CHAPTER 5 FACILITY SITING
| Jurisdiction | United States |
(Mar 1981)
FACILITY SITING
Attorney at Law
Billings, Montana
and Brent R. Kunz
Attorney at Law Hathaway, Speight and Kunz
Cheyenne, Wyoming
During the past ten years existing or planned mineral development has given rise to legislation regulating the siting of energy related facilities. Almost thirty states have enacted requirements for energy facility applicants ranging from simple questionnaires to lengthy procedures related to the development of socio-economic and environmental baseline studies over a period of years.
This paper will focus upon the background of facility siting in the west national energy facility siting legislation, and specific statutes enacted in certain western states to cope with industrial development.
Three states with siting acts were singled out for review because of their different approaches to solving and mitigating impacts, their comprehensiveness and workability. Each of the states has had at least one major facility permitted or in process. The projects will be examined to determine their impact on the statute and whether or not the statute is working in a manner envisioned by the legislature.
The first statute to be reviewed in detail is Montana's. Passed in 1973,1 it was a direct result of development plans detailed in the North Central Power Study,2 and the Arab Oil Embargo.
In 1971, the North Central Power Study proposed construction of a total of forty-two mine mouth generating plants located at strip mines around the Northern Great Plains. Twenty-one of these plants were scheduled to be built in Montana alone. The study also projected a total generating capacity of 200,000 megawatts by the year 2000, which would be transmitted to load centers over a network of 765 kilowatt lines. As we know, the report, although blatantly overstated, did result in passage of siting legislation in the western states to cope with such development.
The second statute under scrutiny is Wyoming, which passed the Industrial Development and Siting Act3 in 1975. This comprehensive legislation was modeled after the 1973 Montana Act.
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Finally, the Washington Energy Facility Site Location Act4 will be reviewed. Although this legislation predates that of Wyoming and Montana, it has been amended to scrutinize projects which have been or will be sited in the state.
Within these three statutes lie several projects which have either demonstrated the workability of the act or the need for statutory amendments. Following the progress of applicants through the various acts and regulations may provide some guidance to a prospective applicant prior to submission of the application.
FEDERAL SITING LEGISLATION
The first major effort to enact a federal major facility siting law was introduction of the Power Plant Siting Act of 1971, which proposed the establishment of state or regional bodies to provide conclusive certification for power generation and transmission facilities.5
The proposal died in committee6 [1971-1972]. Another proposal, H.R. 6970, sought to amend the Federal Power Act to establish procedures designed to balance energy needs and the protection of the environment in planning electric power facilities.7
Although there is no specific federal siting act on the books, the siting and construction of powerplants requires compliance with a variety of federal laws. In the case of hydroelectric plants, licensing and construction is dependent on compliance with the Federal Power Act,8 and in the case of nuclear powerplants, with the Atomic Energy Act.9 In addition, all powerplants, hydroelectric, nuclear or fossil fuel, must meet the requirements of federal pollution control legislation, such as the Federal Water Pollution Control Act of 1972,10 the Clean Air Act and Amendments,11 Fish and Wildlife Coordination Act12 and Rivers and Harbors Act.13 The National Environmental Policy Act of 196914 also has had major impact in this area.
Although specific permits vary from facility to facility and are not the subject of this paper, certain federal approvals are necessary. The Environmental Protection Agency has proposed consolidation of permitting for several of its programs, including NPDES and Section 404, Dredge and Fill Permits under the Clean Water Act, P.S.D. permits under the Clean Air Act and hazardous waste management programs under the Resource Conservation and Recovery Act.15
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As to the National Environmental Policy Act of 1969, new regulations for implementing this act have been finalized. On May 24, 1977, President Carter issued Executive Order 11991, which streamlined the present system of regulations issued by the Council of Environmental Quality. The goal of Executive Order 11991 was to make the Environmental Impact Statement, almost always a necessity in any siting decision, more useful to decisionmakers and the public.16
STATE LEGISLATION
State legislation on powerplant siting follows a general pattern, though there are significant differences in detail from state to state. In 1970, the National Association of Regulatory Utility Commissioners developed a model called the Model State Utility Environmental Protection Act.17
Energy facility siting legislation has been enacted in one form or another in approximately thirty states. Several other states, including Utah, have proposed legislation pending before their legislatures.
In general, state energy facility siting laws include a policy statement which calls attention for the need to construct new power generating facilities balanced against the need for environmental protection. These policy statements generally conclude that facility siting should be managed so as to minimize adverse effects on the quality of life of the people of the state.
As to decision making, some states such as Minnesota designate the agency responsible for environmental protection to make planning decisions.18 Others have designated the agency in charge of public utility regulation to be responsible for decision making. Finally, states such as Washington and Wyoming have created entirely new agencies to make the decisions as to location and permit approvals.
As a general rule, most of the states require public hearings on the siting question. Washington, Montana and Wyoming all fall into this category.
Another typical provision sets out the criteria to guide the agency in approving a particular site, listing a variety of environmental consequences that need to be addressed, or providing for a balancing of economic and social factors, including energy needs and environmental consequences. Montana, as will be discussed later, requires a statement of need for the facility.19 Some states like Montana require the applicant to consider other alternatives in their application, as well as evidence submitted for the future expansion or construction of plants and forecasts of future needs for energy.20 Some
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states also require submission of 5, 10 or 20-year plans with the application as well as periodic updates.
Generally it can be said that most states with siting programs require a statement of the projected environmental impact of a proposed facility. However, only a few states, such as Montana and Wyoming, require the mitigation of adverse socio-economic impacts which the construction and operation of an energy facility may impose upon a community. This area will be considered later on in this paper when discussing cases in point in Wyoming and Montana.
A number of other states require that energy developers supply local communities with front end financing or prepayment of taxes for the financing of public improvements to offset the costs of socio-economic impacts. For example, Washington has required the monitoring of socio-economic costs so that any net financial burden to a community can be paid by the developer.
MONTANA
In 1973, Montana reacted to impending industrial development by passing the Utility Siting Act. The Act was amended in 1975, and is now known as the Montana Major Facility Siting Act.21 The Act, encompassing twenty-six pages, is comprehensive and leaves little doubt concerning the intent of the Legislature from 1973 to the present.
The policy and legislative findings of the Act do not differ significantly from the standard model acts with the exception of the phrase, "...the legislature finds that the construction of additional power or energy conversion facilities may (emphasis ours) be necessary to meet the increasing need for electricity, energy, and other products..."22 The Legislature apparently is not ready to concede a need for new facilities. This is a task left to the applicant.
The first step in the lengthy Montana process is filing an Intent to File an Application for a Certificate at least 12 months prior to the actual filing of an application.23
It should be noted that this is permissive rather than mandatory, but as an incentive the legislature provides for a 5% reduction of the filing fee if the applicant submits an Intent to File. The notice of intent shall specify the type and size of the facility to be applied for, its preferred location, a description of reasonable alternative locations, etc.24
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Even prior to the notice of intent, the applicant is required to conduct extensive baseline studies on hydrology, air quality, meteorology, terrestrial and acquatic ecology, soils and vegetation, and noise and solid waste. The applicant will also be required to discuss land use and socio-economic impacts for both the construction and operation and maintenance phases of the project.25
After the studies and the Intent to File are completed, the applicant is required to apply for a Certificate of Environmental Compatability and Public Need with the Department of Natural Resources and Conservation (the "Department").26 This certificate, if granted, is issued by the Board of Natural...
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