After an eight-year long process, the Bureau of Land Management (“BLM”) recently released the first phase in a plan to encourage renewable energy development in the California desert. In September, the BLM approved the federal portion of the Desert Renewable Energy Conservation Plan (“DRECP”), a landscape-level renewable energy and conservation plan that affects 10.8 million acres of public lands in the California desert, and will potentially impact renewable energy development on private lands as well.
Approval of the DRECP marks a compromise in a long struggle between competing policies affecting the California desert. Many view the region as critical to developing renewable energy projects on a scale large enough to meet California’s ambitious greenhouse gas reduction goals. Environmental groups, however, have questioned the true impact of these projects on sensitive species and their habitat. This tension between renewable energy and conservation goals is nothing new, but the DRECP finally sets the tone for a path forward in the California desert.
The impetus for change
Long viewed as ideal for large-scale renewable energy projects, the California desert has been a focal point for achieving both federal and state greenhouse gas reduction policies.
On the federal front, President Obama’s 2013 Climate Action Plan has prompted federal land management agencies to promote policies that reduce greenhouse gas emissions. Promoting renewable energy development on public lands is a key piece of this plan. As of April 2016, the BLM had issued authorizations to develop 26,795 acres of public land for wind projects and 22,758 acres of public land for solar projects in the California desert since 2003.
California state policies further augment the demand for renewable energy development in the California desert, including California’s goal to cut greenhouse gas emissions to 40 percent below 1990 levels, and to require a 50 percent Renewables Portfolio Standard, all by the year 2030.
Many environmental groups, however, argued that this development in the California desert comes at too high of a cost. Though it is an abundant source for renewable energy, the California desert is also home to many sensitive species and their habitat. These groups view the California desert as one of the last places where these species can be adequately protected from the impact of residential, industrial, renewable energy, and other types of development in Southern California.
DRECP takes shape
In order to resolve this clash between competing policies (ones that protect sensitive species and simultaneously encourage renewable energy development) four federal and state agencies initiated the DRECP in 2008. These agencies include the BLM, California Energy Commission, California Department of Fish and Wildlife (“CDFW”), and U.S. Fish and Wildlife Service. Originally, the DRECP addressed both public and private lands, but after too much delay in the process, the agencies decided to move forward with a phased approach in March 2015. The first phase of the DRECP focuses on management actions on BLM lands, while Phase II will address state and private lands.
Winners and losers
Although the DRECP has been touted by some as playing an essential role in meeting federal and state climate change and renewable energy goals, Phase I has come under fire from industry advocates claiming it focuses too much on conservation. Notably, Phase I of the DRECP prioritizes renewable energy development on “Development Focus Areas” that include approximately 388,000 acres, or less than four percent of the public lands, affected by the decision. Of the remaining lands, approximately 93 percent (10.1 million acres) have been set aside as BLM Conservation Areas or Recreation Areas. Within these areas, the BLM will prohibit or significantly restrict renewable energy development.
In tandem with Phase I of the DRECP, the BLM is also expected to release a new rule to streamline the approval process for renewable energy projects on public lands, including those projects within the Development Focus Areas under the DRECP. First proposed in 2011, the proposed rule would implement competitive leasing processes and other developer incentives for wind and solar projects located within “designated leasing areas.”
Projects located on designated leasing areas and selected through the competitive leasing process would be eligible for offsets (limited to 20% of the highest bid) if the developer meets certain criteria set forth in the bidding process. Other incentives include reduced application fees, streamlined environmental review, and more favorable lease terms.
Like the DRECP, however, the BLM’s proposed wind and solar leasing rule has received mixed industry response. Some developers have expressed concern that competitive leasing procedures will raise costs of developing projects on public lands, and that processes aimed at streamlining permitting and review, will not offset these costs.
Looking to the future
With much of the public lands in the California desert off-limits to renewable energy, developers will look to private lands for development opportunities. These opportunities will be affected by Phase II of the DRECP. Under Phase II, the State of California and seven California counties (Imperial, Inyo, Kern, Los Angeles, Riverside, San Bernardino, and San Diego) will coordinate with the federal agencies to revise local and state policies for renewable energy development. A significant component of Phase II may include a Natural Community Conservation Plan (“NCCP”) program to allow CDFW to issue take authorizations for species protected by the California Endangered Species Act. Further, Phase II calls for counties to better align their local land use policies with Phase I of the DRECP to promote renewable energy development.
Similar to Phase I of the DRECP, these two components will continue to clash as the State and counties determine how to promote renewable energy development on private land while protecting sensitive species.
Kate D’Ambrosio and Michael Sherman are attorneys at Stoel Rives LLP, where they practice in the area of renewable energy project financing and development.
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