Siting and Permitting Challenges

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From LSI seminar - Renewable Energy in the Pacific Northwest, August 9 and 10, 2007 in Seattle Washington.  Authored by Timothy McMahan (partner) & Eric Martin (summer associate).

Tim McMahan is a partner and shareholder with Stoel Rives LLP. He practices in the areas of land use, real estate development, environmental, and municipal law. He has offices in Vancouver, Washington and Portland, Oregon.

Tim has extensive experience in representing energy facility developers, property owners and municipal clients in Washington and Oregon. Tim’s practice focuses principally on permitting utility and energy facilities including pipelines, natural gas generation and wind energy facilities, as well as commercial and industrial facilities. Tim’s experience on behalf of public sector clients includes planning and permitting municipal water and wastewater facilities. He has represented developers and public sector clients both through the permit process and in administrative and judicial litigation, including Washington’s State Environmental Policy Act (SEPA), NEPA, Shoreline Management Act and Growth Management Act compliance. Tim represents energy facility developers in Washington and Oregon, including practice before the Oregon Energy Facility Siting Council (EFSC) and the Washington Energy Facility Site Evaluation Council (EFSEC).

Tim led the permitting efforts for FPL Energy’s Stateline Wind Energy Facility (300-plus MW, Walla Walla County), the RES North America Hopkins Ridge Wind Energy Facility (350 MW, Columbia County) and PPM Energy’s Big Horn Wind Power Project (250 MW, Klickitat County), and participated in permitting Horizon Wind Energy’s Wild Horse Wind Power Project (312 MW, Kittitas County) and Kittitas Valley Wind Power Project (approximately 160 MW), as well as other pending projects in Washington and Oregon. Tim is also lead permitting counsel for natural gas exploration and pipeline projects in Washington and Oregon.

INTRODUCTION

In this time of increasing energy demand and heightened concerns over climate change, wind energy is the fastest growing source of electrical power generation in the country. The American Wind Energy Association projects that over 3,000 megawatts ("MW") of wind energy generating capacity will come online this year alone. Much of this development is driven by the renewable portfolio standards ("RPS") that now exist in over 20 states across the nation, and further in anticipation of a national RPS.

Washington citizens voted to join this movement by passing the Initiative Measure No. 937 (I-937), which established Washington’s RPS, in November 2006. Renewable resources, such as wind, sun, and geothermal, must serve at least 15 percent of qualifying Washington utilities’ needs by 2020. Similarly, just a few months ago the Oregon legislature passed the Oregon Renewable Energy Act, which requires Oregon’s largest utilities to purchase 25 percent of their load from renewable power sources by 2025.

One of the unique aspects of siting renewable energy facilities in Washington is that project applicants can choose to proceed under either state or local review, regardless of the electrical generation potential of the project. To date, most wind energy facilities have been approved by county permitting agencies, with relatively little opposition or delay. Securing approval from the state Energy Facility Site Evaluation Council ("EFSEC") has been more difficult. In 1976 the Washington legislature expanded the Thermal Power Plant Siting Act (the "Act") to encompass the siting of other energy facilities in addition to thermal power plants. The Act and its amendments provide for the Governor’s certification of any such facilities after receiving a recommendation from EFSEC. The purpose of the Act was to develop a single, streamlined procedure for the selection and use of sites for energy facilities and the identification of the State’s position with respect to each proposed site.1 The State recognized the need for more energy facilities and wanted to "avoid costly duplication in the siting process and ensure that decisions are made timely and without unnecessary delay."2 Originally intended to facilitate the siting of nuclear facilities, EFSEC is designed as an efficient, "one stop" permitting process.

