Endangered Species Act & Renewable Energy Projects

1. Endangered Species Act & Renewable Energy Projects Endangered Species LawCLE International April 8-9, 2010 Robert D. Thornton, Partner

2. The Endangered Species Act Meets Climate Change • Novel challenges to the Endangered Species Act (“ESA”) and California Endangered Species Act (“CESA”) regulatory systems

3. Greenhouse gasses

8. Gov. Schwarzenegger • “If we cannot put solar power in the Mojave Desert, I don’t know where the hell we can put them.”

9. The Endangered Species Act Meets Climate Change (cont.) • Early solar development projects in the desert are facing considerable environmental challenges • (See February 11, 2010 letter from EPA to BLM on the Ivanpah solar energy project)

10. RENEWABLE ENERGY: Massive Calif. solar proposal faces species, water issues  (Thursday, March 18, 2010) Scott Streater, E&E reporter A 1,000-megawatt solar power plant planned for Riverside County, Calif., could strain local groundwater supplies and infringe on habitat for endangered desert tortoises and rare plants. But state and federal regulators say they are confident the project can be built as long as proper mitigation measures are taken. * * *

11. The Endangered Species Act Meets Climate Change (cont.) • Diverse views regarding the development of large-scale renewable projects in the desert • See, Solar FlareUps, California Lawyer (Nov. 2009)

12. The Endangered Species Act Meets Climate Change (cont.) • Creative approaches to ESA and CESA compliance are necessary to avoid a “train wreck” in time necessary to achieve greenhouse gas emission reduction goals

13. The California Air Resources Board Scoping Plan • CARB Scoping Plan • Achievement of AB 32 goals • 30 percent reduction from business-as-usual emission levels projected for 2020 • 15 percent from today’s levels • On a per-capita basis – • reducing annual emissions from 14 tons of carbon dioxide equivalent to 10 tons by 2020

14. The Renewable Profolio Standard • The table below demonstrates that the state has a long way to go to achieve the 33% Renewable Portfolio Standard (“RPS”)

15. The Renewable Energy Planning Process • Renewable Energy Transmission Initiative (“RETI”) • Brings together stakeholders to identify, plan, and establish an analytical basis to inform planning and permitting for the next major transmission projects

16. The Renewable Energy Planning Process (continued) • Three phases: • Phase 1 -- Initial identification and ranking of potential renewable resources zones; broadly identify transmission requirements to access these zones • Phase 2 – Development of conceptual transmission plans to the highest-ranking zones • Phase 3 -- Support detailed plans of service for commercially viable transmission projects; establish the basis for regulatory approvals of specific transmission projects

17. The Renewable Energy Planning Process (continued) • The RETI process: • Assumes large-scale remote renewable energy projects will be required to achieve the state’s 33% RPS standard • Compares the environmental and economic costs of different renewable technologies • Prioritizes competitive renewable energy zones (“CREZs”) and associated transmission improvements

18. The “Net Short” Calculation • Estimate of the amount of renewable energy from new remote projects likely to be required in order to meet state RPS goals.

19. The Renewable Energy Planning Process (continued) • California is generating less than 12% of its electricity from renewable sources • The two largest renewable sources are geothermal and small hydro • Geothermal and small hydro have their own set of environmental challenges

20. The Renewable Energy Planning Process (continued) • To meet the “net short” need from CREZ resources in California, the Phase 1B report concluded that large-scale renewable energy projects would be required

21. CREZ • CREZs “represent the most cost-effective large scale resources in the state.” Phase 1B, 1-5 • The overwhelming majority of these resources are located in southern California – in the Tehachapi Mountains, Salton Sea area of Imperial County and the Mojave Desert

22. CREZ Evaluation

23. CREZ • High-level environmental screening that: • (1) excludes certain areas based on statutory or policy restrictions; and • (2) indicates areas where energy development may create fewer environmental concerns “It is possible that renewable energy development in any CREZ could result in significant environmental impacts.” Phase 2A Report 1-5

24. Revised CREZ Evaluation • CREZ to the left -- expected to have fewer environmental concerns per unit energy production • CREZ toward the bottom -- expected to have lower cost/higher economic value per unit of energy. • Ranking does not include transmission costs

25. This solar grid in the Mohave desert utilizes thousands of mirrors called heliostats to focus solar energy on a boiler, where water is vaporized at over 1,000 degrees to create steam to drive turbines. Think of it as a nuclear power plant, without the radioactive dangers or the giant cooling towers to clog up the skyline. Overall this system can produce 240,000 megawatts of renewable electricity a year.

