DOE Issues Proposed Rules to Accelerate Permitting and Enable More Rapid Deployment of Interstate Transmission Projects

On August 10, 2023, the Department of Energy (“DOE”) issued a Notice of Proposed Rule Making (“NOPR”) proposing to establish an integrated Coordinated Interagency Transmission Authorizations and Permits Program (“CITAP Program”) that provides an expedient approval process for qualifying interstate transmission projects. Triggered by the Infrastructure Investment and Jobs Act (“IIJA,” also known as the “Bipartisan Infrastructure Law”) and the Inflation Reduction Act (“IRA”), the CITAP Program intends to relieve capacity constraints and congestion on the nation’s electric transmission grid by:

• Improving the existing Integrated Interagency Pre-application Process (“IIP Process”) to identify the relevant necessary permits at the earliest opportunity;
• Setting a two-year deadline for Federal entities to issue decisions and permits authorizing electric transmission projects after the publication of a Notice of Intent (“NOI”) to prepare an Environmental Impact Statement (“EIS”) in compliance with the National Environmental Policy Act (“NEPA”)
• Simplifying the administrative record by incorporating the IIP Process administrative file into a single docket that contains all the information assembled by the relevant Federal entities; and
• Serving as the lead agency in preparation of a single EIS designed to serve the needs of all relevant Federal entities.

The DOE published the NOPR in the Federal Register on August 16, 2023, opening a 45-day public comment period that will end on October 2, 2023. The DOE is particularly interested in comments on the IIP Process requirements for transmission developers.

Background of Federal Interagency Collaboration on Transmission Projects

The Energy Policy Act of 2005 (Pub. L. 109-58) created a new section 216 to the Federal Power Act (“FPA”), setting forth provisions authorizing the DOE to coordinate all Federal authorizations related to environmental reviews needed for siting interstate transmission projects, including NEPA. (16 U.S.C. § 824p). Implementing this authority, a total of nine Federal agencies entered a Memorandum of Understanding in 2006, committing to work together to carry forward the purposes of FPA section 216. This effort resulted in the DOE’s promulgation of 10 CFR part 900 in 2008, under which transmission project proponents could request the DOE act as the lead agency in coordinating the Federal authorization process for interstate transmission facilities.

Through the IIJA and the IRA, Congress made significant investments to catalyze renewable energy generation projects and incentivize the electrification of homes, businesses and vehicles. However, the corresponding emissions reduction benefits of increased utilization of renewable energy cannot be realized without the requisite transmission infrastructure to accommodate the rapid changes in generation and load enabled by the two laws. In the NOPR, the DOE cited a 2023 analysis by Grid Strategies LLC, a power sector consulting group, that found that congestion costs have risen from an average of $7.1 billion between 2016 and 2021 to $20.8 billion in 2022.

Identifying this constraint and recognizing the vital need to increase capacity throughout the nation’s electric transmission grid, in May 2023, nine Federal Agencies entered a Memorandum of Understanding (the “2023 MOU”) outlining the reasons that contributed to significant delays in the permitting timeline for transmission facilities. The 2023 MOU set forth a six-month deadline for the DOE to update its regulations under 10 CFR part 900 that ultimately led to the DOE’s CITAP Program proposal in the NOPR.

The CITAP Program

Under the CITAP Program, the DOE intends to improve the efficiency of permitting processes for qualifying transmission facilities by coordinating Federal agency permitting reviews. While nothing in the NOPR would nullify the existing obligations of other Federal agencies in permitting transmission projects, through increased agency coordination the DOE expects that the CITAP Program will expedite the permitting process. With decreased authorization times, additional transmission capacity will enable the growth of low-cost renewable energy projects and provide substantial congestion relief.

Qualifying Project

The DOE proposes to limit the CITAP Program to “qualifying projects,” which include onshore electric transmission lines of 230 kV and above that are expected to require the preparation of an EIS pursuant to NEPA. The NOPR provides that offshore marine transmission lines may be allowed to participate in the CITAP Program under discretionary provisions for accepting “other projects.”

