Avoiding Regulatory Missteps for Developers and Landowners

Amanda James

A. Permitting Regulations

The decision to install a wind system often involves more than an economic

analysis to determine if the financial incentive programs sufficiently reduce the capital

cost to make the project profitable or if a wind generator can produce electricity cheaply

enough to make the investment worthwhile. There are several additional matters to look

into first. A key consideration in both project design and cost-benefit analysis is

governmental approval of required permits for the facility. Depending on the size of the

project and the geographic location, a variety of federal, state and local regulations need

to be evaluated.

State permit regulations often mirror federal counterparts and may be more

stringent. Compliance with the particulars of the state siting statutes can be a

comprehensive and lengthy process. In addition to land use permits, typical elements of

any government review process will include:1

- Project rationale;

- Detailed site plan;

- Maps and data describing wind characteristics at the proposed site;

- Visual simulations of the project components;

- Maps of potential environmental impacts;

- Detailed analysis of the impact and mitigation plan when an environmental

analysis is not otherwise required by a federal or state agency;

- Written approvals or contracts from agencies or third parties (e.g. utility

companies, property owners, equipment manufacturers, emergency services, and

any state or federal agencies); and

- Reclamation plan.

1 Abby Rivenbark, Brandon Hoskins, Janet Harrison, Local Government Regulation of Wind Energy Development in Montana 5 (The University of Montana School of Law, Nathan Stone, ed. 2012) (2009). [hereinafter Riverbank, Local Government].

When embarking on the regulatory review process, it is important to evaluate the

procedural paths and substantive paths, the timelines for obtaining various permits, any

legal review required, and what the appellate process entails. The wind project developer

will base a permit strategy on considerations such as what federal, state, and local permits

are required, whether there is an environmental review required at the federal or state

level, if the permit is for a corridor to develop a wind farm or for specific locations, and

what studies need to be completed including environmental and engineering. The

following discussion outlines these areas and highlights additional regulatory

requirements to keep in mind when planning a wind development project.

B. Local Land Use and Zoning Laws

Wind turbine installations are subject to local land use and zoning laws, and

before beginning the project planning, it is important to check what restrictions may

apply. Zoning regulations determine how a parcel of land can be used and the need for

local approval varies greatly throughout the country. While most cities and rural areas

have zoning laws, some areas have no zoning regulations whatsoever. In some instances,

wind turbines may be allowed in certain districts and prohibited in others, or they may

only be allowed in wind overlay zones.2 In most cases, local approval is necessary and

local support for the project is crucial for its success long term.

If the proposed wind energy project includes public lands, the project cost and

schedule will be greatly impacted. The process is more involved for obtaining permission

to build on public (state or federal) lands as compared to building on private lands.

Where a private property owner can sign an easement or lease agreement, the government

requires an in-depth permit process before the project can begin.

Building permits are issued after a thorough review of plans, including a site map,

drawn to scale that indicates property lines and residences and location of other buildings,

as well as topographic features, easements, and location and height of the proposed

2 Dan Chiras, A Practical Guide to Small-Scale Energy Production, Power from the Wind, Achieving Energy Independence 106 (New Society Publishers 2009). [hereinafter Chiras, Power from the Wind].

tower.3 Because the local approval process can be time consuming and the plans are

examined in great detail, the project manager should determine which local approvals are

needed and work with a knowledgeable legal counsel to navigate the process.

Zoning ordinances can be fairly complicated and cover a variety of issues from

visual impacts, shadow flicker, noise, ice throw, setbacks and decommissioning.4 Local

approvals might include Special Use Permits or Conditional Use Permits, site design and

environmental review, building permits, electrical permits, road use or improvement

permits and variances. Local wind ordinances normally include height restrictions and

setback requirements with the intent of lessening the visual impacts and protecting

adjacent property from equipment malfunctions or tower collapses. 5 Setback provisions

usually require placement of turbines to be a certain distance from property lines, streets,

public roads, residences, and overhead utility lines. Id. Some ordinances may require the

turbine tower and blades to be painted a neutral color, ground transmission lines, and

observe noise restrictions.6

C. Federal Aviation Administration Regulations

Wind projects should be evaluated to ensure compliance with federal lighting

requirements under the Federal Aviation Agency (FAA) guidelines. The FAA has

jurisdiction over any object that might impact flight patterns and compromise aircraft

safety,7 it specifically evaluates whether wind turbine structures constitute an aeronautical

hazard. 8 Wind turbines can reach heights over 400 feet which may pose risks of aircraft

collisions with blades, turbines, or towers and it could also degrade radar performance.9

