitting-reform-brophy/650342 (noting that “[i]t took the federal government 15 years to review and approve the TransWest Express project. Fifteen years: That’s more than triple the time it took for the U.S. to win World War II.”).}

_{4 NOPR at 6 (citing Energy Policy Act of 2005, Pub. L. 109-58 (2005)). See also 16 U.S.C. § 824p (2018).}

_{5 DOE, Coordinated Interagency Transmission Authorizations and Permits Program (Aug. 10, 2023), https://www.energy.gov/gdo/coordinated-interagency-transmission-authorizations-and-permits-program (last visited Aug. 15, 2023) (“CITAP Page”).}

_{6 The eight other federal agencies are the Department of Agriculture, Department of Commerce, Department of Defense, Department of the Interior, Environmental Protection Agency, Federal Permitting Steering Improvement Steering Council, Council on Environmental Quality, and the Office of Management and Budget.}

_{7 Dep’t of Ag., et al., Memorandum of Understanding among U.S. Department of Agriculture, Department of Commerce, Department of Defense, Department of Energy, Department of the Interior, Environmental Protection Agency, Federal Permitting Steering Improvement Steering Council, Council on Environmental Quality, and the Office of Management and Budget Regarding Facilitating Federal Authorizations for Electric Transmission Facilities (May 2023), https://www.whitehouse.gov/wp-content/uploads/2023/05/Final-Transmission-MOU-with-signatures-5-04-2023.pdf.}

_{8 Pub. L. No. 118-5 (2023).}

_{9 NOPR at 10.}

_{10 Id. at 10, 18.}

_{11 Id. at 18.}

_{12 Id. at 43.}

_{13 DOE, Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program, Draft Standard Schedule at 5 (Aug. 10, 2023), https://www.energy.gov/sites/default/files/2023-08/CITAP_Draft-Standard-Schedule.pdf.}

_{14 NOPR at 18.}

_{15 Id. at 17.}

_{16 Id. at 18.}

_{17 Id. at 11.}

_{18 Id. at 12.}

_{19 Id. at 13.}

_{20 Id. at 31.}

_{21 Id. at 14.}

_22 Id.

_{23 Id. at 14-15.}

_{24 Id. at 15.}

_{25 Id. at 13.}

_{26 However, relevant non-federal entities are not required to participate. Id. at 11.}

_27 Id.

_28 Id.

_{29 Id. at 13-14.}

_{30 Id. at 40.}

_{31 Id. at 18.}

_{32 Id. at 73-75.}

_{33 See, e.g., id. at 39.}

_{34 Id. at 33.}

_{35 Id. at 55.}

_{36 CITAP Page, supra note 5.}