Pre-Application – The Improved Mandatory IIP Process

A focal point of the NOPR includes improvements to the IIP Process. The IIP Process precedes the DOE’s decision to issue a NOI to prepare an EIS for a project and front-loads the Federal permitting process to develop a project-specific schedule that establishes binding deadlines for Federal authorization decisions.

The DOE proposes to improve the IIP Process and make it a mandatory precondition for a project proponent’s participation in the CITAP Program. The proposals also require the relevant Federal entities to participate in the IIP Process, while non-Federal entities’ participation will be left to their discretion. Moreover, the proposed rules require project proponents submit public participation and engagement plans to describe how the project proponent will collaborate with local communities, Tribes, and other affected stakeholders.

To initiate the IIP Process, a project proponent must submit an initiation request to the DOE, including, among other things, a summary of the project and affected environmental resources and impacts. The proposed rules require that the project proponent submit additional information, mapping, and a plan for public engagement in the initiation request, which will allow the DOE to identify the relevant agencies for efficient coordination.

The IIP Process will be iterative in nature with three milestone meetings between the applicable Federal entities and the project proponent. These meetings include an Initial Meeting, a Review Meeting, and a Close-Out Meeting.

After the initiation request is submitted, the proposed rules require the DOE to convene the Initial Meeting within 30 days of providing notice that the initiation meets the DOE’s requirements. As proposed, the Initial Meeting would be used to discuss the IIP Process, identify the relevant Federal authorization processes, and determine arrangements for the project proponent to contribute funds to the DOE to cover its costs in administering the IIP Process.

After the Initial Meeting, the project proponent will develop and submit 13 resource reports that the relevant Federal entities will use to inform future application processes and the NEPA review. The 13 resource reports are: General project description; 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; Alternatives; Reliability and safety; and Tribal interests. In addition to NEPA, the resource reports are envisioned to develop data and materials relevant to review under section 106 of the National Historic Preservation Act of 1966 (“NHPA”), section 10 of the Rivers and Harbors Act, section 404 of the Clean Water Act (“CWA”), and the Endangered Species Act (“ESA”).

Following the submission of the resource reports, the project proponent would then meet with the DOE and relevant Federal entities once more during the Review Meeting, which would occur at the request of the project proponent. The purpose of the Review Meeting is to provide a meaningful opportunity to identify issues prior to the close of the IIP Process and the submission of Federal permitting applications.

The new rules would also allow the DOE, if it determines necessary, to authorize the CITAP Program applicants to initiate their consultation with State Historical Preservation Officers and Tribal Historical Preservations Officers under section 106 of the NHPA during the IIP Process.

The DOE, project proponent, and relevant Federal agencies would then convene a Close-Out Meeting to ensure that the project proponent is ready to begin the Federal authorization processes. At the Close-Out Meeting, the DOE will present the final project-specific schedule, including milestones and final deadlines for review of the project proponent’s applications and related environmental reviews.

After the Close-Out Meeting, the project proponent then applies to the necessary Federal entities for authorization, triggering issuance by the DOE and any NEPA co-lead agency of a NOI to prepare an EIS and commencement of the NEPA process.

The Standard Schedule

In the 2023 MOU, the signatory Federal agencies determined that the DOE would prepare a standard schedule that each project-specific schedule would be based. The 2023 MOU provided that the “final decision on all Federal authorizations within two years of the publication of a NOI to prepare an EIS or as soon as practicable thereafter.” In response to this directive, the DOE prepared a draft standard schedule, which will be subject to revision and finalized concurrently with the final rule for 10 CFR part 900.

While largely in the hands of the project proponent, the standard schedule projects that the IIP Process will take approximately a year, culminating in the publication of a NOI to prepare an EIS beginning the two-year timeline for the issuance of a Record of Decision (“ROD”).

The standard schedule provides proposed milestone dates for Federal review and authorization of a project after the issuance of the NOI to prepare an EIS. The standard schedule provides the following projected milestone dates:

For questions regarding the NOPR, the proposed CITAP Program, transmission project development and permitting, or other energy-related matters, please contact Lisa Gilbreath, Nicholas Salalayko, or any member of Pierce Atwood’s Energy Infrastructure Project Development and Finance Group.