The FAA requires a Notice of Proposed Construction for any structure higher than 200

feet above ground level.10 Once the Notice is received, the FAA begins a study to

consider the potential risks triggered by the proposed wind turbine installations. 3 Id. at 233.4 Patricia E. Salkin, Facility Siting and Permitting, in The Law of Clean Energy, Efficiency and Renewables 104 (Michael B. Gerrard, ed. American Bar Association 2011). [hereinafter Salkin, Facility Siting].5 Id. at 105.6 Id.7 See Riverbank, Local Government at 2. 8 See 14 C.F.R. §77.13 (standards and notification requirements for objects affecting navigable airspace.)9 See Salkin, Facility Siting at 372-373.

New FAA guidelines went into effect on February 1, 2007 under a new chapter,

Chapter 13 “Marking and Lighting Wind Turbine Farms.” The lighting

recommendations provide “day and night conspicuity and assist pilots in identifying and

avoiding these obstacles.” The new FAA standards require synchronized flashing red

lights to be mounted to the nacelle for turbines on the perimeter of the wind farm with

unlighted gaps of no more than one half mile. The intent of the FAA guidelines is to

ensure public safety by requiring that towers are painted and lit in a manner to make them

visible and therefore avoidable by aircraft. State and local regulations typically require

wind development projects of any size to comply with FAA regulations and submit proof

of compliance or non-applicability.

D. Cultural Resource Laws

The National Historic Preservation Act requires federal agencies to consider the

impacts of their “undertakings” on property listed as historic properties.11 An

“undertaking” is defined as “a project, activity, or program funded in whole or in part

under the direct or indirect jurisdiction of a Federal agency; those carried out with

Federal financial assistance; and those requiring a Federal permit, license or approval.”12

The federal agency involved will work with the State Historic Preservation Office to

identify key historic resources that are possible subject to the undertaking and determine

if the project will have a negative impact on the historic properties.13 If it is determined

that the project will have an adverse effect, it is necessary to consult with the State

Historic Preservation Office to identify agreed-upon mitigation measures to eliminated or

reduce the adverse effects.14

The Religious Freedom Restoration Act requires federal agencies to avoid

imposing any “substantial burden” on religious exercise unless the burden is supported by

10 Jessica A. Shoemaker, Farmers’ Guide to Wind Energy 4-39 (Karen R. Krub ed., Farmers’ Legal Action Group, Inc. 2007). [hereinafter Shoemaker, Farmers’ Guide].11 16 U.S.C. §470 et seq. (2014).12 36 C.F.R. §800.16(y) (2014).13 See Salkin, Facility Siting at 100.14 36 C.F.R. §800.1(a). (2014).

a compelling governmental interest and is the least restrictive means of furthering the

interest.15

E. Effects on Federal and State Development Contracts and Farm Programs

Project developers should take care to consider the impact of any wind project on

current or future eligibility of land for various farm programs. Federal farm programs

often include restrictions on land use and sometimes a violation of one of these rules can

mean a loss of benefits or serious financial consequences.16 The rules can be complicated

and may change from time to time, therefore it is advisable to consult with the Farm

Service Agency before siting wind facilities on any land that is enrolled in a federal farm

program.17

The Agricultural Act of 2014, also known as the 2014 Farm Bill was signed by

President Obama on Feb. 7, 2014. The Act repeals certain programs, continues some

programs and authorizes several new programs administered by the Farm Service Agency

(FSA). Most of these programs are authorized and funded through 2018.

Conservation Reserve Program (CRP) is a federal program to keep certain highly

erodible and environmentally sensitive farmland out of production for purposes of

environmental conservation.18 The program allows farmers to put wind turbines and

wind-monitoring devices on the enrolled land.19 Depending on the acreage affected, the

Farm Service Agency approval may be obtained at the county level or at the national

office level. The FSA officials will consider the environmental impact of the project

before granting any approval.

