Obama Flexing Executive Muscle for Renewable Energy

Ken Salazar's solar array and cowboy hat combo should be more common under the plan announced yesterday for the Southwest

Yesterday’s big announcement by Interior Secretary Ken Salazar heralded what may be a new era for solar power, as thousands of acres of federal land in six Southwestern states were set aside to become a special federal solar energy zone designed to facilitate siting, construction and deployment of as much as 70,000 MW of new solar capacity.

Today, it is wind’s turn in the sun. The front page of the Boston Globe and local broadcast reports are abuzz with the news that Governor Deval Patrick’s administration has released a new plan to re-zone state coastal waters to better balance the need for marine ecological protections with the hope that Massachusetts can harvest more of its offshore wind as useful electricity.

In the absence of all of the plan’s details (a full presser was scheduled for the afternoon of July 1 at the New England Aquarium in Boston), the media has already shifted to score-keeping. There is at least one clear loser, as the plan deals a death blow to a particular Buzzards Bay proposal for 300 MW of offshore wind. The wind farm would sit in what is now a restricted area.

The plan does set aside two specific areas for large-scale wind, and Jim O’Sullivan of the State House News Service quotes Ian Bowles, the state’s energy secretary, as telling reporters that “the Commonwealth [of Massachusetts]will want to put those areas out to bid and they would be, relatively speaking, on the fast track for development.” (sorry, SHNS is a subscription site – no link). Bowles allowed that the proponents of the Buzzards Bay project could bid to shift their 90+ turbines to one of the newly-designated areas, but added that he had no idea whether they intended to do so.

Bowles’ “fast-tracking” comment is direct, but not surprising. His own March Op-Ed in the NYT made reference to the administration’s perception of major offshore wind potential; and, those comments were strengthened considerably by the testimony Paul Hibbard, a state regulatory commissioner, gave before Congress in mid-June.

All the international investment, Washington clout and technological innovation in the world is for naught in a climate where a neighbor and ten friends can still get together and tie a project into a Gordian knot of appeals and reviews.

Until the full rule-making process is complete on both of these new policies, it is unclear what the real impact on siting will be. But, it seems obvious that neither policy will address all of the potential delays in getting turbines spinning. For example, the Massachusetts plan still grants local towns and regional planning agencies the authority to approve smaller wind projects in state coastal waters.

Taken together, yesterday’s federal announcement of a new plan for Southwestern solar zones and the Massachusetts offshore wind farm rezoning plan, demonstrate some interesting trends: first, a shift that brings policy more in line with rhetoric and second, a clear bias for executive action as against legislative enactment.

The two announcements are tangible steps toward aligning policy with the increasing rhetoric about the desire for greater renewable deployment. The major problem remains siting. Even in a fantasy scenario where there is no additional public opposition (which does NOT happen), the environmental and administrative processes at the local, regional, state and federal level are cumbersome.

Streamlined siting of generation assets is less meaningful without equivalent relief for building the transmission interconnections that are required to get wind off the high seas and solar rays out of the desert, and deliver usable energy to load centers.

The siting problem is a drag on development even as aggressive renewable portfolio standards have sent utilities out on the market for new renewable capacity (in spite of a year where they saw overall demand drop). It remains true even as huge sums of public money have been made available to subsidize renewable power and to spur development of new generation capacity.

Both of these announcements should – ostensibly – make siting, permitting and constructing a project easier. Both are still subject to public comment periods and possible amendment, but however the details emerge, it seems clear that what we will be left with is a more favorable climate for developers.

Both plans face at least one big additional question: even if they allow for streamlined siting of the generation asset, do they offer equivalent relief for building the transmission interconnections that will be required to get the wind off the high seas and the sun’s rays out of the desert, and deliver usable energy to load centers? Just ask Cape Wind, who was able to site their entire proposed farm in federal waters, whether relief from zoning and local/state court appeals for transmission infrastructure is needed.

The second trend is perhaps a little more wonkish and nuanced, but what does this spate of executive action mean for the future of energy infrastructure siting? Based on the blood bath that emerged in the House trying to get Waxman-Markey through, the measured bill that emerged, and the dim hopes of getting even that kind of bill through the Senate, it seems clear that if we are going to see swift, aggressive action on game-changing energy policy matters, it is likely to come from the executive corner of the government. While we can’t say how that trend might be greeted by the legislative bodies off in the other corner, we do have some indication of how the third member of the troika – the courts – will respond.

Swift, aggressive action on game-changing energy policy matters is likely to come from the executive corner of the government.

This spring, the Fourth Circuit rejected FERC’s attempts to grab a greater share of power under Federal Power Act amendments that were a part of the Energy Policy Act of 2005. The Piedmont decision interpreted FERC’s backstop authority as a sort of riding crop that allowed the executive agency to help spur movement in state siting decisions and prevent undue or bad faith delay. The court expressly rejected FERC’s claim that the EPAct 2005 amendments allowed it to overturn the decisions of state siting agencies.

We may soon have a similar indication of the expansiveness of executive agency authority in Massachusetts. After receiving a consolidated “super-permit” from the state’s Energy Facilities Siting Board, Cape Wind faces a new SJC appeal that is sure to allege that local zoning approvals should not have been preempted. Cape Wind already prevailed in a 2006 SJC decision that focused more on the question of administrative authority and practice than on the substantive issues around siting.

It will be interesting to see if the Massachusetts court follows the 4th Circuit in some sense by limiting executive authority over energy infrastructure. Either way, the fact remains that project developers will remain subject to a full panoply of potential legal remedies that opponents can use to delay construction. These policies themselves – in whatever form they ultimately take – will inevitably be tested and interpreted by the courts.

In spite of the new policies, a fundamental conflict in renewable energy generation siting remains: the resources are most often not collocated with load. In other words, the locals who are experiencing the hardships presented by the development are probably not the ones who need the increased capacity. Even if a developer can site a project in one of the Commonwealth’s new zones (say on the beaches south of Boston headed toward Cape Cod), they still face the fundamental question from locals: why should I allow 10 turbines on my beach so that you can generate more power for skyscrapers downtown? And that is to say nothing of the permits required to construct transmission lines, transformation facilities and other ancillary infrastructure needs.

It is a positive sign for developers when the leaders of our nation and our states decide to put some of their political capital where their rhetoric has been. But, none of these policies are a panacea. Developers need to focus on the whole project picture, but they must keep a wary eye at ground level. All the international investment, Washington clout and technological innovation in the world is for naught in a climate where a neighbor and ten friends can still get together and tie a project into a Gordian knot of appeals and reviews.

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