If the proposed site is inconsistent with local land use plans, zoning ordinances, or other development regulations, EFSEC can recommend that the Governor preempt these regulations. As it stands now, the applicant must "make the necessary application for change in, or permission under, such land use plans or zoning ordinances, and make all reasonable efforts to resolve the noncompliance" before EFSEC can make a preemption recommendation.3 This requirement has allowed project opponents to substantially inhibit EFSEC’s review and certification process. In Kittitas County, for example, Horizon Wind Energy has spent five years working with the local government to resolve noncompliance issues related to its Kittitas Valley Wind Power Project.4 EFSEC, however, has proposed new administrative rules that will change the duplicate requirement of local application processes, hopefully creating a clearer process for wind energy advocates to secure site approval from EFSEC. The new rules, which are tentatively scheduled to be adopted in September or October of this year, should help Washington meet its RPS on time.

In Oregon, local governments are authorized to approve wind energy projects up to 104 MW of generation capacity. The Oregon Energy Facility Siting Council ("EFSC") must consider projects proposing to generate more than 104 MW. The Oregon EFSC is governed by extensive administrative rules, and energy facility siting, while onerous and time consuming, is generally a reasonably predictable process.

As the need to develop more renewable energy capacity increases, so too can local resistance to renewable energy projects. Although most wind projects are approved, they can be hard fought. One of the primary challenges in the local review process can be addressing the disinformation about wind energy that opponents can easily access on the Internet. For example, with little valid scientific research, opponents claim that people living near wind turbines are at risk of developing what one notorious "expert" calls "wind turbine syndrome."5 Once such unfounded "scientific" information has been disseminated (particularly by the Internet), correcting people’s misperceptions can be difficult. Other challenges also exist. The following wind farm projects from four regions of the country illustrate some of the challenges wind power advocates are experiencing as they make huge strides toward meeting the country’s growing demand for energy.

A. Massachusetts

Perhaps the most controversial, or at least the most notorious, wind farm in the United States is Energy Management Inc.’s proposed Cape Wind project on Horseshoe Shoal in Nantucket Sound. Consisting of 130 turbines, an electrical service platform, and a 12-mile-long underwater electrical cable, the 450-MW project would be visible from the southern shore of Cape Cod (4.7 miles away), Martha’s Vineyard (5.5 miles away), and Nantucket (11 miles away).

Proposed in 2001, Cape Wind was greeted by opposition from powerful political figures, including U.S. Senator Edward M. Kennedy, whose family compound on the coast in Hyannisport is about six miles from the proposed wind farm, and former Massachusetts Governor Mitt Romney. The Alliance to Protect Nantucket Sound (the "Alliance") organized and raised millions of dollars to oppose the project, using Walter Cronkite, who owns a home on Martha’s Vineyard, in its radio advertising. The Alliance’s efforts, however, have encountered a number of difficulties. In 2003 the Alliance was criticized for misrepresenting the size of the project, its location, and the visibility of turbines from the shore, and Cronkite announced that he was withdrawing his opposition to the project. Project opponents also lost two lawsuits seeking to stop construction of a tower to collect wind data on Horseshoe Shoal.6 In 2004 an Alliance employee issued a fraudulent press release stating that a local manufacturing company had decided not to do business with Cape Wind.7 In 2005 billionaire Bill Koch become the Alliance’s co-chairman. Koch lives part time at his estate overlooking Nantucket Sound and stated, "I’m interested in my view and the value of my property on the Cape. . . . I freely admit I don’t want to look at (the turbines)."8 Last year the Alliance lost its legal challenge to the Massachusetts Energy Facilities Siting Board’s conditional approval of the necessary transmission lines.9

Unlike most wind farms across the United States, the federal government is primarily responsible for most of the project permitting because the proposed site is in federal waters.10 The Army Corps of Engineers initially led the National Environmental Policy Act review and released a 3,800-page combined draft Environmental Impact Statement ("EIS") in 2004. Its preliminary conclusion was that the environmental, public health, and economic benefits of the wind farm would exceed the minor short-term environmental costs. The federal government, however, restarted the environmental review process when Congress enacted the Energy Policy Act of 2005, which gave the Department of the Interior authority to manage renewable energy projects on the Outer Continental Shelf and gave the Minerals Management Service ("MMS") primary responsibility for the environmental analysis and regulatory oversight of such projects. MMS is expected to issue its draft EIS this fall and the final EIS in 2008. Because the underwater electrical cable and power grid connections are within their jurisdictions, Commonwealth, regional, and local entities control some aspects of the necessary permitting.