Conservation Security Program (CSP) is a voluntary federal program that

provides financial and technical assistance to farms for the purpose of conserving land

and natural resources.20 Farmland enrolled in the Program is restricted in use under

contract for conservation purposes in exchange for payments from the U.S. Department

15 42 U.S.C. §2000bb (2014).16 See Shoemaker, Farmers’ Guide at 5-21.17 Id.18 16 U.S.C. §3831 et seq. (2014); 7 C.F.R. pt 1410 et seq. (2014). 19 16 U.S.C. §3831 et seq. (2014); 7 C.F.R. pt 1410.63(c)(5) (2014). 20 16 U.S.C. §3838 et seq. (2014).

of Agriculture.21 Violation of the contract can result in termination which in addition to

loss of future payments, it could mean the landowner would be required to refund

payments already received. Wind projects are typically deemed an acceptable use of

enrolled land, but any proposed wind project should take into account such potential

effects on farm program income.

The Environmental Quality Incentives Program (EQIP) is another federal farm

program that provides farmers payments from the USDA in exchange for the farmer’s

agreement to restrict use of the enrolled land.22 If an installation of wind turbines

negatively impacts the purposes of the program, the USDA can terminate the contract and

require a certain refunded amount.23 Alternatively, the payments could be recalculated

and the contract can be modified through the Natural Resources Conservation Service

(NRCS) to allow the wind project to be constructed.

The Wildlife Habitat Incentives Program (WHIP) offers financial and technical

assistance to develop habitat for upland wildlife, wetland wildlife, threatened and

endangered species, fish or other types of wildlife.24 In exchange for payments, farmers

agree not to take any action on their property that would defeat the purpose of the

program. In pursuing a wind project, it is important to consider whether the action on the

land is potentially in violation of the WHIP agreement. Violations could reduce WHIP

payments and possible refunds of already received payments.25

The Farmland Protection Program is (FPP) provides money to private entities to

buy conservation easements on farmland or ranch land to protect it from being converted

to a non-agricultural use.26 Land in the FPP is subject to a restricted use easement and

depending on the parcel of land and a specific wind project, the development of the wind

facility may or may not be in violation of the particular FPP easement.27 If it appears a

21 See Shoemaker, Farmers’ Guide at 5-24. 22 16 U.S.C. §3839aa (2014).23 16 U.S.C. §3838b(4)(A)-(B)(2014).24 7 C.F.R. §636.1(a) (2014). 25 Natural Resources Conservation Service, Conservation Programs, Wildlife Habitat Incentive Program was not reauthorized in 2014 Farm Bill. NRCS will honor and continue to support fiscal year 2014 WHIP program contracts using the rules and policy that was in effect at the time of contract obligations.26 7 C.F.R. §1491.4(a) (2014). 27 See Shoemaker, Farmers’ Guide at 5-25.

proposed project will be in violation of the easement, the farmer may request a

modification from the USDA.28

F. Federal Lightning and Signal Interference Laws

Wind energy systems are usually built in less populated rural areas and on higher

elevations to take advantage of the native wind resource. In many of these same areas,

there is often a television, point-to-point microwave, telecommunications or radio station

already in operation. Wind turbines, like other large metal structures on the landscape

can interfere with radar or communication standards and be disruptive to existing

microwave systems and broadcast stations. Commercial-scale turbines have the potential

to block or reflect signals for television reception and they can interfere with microwave

paths by physically blocking the line of sight between two microwave transmitters.29

Public safety mandates that wind projects adhere to both FAA and Federal

Communications Commission (FCC) regulations and guidelines to avoid or mitigate

signal interference.30 When radio signal coverage is altered from its FCC prescribed

pattern, the station can be fined by the FCC, it can lose radio audience and become

subject to lawsuits. Developers should take proactive steps to identify and avoid radio

frequency interference. When the radio signal pattern needs to be preserved, a developer

can restore lost reception by building a tower with translators to serve the area or “de-

tune” the tower so it becomes invisible to the radio antenna. 31

Some states are sensitive to the potential disruption and sometimes local planning

authorities regulate the interference to radio signal transmissions by requiring wind

developers to notify area telecommunications operators before installation. It is important

to prevent legal and regulatory problems however, based on the legal precedent on this

28 7 C.F.R. §1491.30 (2014). 29 Leslie E. Polisky, Identifying and Avoiding Radio Frequency Interference for Wind Turbine Facilities 1 (Andrew Corporation 2005).30 U.S. Dept. of Energy, New England Wind Forum: Radar, TV, and Radio Signal Interference (last updated Oct. 10, 2011).

