Using a trial-based approach to improve a project’s chances before state siting boards.
Barry Needleman is a partner in the environmental department at the McLane law firm, and Vincent Dick is senior v.p. and energy markets director of national consulting firm Haley and Aldrich.
In some states, obtaining approvals to construct or upgrade large energy projects often means engaging in a state siting board process. The jurisdiction of these siting boards can cover significant transmission line construction and upgrades, construction of new electric generation facilities, and large additions to existing facilities. Many boards employ some type of integrated, centralized review that can provide a substantial benefit to developers over piecemeal permitting, primarily through the consolidation and streamlining of multiple necessary approvals. Conversely, these proceedings also can create an array of challenges for applicants that they don’t normally encounter in a smaller, non-integrated permit process.
Sophisticated applicants recognize this dichotomy and understand that siting board matters are more like civil court trials than typical permit exercises. Regardless of whether a state uses a fully centralized or only partially centralized siting approach, applicants who embrace the trial paradigm and prepare themselves accordingly are much more likely to get their applications approved and upheld in the event they’re appealed.
Where to Start?
The most successful siting applications begin with a comprehensive plan. The plan functions as a blueprint for how the project will be managed, from preparation and submission of the detailed application, through any discovery exchanges, and culminating with the final permit hearings—i.e., the trial. It begins by identifying all applicable requirements governing the project, including all necessary permits issued by state agencies. As part of their application submittals, many state and federal agencies require that an applicant supply a comprehensive list of necessary approvals anyway, so creating this isn’t just good for planning, but it also serves an applicant’s future regulatory submittal requirements.
Applicable requirements also often include things not covered by state agencies, and are therefore solely within the purview of a siting board. For example, Maine and New Hampshire require applicants to show that they have the financial capability to construct, operate, and maintain the project. In some jurisdictions, like Oregon and Massachusetts, the applicant must address the need for the proposed project. In addition, if any necessary approvals are beyond siting board jurisdiction, they need to be identified and pursued on separate tracks, while applicants remain mindful that portions of the siting board application ultimately might be dependent upon or interrelated with those other approvals. Examples include interconnection studies from entities like an ISO or RTO, and federal approvals such as an FAA certificate for a tall exhaust stack. Local approvals, such as site plan and zoning review, also could be involved and tend to fall into a separate category that merits closer attention.
All energy facility siting projects have important local dimensions. Experienced energy developers know that there’s a direct correlation between constructive engagement with local officials and a project’s ultimate success. Translating that understanding into the siting board process is essential. Some state siting boards, such as the New Hampshire Site Evaluation Committee, preempt local control. In such cases, local zoning and planning approvals are subsumed within the state siting process. Understanding this dynamic from the outset is important because applicants will have to consider whether any of their actions might waive preemption, and whether that’s a desirable outcome. Applicants also may choose to incorporate local standards at the design level while preserving state-level preemption. While siting boards may preempt local control, they’re often very sensitive to the concerns of host communities. Applicants who fail to appreciate that point early in the process are destined to make their own lives more difficult.
The typical approach in cases where there’s some type of preemptive effect would be to append to the final siting board approval a stipulation negotiated between the project proponent and the host community, which shows how local conditions have been addressed by the siting board process that otherwise would have been handled in the normal local approval process. The conditions become an enforceable part of the final approval. In such cases, a core element of the trial-based siting strategy would be to develop a comprehensive approach to address all the issues that might arise in such a procedural context, and consider how the applicant will handle those issues and meet its burden of proof on all of the substantive points.
Focus on Proof
One common theme in siting proceedings is that the applicant bears the burden of proof. Simply stated, the applicant must demonstrate by a preponderance of the evidence that it has satisfied each and every requirement necessary to receive the overall approval. A high batting average isn’t good enough in this game; project proponents need to bat 1,000 or they won’t get their approval. For example, in late 2012, a proposed wind park in Maine was denied siting approval because it failed to meet just one of multiple requirements; namely, the siting authority ruled that the proposal “would have an unreasonable adverse effect on the existing uses and scenic character” of the nearby area.
One effective approach for ensuring nothing is overlooked is to include in the initial trial plan a matrix of all the applicable requirements coupled with bullet points specifying the precise evidence needed to meet the burden of proof for each one. The plan also might include identification of the evidence that will be used and properly introduced into the record regarding each requirement.
For example, a new gas-fired power plant might be subject to noise limitations at its property boundary. These standards might derive from local ordinances, or state law such as under the Maine Site Law or the Oregon Department of Environmental Quality Noise Control Regulations. In such circumstances, applicants might identify a noise expert who will prepare a model of all facility noise sources, potentially affected noise sensitive areas, and mitigation measures that could be required. Some jurisdictions also require noise monitoring during or after construction to verify effectiveness of control measures or to trigger the addition of a greater level of noise control if the initial design doesn’t prove sufficient. The model, together with expert testimony explaining and supporting the model, might serve as the evidence used to meet the burden of proof for this requirement, particularly if some conditions will survive beyond the initial permitting to require monitoring during or after construction. In this circumstance, an expert would be expected to show that noise controls can effectively be supplemented after construction if the initial measures aren’t adequate.