B. Texas

Proposed wind farms have been given a much different reception in Texas,11 which according to wind survey data is second only to North Dakota in terms of wind energy potential. Texans’ pro-business and strong property rights attitudes, coupled with ranchers’ newfound ability to earn precious revenue from leasing their land to wind developers, has made Texas a wind-friendly state. As one Texas rancher explained, "Our ranch just makes a profit. This year, the cows aren’t making any money because there’s no grass. [But the wind farm] is total profit without any work."12 Texas recently surpassed California as the state with the most installed wind energy generating capacity, and earlier this year the U.S. Department of Energy selected Texas to be the home of one of two facilities to test giant wind-turbine blades.

Although most Texans, who are accustomed to seeing various oil and gas production machinery dotting the landscape, may not object to wind farms, some opposition to wind farms does exist. For example, the Horse Hollow Wind Energy Center ("Horse Hollow") emerged victorious from the first trial in Texas in which a wind farm was alleged to be a nuisance. In 2005, FPL Energy announced the first phase of the now complete Horse Hollow facility, which is the largest wind farm in the world with a 735-MW capacity from 421 turbines built over almost 47,000 acres, 200 miles west of Dallas. Shortly after FPL Energy’s announcement, 11 landowners sued, initially alleging that the noise and sight of the turbines would create a nuisance in this area of "[r]anch homes, second homes, vacation homes and retirement homes by persons who have acquired substantial assets in the economically prosperous areas of Texas."13 The plaintiffs failed to stop Horse Hollow’s construction, and the judge threw out their visual nuisance claims because Texas law does not allow such claims. After a two-week trial in December 2006, the judge issued directed verdicts in favor of FPL Energy against two plaintiffs. After two days of deliberations, the jury found that the noise did not substantially interfere with the other nine plaintiffs’ use of their land. Two of these plaintiffs lived 1,800 feet from the turbines. The plaintiffs are currently appealing. As more wind farms are constructed in the state, Texans may become increasingly concerned about siting issues.

C. Wisconsin

Another FPL Energy proposed project, the Addison Wind Farm, is unique in that it is one of the few examples of proposed wind farms to be abandoned during the permitting process. In the fall of 1999 FPL Energy submitted an application for a conditional-use permit ("CUP") to Addison Township for a 33-turbine, 30-MW wind farm. After a local newspaper published an article about wind turbine noise, FPL Energy withdrew its application and decided to focus first on educating the community about wind farms. It held four public meetings, but project opponents, primarily residents of expensive new subdivisions built for Milwaukee commuters, were not swayed. An opposition group, the Town of Addison Preservation Group ("TAPG"), formed, as did a group of project supporters called the Taxpayers for Addison Wind Farm.

TAPG sued the town’s zoning administrator in December 1999, and after the lawsuit was dismissed in February 2000, FPL Energy resubmitted its CUP application. TAPG then alleged that town officials had violated numerous state laws, but the district attorney determined an investigation was not warranted. FPL Energy subsequently withdrew its application after learning that the Federal Aviation Administration had concerns about the location of some towers. It submitted a scaled-down version of the project—28 turbines with a 25-MW total capacity—in October 2000, but several landowners, on whose property FPL Energy no longer planned to construct turbines, now joined the opposition.

The town held two contentious public hearings in December 2000 and January 2001 with hundreds of residents attending and both proponents and opponents claiming to speak for the community. At the time, the main issues were alleged noise "pollution" and a concern that stray voltage could harm the area’s dairy cows. To address this concern, FPL Energy agreed to encase underground cables within 1,000 feet of a dairy barn in heavy vinyl covering and place all other cable in a thick bed of sand.