28. The Renewable Energy Action Team • Energy Commission and Fish and Game formed the Renewable Energy Action Team (REAT) • Streamline review of renewable projects: • Assigning high priority to renewable energy projects • Obtaining additional staff and resources to review renewable projects

29. REAT Best Management Practices http://www.energy.ca.gov/2009publications/CEC-700-2009-016/CEC-700-2009-016-SD-REV.PDF • Suggestions to avoid and minimize impacts

30. Best Management Practices • Previously disturbed land with no or limited biological resource value • Select generation sites that minimize the need for new transmission

31. Best Management Practices • Transmission routes -- avoid environmentally sensitive areas • Parallel existing transmission lines using existing rights of way • Minimize water use • Avoid T & E species areas

32. Environmental Community BMPs • This guidance is consistent with the position advanced by the environmental community • See June 29, 2009 letter from environmental groups to Secretary Salazar and Governor Schwarzenegger

33. The Desert Renewable Energy Conservation Plan • Renewable Energy Conservation Plan under the California Natural Community Conservation Planning Act (“NCCPA”) • Fish and Game Code, § 2800 et. seq.

35. The Desert Renewable Energy Conservation Plan • NCCPA -- state parallel to the habitat conservation plan provisions of the ESA. 16 U.S.C. § 1539(a)(1)(B) • Authorizes planning for endangered species conservation on a landscape level • Provides an alternative mechanism for covered activities to obtain incidental take approvals under CESA for listed and unlisted species • Authority for so-called “no surprises” assurances • Environmental Protection Information Center v. California Dep’t of Forestry and Fire Protection, 44 Cal. 4th 459, 509-511 (2008) [Holding that CESA did not authorize “no surprises” assurances and discussing assurances provisions of NCCPA]

36. CESA – NCCPA Comparison

37. The Desert Renewable Energy Conservation Plan • CESA incidental take authority for renewable energy projects on public lands in the Mojave Desert • Regulatory approval for certain renewable energy projects: • Does not propose to provide CESA coverage for renewable projects on private lands • not within the jurisdiction of the California Energy Commission (e.g. photovoltaic projects);

38. DRECP Schedule • CDFG’s 2009 schedule shown below

39. Solar Programmatic Environmental Impact Statement • Programmatic EIS on large-scale solar development on public lands • See, http://solareis.anl.gov/index.cfm

40. Programmatic EIS Status • Release of the Programmatic EIS originally scheduled for spring of 2009 • BLM and DOE postponed completion of the Draft EIS

41. The “Fast Track” Permit Process • Focus has shifted to the “fast track” permitting process announced by Secretary Salazar in June 2009 • http://www.blm.gov/wo/st/en/prog/energy/renewable_energy/fast-track_renewable.html

42. The “Fast Track” Permit Process (Continued) • Projects are advanced enough in the permitting process that they could potentially be cleared for approval by December 2010, thus making them eligible for economic stimulus funding under the American Recovery and Reinvestment Act of 2009

43. ESA Incidental Take Permitting Options • Section 7 – projects that require approval from a federal agency (e.g., projects on federal land) • Section 10 – Habitat Conservation Plan • Section 4(d) Rule for threatened species

44. ESA Incidental Take Permitting Options (Continued) • Incidental take statement is itself an agency action that triggers NEPA • Ramsey v. Kantor, 96 F.3d 434 (9th Cir. 1996) • The PEIS intended to simplify NEPA compliance for renewable energy projects, but the PEIS may not be completed for several years

45. ESA Incidental Take Permitting Options (Continued) • Section 10 permits incidental take in accordance with habitat conservation plan • Section 7 “jeopardy” standard applies • Minimizes and mitigates impacts to covered species “to the maximum extent practicable” (16 U.S.C. § 1539(a).)

46. ESA Incidental Take Permitting Options (Continued) • USFWS acknowledges that permitting timelines under Section 10 can take many years – even for projects that have minimal impacts on listed species • 3-5 years for a project with low impacts • 6-9 years for a project with more significant impacts

47. ESA Incidental Take Permitting Options (Continued) • The Section 4(d) Rule Alternative • Mechanism for the Service and the Department of Fish and Game to promote siting of renewable energy projects in areas with the least impact on threatened species

48. The 4(d) Alternative • Authorizes the Service to issue regulations that are “necessary and advisable” to provide for the conservation of threatened species 16 U.S.C. § 1533(d) • “4(d) Special Rules” have the effect of allowing take of certain threatened species under conditions prescribed by the special rule

50. The 4(d) Alternative • 4(d) Special Rules allow persons to take the subject species in the course of conducting the enumerated activities, in compliance with the ESA, without individual authorization from the Service • A type of permit by rule