202004.08
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New Renewable Energy Siting Process Passed Into Law Bypasses Community Engagement

The new renewable energy siting process proposed by Governor Cuomo was passed into law on April 3 as part of the budget bill. The new process, included in the Accelerated Renewable Energy Growth and Community Benefit Act (the “Act,” see Part JJJ), establishes an Office of Renewable Energy Siting (Siting Office) within the Department of State (DOS) to consolidate the permitting of major renewable energy facilities into a single forum. While major renewable energy facilities already had a single forum (the Public Service Commission) for project approvals under Article 10 of the Public Service Law (Article 10), the Act streamlines the approval process largely by eliminating the lengthy Public Involvement and Preliminary Scoping phases of the Article 10 process and limiting the scope of involvement of local stakeholders.

Approval Process

Under the Act, major renewable energy facilities must receive approval from the Siting Office, with exceptions for existing approvals under Article 10. Major renewable energy projects are those with capacities of 25 megawatts (MW) or greater, but projects from 20 MW to 25 MW may opt-in to the process. In contrast to Article 10, where approvals were granted by a seven member siting board consisting of several state agencies (none of whom were from DOS) and two members from host municipalities, the approvals granted by the Act are solely by the Siting Office acting through its Director and the Department of Environmental Conservation, for certain federally delegated permits. Once an application is filed, the Siting Office has 60 days to determine whether the application is complete. Once the application is deemed complete, the Siting Office has one year to render a decision on the application.   

The process for obtaining a project approval is considerably streamlined as compared with Article 10. Prior to submitting an application for review, Article 10 required early consultation with stakeholders, the preparation and execution of a public involvement plan, a scoping phase to define the content of the application, and intervenor funds to support municipal and community participation—a process that took a minimum of 240 days and, in practice, several years. In contrast, the Act requires the Siting Office to establish uniform standards and conditions to be included in the application for each type of renewable energy facility. The only pre–application public engagement requirement under the Act is “proof of consultation” with host municipalities prior to submittal of the application, with the necessary consultation limited to procedural and substantive requirements of applicable local laws.

Under the Act, the first the local municipality will formally receive a project document is when the application is filed. Once the application is deemed complete, the Siting Office, with relevant state agencies (but no local input), will publish draft permit conditions for public comment by providing “written notice” to municipalities, publication in a newspaper of general circulation, and posting the notice on the Siting Office website. This, practically speaking, largely shifts the notice burden from applicants (under Article 10) to the host municipalities to ensure the affected public is made aware of the project.  

The municipalities then have only 60 days to submit a statement to the Siting Office indicating whether or not the project complies with local laws. Practically speaking, this may be an unreasonable timeframe for host communities to respond. Most host communities are small rural towns with limited staff, where  60 days is an insufficient timeframe for the communities to assemble technical and legal experts to review the application, the newly published permit conditions, and assess compliance with local laws. 

Notably, the local laws upon which the Siting Office seeks a compliance statement are only those concerning the environment and public health and safety—the community character, social, economic, visual, and other aesthetic considerations specifically referenced in Article 10 are not mentioned under the Act. If a municipality deems the project non–compliant with local laws, an adjudicatory hearing will only be held if a “substantive and significant issue” is raised, at the discretion of the Siting Office, otherwise a non–adjudicatory public statement hearing will be held in the host municipality. This is similar to the standard for adjudication of issues in Department of Environmental Conservation  adjudicatory hearings.

As with Article 10, the Siting Office can choose not to apply a local law that is “unreasonably burdensome”, but the standard for what is considered “unreasonably burdensome” is substantially different under the Act. Under Article 10, the local law could be disregarded if it was “unreasonably burdensome in in view of the existing technology or the needs of or costs to ratepayers.” Under the Act, the local law may be disregarded if it is unreasonably burdensome in light of the state’s renewable energy targets and the environmental benefits of the renewable energy facility. The Siting Office, which exists solely to approve renewable energy projects, may be very reluctant to deem compliance with a local law to take precedent over approving a renewable energy project.

After the municipal local law compliance statements, public comments, and, if held, adjudicatory hearing are held, the Siting Office will issue a siting permit for the project if it complies with applicable laws and regulations. In contrast, under Article 10, the seven–person siting board needed to find that the project was in the public interest and required extensive findings related to the environmental and socioeconomic impacts of the project.    

Transition From Article 10 to the Siting Office

As noted, the Siting Office has up to one year to promulgate regulations and uniform standards and conditions to administer the new siting process. In the interim, applicants may submit applications to the Siting Office if they comply with the application requirements for Article 10.  

Any projects that have filed a public involvement plan pursuant to Article 10 may elect to continue to proceed under Article 10 or elect to obtain approval from the Siting Office. Projects that have already had their applications deemed complete under Article 10 can proceed directly to the Siting Office process, where the application would automatically be deemed complete under the Act. Given the lower standards and streamlined process for obtaining approvals from the Siting Office, the only situation where an applicant would likely remain in the Article 10 process is if adjudicatory hearings are already underway.  

Host Benefit Agreements and PILOTs

While the Act requires that the permittee “provide a host community benefit” under Article 10, host municipalities already generally reach agreements with developers for payments-in-lieu-of-taxes (PILOTs) and community host benefit payments. The “host community benefit” contemplated by the Act provides for much more state involvement and limits the potential benefits to either: (a) a host community benefit “as determined by the Public Service Commission” that potentially includes utility bill discount or other compensatory or environmental benefit for host community residents; (b) a project as determined by the Siting Office; or (c) as “subsequently agreed to between the applicant and host community.”  Presumably the host municipality can still negotiate a PILOT since the Act does not appear to supersede the authority to negotiate PILOTs contained in Real Property Tax Law §487.

Conclusions

Siting sufficient projects in a timely manner to meet New York’s ambitious renewable energy goals was a challenge under some of the onerous provisions of Article 10. But, instead of reforming (and adequately staffing) the Article 10 process, the Act blows it up by largely eliminating local public engagement processes and required input from other state agencies. While the Act may be a great leap forward in the rate of renewable energy project approvals, it may be at the expense of host communities. Communities may end up living with poorly designed projects for 40 years that could have been made better with a more appropriate level of community engagement.  The best remaining opportunity for municipalities to influence the process is for municipalities and other stakeholders to participate in the upcoming public comment periods for the proposed Siting Office regulations.

As we have advised municipalities, in light of the Act, it is even more important that local laws related to wind and solar energy and energy storage development be reviewed periodically and kept up to date with current practices, experiences, and community values.  In addition, municipalities will have to quickly respond to new projects, so it is prudent to assemble a technical and legal team at the first hint of a major renewable energy project coming to town.