The town’s Plan Commission was to consider the CUP application at a meeting in February 2001. A few hours before the meeting was set to begin, it was cancelled after TAPG filed a lawsuit seeking to determine whether a state alternative energy law limited the town’s authority to regulate the wind farm. The lawsuit’s filing started a series of distressing events driven by the deep divisions in the community over the proposed wind farm. When two Town Board (the "Board") members suddenly resigned just months after their election, the Board appointed replacements, both of whom had publicly announced their opposition to the wind farm. A judge subsequently declared that the nomination process used for their appointments violated state law, and the Board appointed unaligned replacements. Another member of the Board resigned in the face of a recall election, and two town attorneys resigned while another was dismissed. The local government was in such turmoil that the town’s bank said it would no longer process the town’s checks.

By late 2001 the local government had straightened itself out and turned its attention back to FPL Energy’s CUP application. By this time project opponents were focused on a series of allegations, including noise pollution, the risk of ice being thrown onto county roads, and the health effects of sunlight reflected off turbine blades ("shadow flicker"). In January 2002, the Plan Commission preliminarily approved the CUP with the condition that no turbines be located within 1,000 feet of any residence, road, or the property boundary of an individual who was not leasing land to FPL Energy. FPL Energy responded that this condition, which would allow only seven or eight turbines to be constructed, violated state law,14 but ultimately decided to withdraw its application as the relatively small project was not worth the cost of challenging the decision. The turmoil within the community regarding the Addison Wind Farm cast such a long shadow over wind farm projects in Wisconsin that not one wind project came online in the next five years. The concern, however, has somewhat abated now, and Invenergy Wind’s Forward Wind Energy Project in southwestern Wisconsin is now under construction.15

D. California

An overview of wind farm projects in the United States would not be complete without examining what is happening in California. Although it has now been surpassed by Texas as the state with the most wind energy capacity, California led the way in wind energy development for the past three decades and at one time had more than 80 percent of the wind energy capacity in the entire world. One of the earliest projects in California was in the Altamont Pass southeast of San Francisco. Over the years more than 5,000 relatively small and now obsolete turbines were installed there. Unfortunately, these small turbines caused an unacceptable number of raptor fatalities, providing added impetus to the current drive to replace small turbines throughout the state with fewer but larger and more advanced turbines. The Altamont Pass experience has also encouraged the wind energy industry to implement now-standard pre-project avian usage protocols, as well as post-construction fatality monitoring and other measures intended to minimize significant avian impacts.16

One example of this retrofit initiative is PPM Energy’s Dillon Wind Project in Palm Springs. PPM Energy is proposing to construct five turbines within the city and another 40 turbines on two parcels of unincorporated land. New 327-foot turbines will replace the 274-foot turbines that once operated on two of the three sites. The project encountered some resistance, because residential developments have been built in the vicinity on what had been undeveloped land when the original turbines had been installed. One resident summed up her opposition to the project, saying, "It was cute to have a few windmills here and there. We don’t need larger windmills and we don’t get any benefit from them at all."17 Despite this opposition, both city and county elected leaders have approved the necessary permits. Palm Springs’ mayor said, "We need to do our part for the planet, not just Palm Springs. I see Palm Springs as being the renewable-resource center for this country."18

CONCLUSION

As concerns about climate change increase and people recognize that more wind farms are needed to meet state RPSs, the general population is becoming increasingly wind-friendly. Although local opposition will never completely disappear, states across the country, including Washington and Oregon, will experience more wind energy development in the coming years. However, increasing development will change landscapes, affecting more residents. With additional development in the "back yards" of existing residents, Washington and Oregon can anticipate increasing clashes between state and federal policy (encouraging and "incentivising" wind energy development) and local opposition.

____________________________________________

1RCW 80.50.010.

2RCW 80.50.010(5).

3WAC 463-28-030(1).

4The Kittitas Valley Wind Power Project was originally proposed at 121-turbines, and over 180 MW. In an effort to address local concerns regarding potential visual effects, the Project was amended to 64 turbines.