31 Wind Turbines and Interference to Broadcast Signals (Broadcast Wind, April 19, 2012).

issue, it is unlikely a court will find a wind facility’s interference to constitute a private

nuisance.32 Illinois, Massachusetts, and New Mexico have held that the landowner’s

interest to build on one’s land outweighs the right of a neighbor to television or radio

reception. 33

G. Evolving Environmental Concerns: Wildlife Impact, Necessary Studies, Etc.

National Environmental Protection Act

Wind energy development has both positive and negative environmental impacts.

On the positive side, wind energy is generally regarded as environmentally friendly,

especially when the environmental effects of emissions from large-scale conventional

electrical generation power plants are considered. One of the objectives of wind energy

systems is to maximize the positive impacts, and simultaneously minimize the negative

aspects. In addition to obtaining the aforementioned government approvals, wind project

developers will be required by local, state, and federal authorities to satisfy additional

requirements to ensure the positive impacts are maximized and the negative aspects are

minimized.

If a wind project is located on federal land or requires federal agency approval, it

must comply with the National Environmental Policy Act (NEPA).34 For example, a

NEPA review may be triggered if there are federal loan guarantees, if a project requires

an easement or lease on federally owned land or managed land, or interconnections to

federal transmission lines, it requires a NEPA review.35

If NEPA review is required, a lead federal agency is appointed to oversee the

NEPA process and coordinate other agencies to conduct the review. The first level of

review requires the lead agency to perform an Environmental Assessment (EA) to

determine whether the impacts of the proposed project are significant. This process can

32 See Shoemaker, Farmers’ Guide at 5-14.33 See Public Serv. Co. v. Catron, 646 P.2d 561, 564-65 (N.M. 1982), People ex rel. Hoogasian v. Sears, Roebuck & Co., 287 N.E.2d 677, 679-80 (Ill. 1972); Richmond Bros., Inc. v. Hagemann, 268 N.E. 680, 682-683 (Mass. 1971). 34 42 U.S.C. §§4321 to 4347 (2014); 40 C.F.R. §1500.3 (2014).35 See Shoemaker, Farmers’ Guide at 4-35

take 2 to 6 months.36 If the agency issues a “Finding of No Significant Impact” the

NEPA review process is complete.37 If the agency’s EA review results in a determination

that the project could have significant environmental impacts, the agency will prepare a

full Environmental Impact Statement, a process which can take over a year.38

The agency’s EIS analysis will include the direct and indirect environmental

consequences of the proposed project and an assessment of alternatives (including the no-

action alternative) and mitigation measures.39 NEPA and state-environmental review

statutes solicit public input in the approval process. The agency will review the solicited

public comments and provide response. A final decision is made as to whether to permit

the proposed project or select an alternative and a detailed explanation is provided to

support the decision. Generally, the NEPA process for wind projects has resulted in no

significant impact findings. The agency determination is appealable to the courts

however, the decision will generally be upheld if it is reasonable and supported by the

evidence.40

Activities Affecting Wetlands and Bodies of Water

Most wind farms are sited on high ground, however the land preparation, pre-

construction, construction and operational activities needed to build the facility may

affect nearby wetlands or bodies of water. Federal and state laws protect waters and

adjacent under their jurisdiction from disturbances and potential damage. Violation of

these requirements can lead to hefty penalties.

The U.S. Army Corps of Engineers is the agency responsible for wetland and

navigable water regulation. Under Section 404 of the federal Clean Water Act, a permit

must be obtained from the Corps before construction of any structure begins which may

36 Timothy L. McMahan, Siting and Permitting Wind Projects 3-3 from The Law of Wind (Stoel Rives, LLP, 3d ed. 2006).37 40 C.F.R. §1508.13 (2014).38 Timothy L. McMahan, Siting and Permitting Wind Projects 3-3 from The Law of Wind (Stoel Rives, LLP, 3d ed. 2006).39 40 C.F.R. §1508.25 (2014) See also 40 C.F.R. §1502.1-1502.25 (2014) (regulations pertaining to EISs).40 Alliance to Protect Nantucket Sound, Inc. v. U.S. Dep’t of the Army, 398 F.3d 105 (1st Cir. 2005) (upholding the Army Corps’s environmental assessment and finding of no significant impacts for a data tower for Cape Wind).

“discharge” into waters of the United States, including wetlands.41 This may include

dredging, draining or filling, grading or pushing material around within a wetland.

