Developing wind power projects in Massachusetts: anticipating and avoiding litigation in the quest to harness the wind.

• Author: Koehler, Mike

"The needlessly filthy and inefficient way we use energy is the single most destructive thing we do to the environment ..." (1)

1. INTRODUCTION

   Imagine a world where our electricity comes from sources that do not pollute the air we breathe, the water we drink, or the soil in which our food grows. Given increasing concern about global warming, and a deeper understanding of the political implications of our dependence on foreign oil, many Americans are looking for alternatives to a fossil fuel powered economy. (2) Fossil fuels (coal, oil, and natural gas), however, provide nearly two-thirds of our electricity in the United States. (3) Thus, replacing the fossil fuels that drive many of the country's electric generation facilities will require significant investments of technological expertise and financial resources.

   Wind power projects present one exciting alternative that will help us move towards a more sustainable energy future. Suppose that Jones represents WindCo, a wind energy company eager to build land-based wind energy projects in Massachusetts. (4) What legal strategies might Jones employ to help WindCo navigate the legal environment that will ultimately lead to the construction of WindCo's wind project? (5)

   Contrary to what some may think, securing permission to build a wind project in Massachusetts is far from a sure thing. (6) Numerous experiences of other wind developers should inform Jones and WindCo of the various issues they are likely to face as they set out to build their project in Massachusetts.

   One positive example for wind developers to look at is the experience of wind proponents in Hull, Massachusetts. In Hull, the municipal utility currently generates electricity from one 660 kW turbine located next to the town's high school and one 1.8 MW turbine located on a retired municipal landfill. (7) Given that 1 MW provides enough power for approximately 1,000 homes, the combined capacity of the two Hull turbines is enough to power approximately 2,400 homes. (8) Supporters of the wind turbines in Hull attribute part of their success to the fact that the local community is both the investor and the beneficiary of the wind project. (9) The installation of the Hull Wind turbines has not generated any debilitating litigation because the projects enjoy widespread community support. Indeed, the community hopes to build four more turbines about two miles offshore as soon as 2008. (10)

   Unlike the good experience in Hull, the Cape Wind project has sparked fierce debate. The conflict arises out of Cape Wind's proposal to construct 130 wind turbines in Nantucket Sound, which would generate approximately 420 MW of electricity. (11) The average output would provide enough electricity to power approximately three-quarters of the Cape and the Islands. (12) Opponents of the Cape Wind project raise seven broad categories of objections: that the permitting process has been inadequate and ill-conceived, that Nantucket Sound is a valuable resource worth preserving, that the proposed turbines create unacceptable aesthetic impacts, that the turbines adversely affect the safety of boaters, that the region does not need the electricity supplied by the proposed turbines, that the costs outweigh the benefits, and that there are numerous other risks associated with constructing the first major offshore wind project in the United States. (13) As a result of fierce opposition, the Cape Wind project has spawned two cases that have reached the Court of Appeals for the First Circuit. (14)

   This note endeavors to provide attorneys with insight into the types of litigation issues they are likely to face when representing a wind project developer in Massachusetts. Part II of this note explores the reasons for the increased interest in developing wind power projects. As more and more projects are proposed in Massachusetts, litigants are more likely to ask courts to decide issues specifically related to wind energy projects. Part III, therefore, analyzes litigation issues facing wind projects throughout Massachusetts and the United States. (15) Armed with this insight, attorneys representing wind project developers in Massachusetts will hopefully be successful in helping their clients build projects, thereby helping Massachusetts to become more of a player in the wind energy industry.