These situations also create efficiency opportunities, such as when parallel proceedings require expert services. For example, a parallel FERC proceeding might require a designated subject expert to deal with noise issues. Applicants might want to plan accordingly so a single person can handle both proceedings and avoid duplication of work.
Applicants also might want to consider variables affecting each specific issue. Drawing again on the noise example, such variables might include unexpectedly stringent noise limitations, or different limitations between day and night-time operation. Applicants should be mindful that mere compliance with standards often isn’t sufficient, as siting boards often seek to ensure that the maximum level of practicably achievable mitigation is at least considered. The trial plan should address how the project will deal with such contingencies from an evidentiary standpoint. The process is then replicated for each applicable requirement.
This type of contingency planning should also consider the potential influence of opposition to a project. For example, it’s possible that a smaller governmental entity that doesn’t have primary authority over siting approval might try enacting a local ordinance that imposes setbacks, height restrictions, restrictive noise limits, or other critical path controls on certain facilities in order to inhibit or prevent advancement of the project. The comprehensive list described at the outset of the process, and engagement on the local level, will help to signal whether the potential for this kind of issue exists. Planning for such an event and envisioning contingency responses helps avoid missteps or delays in the project. The end product is often a very detailed matrix that not only serves as the general outline for preparation of the siting board application, but it also evolves into the trial plan that guides the overall project through the entire process with specific, well-researched and considered strategies for addressing anticipated points of contention along the way.
Guard Against Appeal
Obtaining all necessary approvals for a large energy project almost always demands a significant commitment of time and resources. Why undertake such an effort without doing everything possible to ensure a favorable outcome isn’t overturned on appeal? A trial-based strategy will help insulate the project against an adverse appeal outcome.
An appellate body might review legal determinations of the siting board as well as the sufficiency of the evidence supporting aspects of the siting board’s decision. For example, in 2000, interveners appealed a siting board decision authorizing the construction and operation of a 720-MW natural gas-fired cogeneration facility in Londonderry, N.H. Appellants argued, among other things, that the decision was defective because the siting board failed to impose a monitoring requirement for potential fogging and icing. In fact, the applicant had foreseen such a potential contention and addressed it very carefully during the siting board proceeding. The state Supreme Court ultimately rejected the appellant’s argument, relying on the solid evidentiary record developed before the siting board, which proved by a preponderance of the evidence that there would be no ground level fogging or icing. The facility ultimately was built and is operating today.
A trial-based approach to siting proceedings compels applicants to think carefully throughout the process about building a record designed not only to secure approval, but also to provide maximum protection in case of appeal. This means ensuring that substantial evidence is developed with respect to every aspect of the applicants’ burden of proof, and that all such evidence is properly introduced into the record. Finally, it also requires a recognition that in these matters, where the formal rules of evidence often don’t apply, the record can expand in unexpected ways. Statements to the press, emails, and statements in blogs or on Twitter, to name a few examples, all could become part of the record. Care must therefore be exercised from the outset to be certain all team members understand how the record is developed in these cases, and that it’s done in a deliberate, careful manner.
Great Witnesses Make The Case
In the trial-based approach, applicants need to distinguish between the roles played by expert consultants and expert witnesses. Large siting endeavors almost always require the services of teams of expert consultants, such as air permit engineers, wetlands scientists, visual modelers, wildlife biologists, foresters, and many others. Even within specific disciplines, such as air permitting for example, multiple technical consultants might be needed. However, only a small portion of these team members ultimately will serve as expert witnesses during the various hearings and for regulatory submittals that comprise the project’s evidentiary record.
The importance of the witnesses who support the application can’t be overstated. They bring the application to life and are the vehicles through which the evidence is introduced that applicants will use to sustain their burden of proof. The witness team must, collectively, cover every aspect of the application. In typical proceedings, applicants will call on their witnesses multiple times, from pre-application interactions with agency personnel and perhaps the media, to post-application presentations at public informational hearings, discovery sessions, and finally, to offer sworn testimony at the final hearings. Choosing very good witnesses and then properly preparing them often makes or breaks an application.
Effective witnesses are strong communicators with deep substantive knowledge in their areas of expertise. They understand that siting boards want relevant information to be presented objectively, in a concise, readily digestible format. The witness team often consists of company representatives and outside consultants. The company witnesses typically testify about issues like the applicant’s technical, managerial, and financial capabilities. Outside consultants often discuss specific technical issues such as air, water, and waste compliance, as well as historic preservation, wetlands, wildlife, and natural resource impacts, to name a few. Applicants need to strike a balance in these proceedings so they have the right array of witnesses to cover all relevant topics without bogging the process down by offering too many witnesses.
Thorough witness preparation is essential. The starting point is intense substantive preparation coupled with rigorous work on basic witness skills, like the importance of establishing and maintaining credibility, or how to deal with leading and confusing questions. But basic preparation isn’t sufficient; it must go further so that witnesses are equipped to manage the unique aspects of energy facility siting proceedings.