5Dr. Nina Pierpont—originally an opponent of a project in her community—appears widely in opposition information on the Internet.

6Ten Taxpayers Citizen Group v. Cape Wind Assocs., LLC, 278 F. Supp. 2d 98 (D. Mass. 2003), aff’d, 373 F.3d 183 (1st Cir. 2004) (holding that construction of the tower does not fall within Massachusetts’ jurisdiction to regulate fisheries); Alliance to Protect Nantucket Sound, Inc. v. U.S. Dep’t of Army, 288 F. Supp. 2d 64 (D. Mass. 2003) aff’d, 398 F.3d 105 (1st Cir. 2005) (upholding U.S. Army Corps of Engineers’ permitting of the tower).

7In 2006 the Alliance’s former research director paid $15,000 to settle the resulting defamation lawsuit.

8Kevin Dennehy, "Koch: It’s About Money," Cape Cod Times, Oct. 7, 2005.

9Alliance to Protect Nantucket Sound v. Energy Facilities Siting Bd., 858 N.E.2d 294 (Mass. 2006).

10This is in contrast to Superior Renewable Energy LLC’s proposed 500-MW facility off the shore of Padre Island and Galveston-Offshore Wind, LLC’s proposed 150-MW project off the shore of Galveston Island in Texas. These projects are not in federal waters, because Texas maintained the sovereignty over submerged lands it had as an independent country when it became a state in 1845. Its sovereignty extends 10.36 miles, or three leagues, offshore, rather than the three miles most states enjoy.

11Texas currently has 3,352 MW of wind energy generating capacity. Massachusetts, on the other hand, has just four megawatts of wind energy capacity.

12 Barry Shlacter, "Rancher’s Windfall: More West Texas Landowners Are Signing Deals with Wind-Farm Developers," Fort Worth Star-Telegram, Jan. 26, 2006.

13Plaintiffs’ Eighth Amended Petition and Request for Injunctive Relief at 18, Rankin v. FPL Energy, Cause No. 46138-A (Taylor County Dist. Ct. Feb. 24, 2006). The lead plaintiff, Dale Rankin, who owns a chemical company, had purchased a small home on almost 115 acres. He and his wife then remodeled the original house; built another house for themselves, a residence for the property manager, a large barn, an arena, a polo field, and numerous corrals, paddocks and pens for their horses; cross fenced the property; and placed power lines underground.

14Wisconsin ex rel. Numrich v. City of Mequon, 626 N.W.2d 336, 371 (Wisc. Ct. App. 2001) ("Local restrictions are permitted [by Wisconsin’s alternative energy law] only if they serve the public health or safety, do not significantly increase the cost or decrease the efficiency of the system, or allow for an alternative system of comparable cost and efficiency. Beyond those, no other restrictions are allowed.").

15The Forward Wind Energy Project is unique in that it is compensating all property owners whose land is within one-third of a mile of a turbine.

16The Pine Tree Wind Project in the Sierra Nevada Mountains is representative of the extensive pre-project studies undertaken to assess potential avian impacts. Developed by Wind Turbine Prometheus, LP ("WTP"), this 80 turbine, 120-MW project will be the largest municipally-owned wind farm in the country. WTP conducted two years of pre-project avian studies, and avian monitoring will continue for one year after the project becomes operational. Last week the California Court of Appeals rejected an allegation by project opponents that the avian impacts had been insufficiently studied. See Kerncrest Audubon Soc’y v. City of Los Angeles Dep’t of Water and Power, No. F050809, 2007 WL 2208806 (Cal. Ct. App. Aug. 2, 2007).

17Leslie Mariah Andrews, "Residents to Dillon Wind: We Will, We Will Stop You!!!" Desert Local News, Dec. 8, 2006.

18Julia Glick, "Palm Springs City Council Rejects Appeals of Wind Turbine Project," The Press-Enterprise, July 25, 2007.

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