2. WHY WIND?

   1. The Scale of Growth

      Tapping the available wind resources in the United States could theoretically provide enough power to meet our country's electrical energy needs. (16) Partly because of this vast potential and the increasing desire to diversify energy supplies, wind is the "fastest growing electricity-generating technology in the world." (17) Between 1999 and 2004, global wind capacity grew by over 34,000 MW to a total of 47,317 MW at the end of 2004. (18) In 2004 alone, wind developers installed 7,976 MW of new electrical capacity around the world. (19) This installed capacity is enough to power approximately 7.9 million homes worldwide. (20)

      In the United States, wind energy installations tripled between 1998 and 2003 when installations grew from providing 2,000 MW of domestic electricity to nearly 6,000 MW. (21) By the end of 2004, the United States captured 6,740 MW of its total electricity needs from wind. (22) This total represents approximately 14.2% of worldwide wind capacity. (23)

      Massachusetts, however, has not enjoyed a comparable growth in wind generation capacity. Of the thirty-three proposed or existing wind turbine installations in Massachusetts, twelve are at private residences, nine are at schools, and eight are specifically intended to provide electricity to the local utility grid. (24) While Massachusetts, as of June 2004, captured nearly 2,000 MW (or approximately 6% of total energy needs in Massachusetts) of "clean energy," less than 1% of that clean energy was generated by wind. (25)

   2. Factors Spurring Growth

      Although wind energy development in Massachusetts has not grown as dramatically as it has in other parts of the United States and the rest of the world, the factors driving industry growth are beginning to coalesce in Massachusetts. Consumer demand for renewable energy, technological advances improving turbine efficiency, and various governmental incentives make wind an increasingly affordable and viable energy source. (26)

      The key governmental incentive for wind production in the United States is the Production Tax Credit (PTC). (27) First enacted in the Energy Policy Act of 1992, the PTC was most recently extended by Congress through December 31, 2007. (28) The PTC provides a 1.9 cent per kilowatt-hour credit for electricity generated by a wind farm during the first 10 years of the farm's existence. (29)

      Massachusetts wind energy project developers will also benefit from state assistance. Much of the recent state support for renewable energy projects in general has its roots in the Massachusetts Energy Deregulation Act of 1997. (30) The Act created the Renewable Energy Portfolio Standards (RPS), which mandate that utilities provide consumers with a certain amount of electricity from new renewable sources each year. (31) In 2007, for instance, at least 3% of the electricity sold to Massachusetts consumers by electric utilities must come from new renewable sources. (32) The fact that Massachusetts utilities must comply with the annual RPS targets creates a market for the electricity generated by wind power projects in Massachusetts because utilities are likely purchasers of any electricity generated by wind farms.

      Wind project development in Massachusetts also holds exciting promise because of the existence of the Massachusetts Technology Collaborative (MTC). MTC is a quasi-public state agency focused on, among other things, the development of renewable energy projects. (33) Companies such as WindCo will find a willing adviser in MTC's Renewable Energy Trust (RET). (34)

      One key MTC project that is spurring the growth of wind development in Massachusetts is the Community Wind Collaborative ("Collaborative"). (35) The Collaborative was designed to develop wind projects in Massachusetts by encouraging municipalities to collaborate with MTC to build wind projects in the municipality. (36) MTC developed a wind map for all of New England. (37) Of the localities with sufficient wind resources, over forty said they were interested in working with MTC. (38) One theory behind the Collaborative is that if more people have a "Hull" experience, then resistance to wind developments will decrease; as resistance abates, so, too, does the likelihood of litigation. (39)

3. INTO THE FRAY OF LITIGATION (40)

   As more wind developers seek to capitalize on the factors spurring growth in wind energy projects in Massachusetts, Massachusetts courts will likely be asked to decide more cases specifically involving wind energy projects. This note, therefore, seeks to help practitioners avoid litigation by understanding various cases decided by courts in both Massachusetts and around the country related to (or analogous to) wind energy projects. The lessons learned from the various cases, as well as practical insight from regulators and practitioners, lead to the following pieces of advice.

   1. Avoid litigation by working with the regulators.

      Building a wind project requires interaction with a maze of local, state and federal agencies. (41) On the federal level, wind projects may require permits through the Environmental Protection Agency (EPA), the Fish and Wildlife Service (FWS), and the Federal Aviation Administration (FAA). (42) On the state level, wind projects may require review under the Massachusetts Environmental Policy Act (MEPA), or require permits from the Department of Environmental Protection (DEP) or the Massachusetts Natural Heritage Program (MNHP). (43) On the local level, wind projects generally must comply with local regulations such as the local zoning code. (44) Key statutes include MEPA, (45) the...