Water protection laws for bodies of water or navigable waters may be triggered in

a wind project’s construction phase when building access roads or power lines that will

cross a stream or river. Section 10 gives the Corps authority to issue permits and approve

applications to build any structure in or over navigable water or the project results in the

deposit of materials in a body of water. “Discharge” activities mirror those identified as

prohibited under Section 404.42

Under Section 401 of the Clean Water Act, states and tribes are authorized to set

water quality standards and certification requirements. This allows the State or tribe to

become the processing agency for Section 404 permits and review projects that might

result in discharge to State or tribal waters or wetlands.43

Protected Species and Wildlife Impacts

Wind developers should be mindful when placing wind farms in undisturbed

areas or habitats of endangered species. Citizen groups and opponents of wind farms have

challenged commercial wind farms citing studies of increased mortality among birds and

bats caused by turbines. While the evidence is debated and not site specific, it is

important to recognize the concern persists as wind development becomes more

widespread.

a) Endangered Species Act

The Endangered Species Act (ESA) was enacted in 1973, and it prohibits the

“taking” of a species listed as endangered except if taken pursuant to an incidental taking

permit. The term “take” means to “harass, harm, pursue, hunt, shoot, wound, kill, trap,

capture, or collect, or attempt to engage in any such conduct.”44 The ESA also provides

that an incidental take permit may be obtained if the taking is incidental to an otherwise

lawful activity and a conservation or mitigation plan is submitted with the application and

41 33 U.S.C. §1344 (2014). 42 33 U.S.C. §426g (2014).43 33 U.S.C. §1341 (2014).44 16 U.S.C. §1538(a)(1) (2014),16 U.S.C. §1532(19) (2014). The term can also include habitat modification.

reasons showing why there are no alternative means and the mitigation measures are

appropriate.45

b) Migratory Bird Treaty Act

The Migratory Bird Treaty Act (MBTA) covers over 800 species of migratory

birds, including may common birds like Canadian geese, barn swallows, and prairie

chickens.46 The MBTA prohibits the taking of covered species, but unlike the ESA, there

is no process to obtain an incidental take permit. Regulations are promulgated and

enforced by the U.S. Fish and Wildlife Service which issued voluntary guidelines in 2010

covering bats and other species of migratory birds.47

H. Safety Regulations

Electrical permits will be required to ensure the system is installed safely. Local

officials use the National Electric Code to regulate the installation of all wiring and

associated hardware, such as inverters.48 Often the interconnecting utility will require

submission of a single-line diagram of the system showing all electrical components. Id.

Whenever electrical equipment is in operation, the system should be NEC compliant to

protect against shocks and fires caused by electricity.

Some local governments have ordinances that require all access to ladders,

generators, fans and other maintenance areas be properly secured. These provisions are

intended to keep the areas around the wind turbines secure to prevent access by children

or unauthorized people.49

The most common safety regulation requires braking systems to be installed in

wind turbines to ensure they can be shut down in extreme winds or during emergencies to

prevent accidents due to excess blade speed.50

45 16 U.S.C. §1539 (2014).46 16 U.S.C. §§703-712 (2014). Additional protections are also contained in the Bald and Golden Eagle Protection Act, 16 U.S.C. §668 (2014).47 Report of the U.S. Fish and Wildlife Service Wind Turbine Guidelines Advisory Committee (Mar. 4, 2010).48 See Chiras, Power from the Wind at 235.49 Riverbank, Local Government at 9 citing Grand Prairie, Texas. 50 Riverbank, Local Government at 10 citing Maine.

Project managers should consider obtaining liability insurance for the wind

energy facility and maintain a policy that covers bodily injury and property damage with

limits in an amount commensurate with the scope and scale of the facility. Some rural

communities require a minimum amount of liability insurance in case of personal injury

caused by the wind turbines.51

I. Other Important Rules and Regulations

In addition to the above site permit approvals, a wind project may be subject to

another permit process to determine the need for the commercial wind project. Some

states have a Certificate of Need requirement in which the wind project must obtain a

Certificate of Need from the Public Utilities Commission. The process may include a

hearing and will certainly require an applicant to provide general information about the

project, alternatives to the proposed facility, detailed information about cost, service life,

availability, effect on rates and environmental data.52 The applicant generally must notify

the interested governmental agencies and hold a public hearing.

Siting and permitting wind energy project entail a variety of governmental

environmental and land use reviews. The level of government involved and the agencies

engaged in the process will depend on the location and size of the project. Public policy

generally supports siting and permitting of these projects, but the time tables should take

into account the time consuming reviews needed for regulatory approval.

51 Riverbank, Local Government at 10.52 See Shoemaker, Farmers’ Guide at 4-44.