Many of these proceedings demand that witnesses present in a number of different forums—e.g., public informational sessions, technical sessions, and the final hearings. Witnesses have to be trained to adapt to these different playing fields and adjust their presentations to accommodate the unique circumstances of each one. The dynamics of a public informational hearing can vary substantially from those of the final hearing. In each case, the witness might be confronted with the same substantive question such as, for example, being asked to explain the air emission impacts of a proposed new wood-fired power plant. In one case, the witness might be asked to address this question from an inquisitive neighbor at an informational hearing. That same witness also might have to answer the same question from a project opponent’s attorney during cross examination at the final hearing. The core substance of the answer won’t vary, but how the witness presents that information, including the level of detail and how they deal with the motivations of the questioners, could vary considerably. Any answer to the same question in these different circumstances must maintain consistency despite possible changes in audience, detail, or venue.
Because the rules of evidence often don’t apply, testimony in these matters is generally less formal and witnesses have greater latitude in making their presentations. For example, in proceedings before the Massachusetts Energy Facilities Siting Board, if a witness can’t answer a question during cross examination, they might be required to provide a written answer to the inquiry at a later time. Witnesses must be trained to understand this different dynamic and take advantage of the opportunity to defer answers rather than risk speculating, thereby creating a poor record. In other circumstances, witnesses might be presented as panels and so they need to be oriented to the special dynamics associated with that format.
Witnesses also need to understand that these proceedings aren’t a Law and Order episode; the ability of their attorneys to protect them through objections is generally quite limited. Moreover, the most successful witness presentations are often the ones where attorneys never have to raise a single objection. Ultimately, intense preparation is really the best way to protect a witness. If a witness walks into a proceeding feeling as if there’s no question he or she can’t answer, and then walks out feeling as though the preparation was far worse than the actual examination, that’s a great outcome.
Siting board proceedings vary from typical permit proceedings based on the role interveners might play. In typical environmental permit approvals, adverse parties participate primarily by filing comments. In siting proceedings, the opportunity for participation can be much greater and applicants need to plan accordingly. Applicants first need to assess the motivation of interveners: are they appearing in support of or adverse to the project? Applicants often have limited success opposing adverse interveners. On some occasions siting boards have declined to permit interveners to participate where they had no clear, substantive interest in the proceeding. In other circumstances, the scope of intervention has been narrowed and limited only to particular issues. Siting boards might require interveners to be grouped together and function as a single entity based on their specific interests. From an applicant’s standpoint, and siting board’s standpoint as well, ensuring that interveners don’t interfere with the orderly conduct of the proceedings is really the primary issue. Dealing with that issue might be less of a concern at the point interveners seek admission to the process and more of a concern once they’re a party to the proceedings.
A common occurrence in these proceedings is for interveners to raise unusual issues at the cutting edge of science. For example, about 12 years ago a new gas-fired cogeneration facility seeking siting board approval proposed to use treated water from the municipal publicly owned treatment works for cooling purposes. Interveners in that matter raised concerns about the airborne pathogens being present in cooling tower drift despite the record containing significant evidence demonstrating that was highly unlikely to be an issue. After reviewing the presentation of a substantial amount of evidence, the siting board determined it wasn’t an issue of concern.
In a recent wind project siting proceeding in New Hampshire, opponents argued that the sound from the turbines might cause “wind turbine syndrome” or vibroacoustic disease. They relied on citations to scientific literature and witness testimony to support their position. The applicant introduced evidence rebutting their contentions. The siting board concluded that “the existence of Wind Turbine Syndrome has not been scientifically established” and that no specific evidence connected the symptoms identified with the characteristics of the proposed project. Likewise, the siting board also rejected the arguments concerning vibroacoustic disease, noting that malady is only associated with sound levels much higher than would be produced by the proposed project.
In a New York matter, interveners in a compressor station siting opposed the project based on the concern that it would receive Marcellus Shale gas, which could have elevated levels of naturally occurring radioactive materials (NORM). They argued that the emissions would lead to air dispersion of the NORMs on neighboring properties. The project proponent successfully rebutted these claims by providing evidence—mostly from EPA and DOE literature—showing that the levels of NORMs in interstate pipeline quality gas is no higher with Marcellus Shale gas in the mix.
In each case, these issues consumed a substantial amount of time and resources. Applicants frequently felt that consumption of such resources was disproportionate to the concerns being raised. While that might be true, siting boards generally adopt a conservative approach while evaluating and ruling on such issues. Applicants are therefore generally best served by addressing these matters head-on, and not trying to prevail by being dismissive. Anticipating the issue, marshaling the evidence necessary to rebut it, and ensuring the applicant carries its burden of proof is the often the best approach.
As our population expands, the demand for new energy infrastructure will also keep pace. Ironically however, it likely will get increasingly difficult to site that infrastructure, because the growing population is competing for the same land, resources, and landscape views as these new and upgraded projects. NIMBY (“not in my back yard”) and BANANA (“build absolutely nothing anywhere near anything”) will become the increasingly prevalent attitudes that motive people to oppose the siting of projects in their communities.
The situation isn’t made easier by the fact that ours is a litigious society. Given that potent set of factors, a trial-based approach perhaps offers the best path available to developers to successfully site new and expanded energy infrastructure.