Legal Issues Confronting the Development of
Wind Power
Joe Nelson
Van Ness Feldman, P.C.
November 9, 2004
1
Increasing Trends for Development of
Wind Power
 Total
installed U.S. wind energy capacity is
approximately 6,374 MW (Jan. 2004)
 Approximately 5,450
MW of wind
generation capacity has been proposed for
construction (Aug. 2004)
2
Factors Behind Increased
Wind Energy Production

Production Tax Credit extension signed into law in
October 2004
– 1.5 cents per KWH (indexed for inflation) for facilities
placed in service after 1993 and before 2006.

State Renewable Portfolio Standards, Goals or
Mandates
– States with RPS programs include: Arizona, California,
Connecticut, Hawaii, Illinois, Iowa, Maine,
Massachusetts, Minnesota, Nevada, New Jersey, New
Mexico, New York, Pennsylvania, Texas and Wisconsin
– Colorado RPS ballot initiative passed in November
election requiring utility resource mix to meet a 3% RPS
by 2007, 6% by 2011 and 10% by 2015
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Legal Considerations in
Wind Energy Development

State & Local Siting Requirements
– Environmental review/compliance addressed in siting

Federal Environmental Laws Implicated by Wind Energy
Projects
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National Environmental Policy Act
Endangered Species Act
Migratory Bird Treaty Act
Bald and Golden Eagle Protection Act
Clean Water Act
National Historical Preservation Act
Rivers and Harbors Act
Coastal Zone Management Act
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Legal Considerations in
Wind Energy Development

Aviation Safety
– FAA No-Hazard Determination

Wind Energy Development on Federal Lands
– BLM Proposed Wind Energy Development Program

Transmission System & Markets Integration
– Transmission Interconnection Standards
– Treatment of wind energy projects in ISO/RTO Markets
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State/Local Siting Requirements

Majority of States have generic siting
requirements for electric generation facilities
– Predominant siting mechanism is for a Certificate of
Public Convenience and Necessity (or equivalent)
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Most States have capacity thresholds (e.g. 80 MW in New
York) that allow for expedited siting review for smaller
projects
Applicability of the State siting requirements may hinge on
scope of the statutory definition of “electric generation facility”
– Minnesota and Oregon have enacted specific siting
requirements for wind energy projects
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
M.S.A. §116C.692
O.R.S. §469.320)
Coastal zones and other sensitive areas may have
additional siting review requirements
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State/Local Siting Requirements

Key Issues
– Applicability of State Siting Statute

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Most State siting statutes do not specifically recognize wind
generation
Definition of “electric generation facility” or equivalent for
purposes of siting requirements varies
– Local Law Preemption

Ability of State permitting/siting approval to preempt local
siting requirements often critical
– Timing of Review
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Federal Environmental Statutes
 Potential
Issues
– Avian mortality from wind turbines generally
considered to be less than communication structures
and other stationary structures
– Facility placement and noise impacts viewed as
potential disruptions for wildlife migration and foraging
patterns
– Potential for construction-related impacts from road
access, heavy equipment and habitat disruption
– Visual and cultural impacts can be significant concerns
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Federal Environmental Statutes

National Environmental Policy Act
– Initial Environmental Assessment (EA) takes “hard look” at the
potential effects of an action to determine whether they are
“significant”
– Environmental Impact Statement (EIS) required for federal actions
significant affecting the quality of the human environment.
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Requires extensive scoping, studies, public hearing/comments, and
alternatives analysis
Record of Decision must “state whether all practicable means to avoid
or reduce environmental harm from the alternative selected have been
adopted and, if not, why they were not.”
Adoption of mitigation is limited by permitting agency’s organic
statutory authority
– “Mitigated EA/FONSI” is alternative to full EIS

Relies upon mitigation measures to reduce adverse effects below
significant levels
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Federal Environmental Statutes

Endangered Species Act (16 U.S.C. §§ 1531-1544)
– Federal agency actions reviewing or permitting a wind
energy project may trigger review under ESA Section
7(a)(2) with respect to whether project operations will
jeopardize the continued existence of a federally listed
species or result in adverse modification of critical
habitat.

Ninth Circuit’s recent decision in Gifford Pinchot Task Force v.
U.S. Fish and Wildlife Service, 378 F.3d 1059 (9th Cir. 2004)
could make the “adverse modification” element of Section 7
consultations more stringent.
– Turbine operations may pose risk of “take” liability under
ESA Section 9

Incidental take authorization gained either through a Section 7
consultation or development and approval of a habitat
conservation plan under Section 10(a)(1)
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Federal Environmental Statutes

Rivers and Harbors Act (33 U.S.C. § §401 et seq.)
– Prevents the unauthorized obstruction or alteration of the navigable
waters of the United States
– Section 10 (33 U.S.C. § 403) requires review by the U.S. Army Corps
of Engineers to address any construction, excavation or deposition of
materials in navigable waters or any work that affects the course,
location, condition or capacity of navigable waters
– U.S. Commission on Ocean Policy recently criticized the Section 10
review process as inadequate for purpose of addressing wind energy
projects on the OCS
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Section 10 does not provide a basis from which to grant leases or
exclusive rights to use and occupy space on the OCS
No comprehensive planning guidelines for off-shore wind
No ability for federal government to assess fees or royalties of placement
of a project on the OCS.
– There are ongoing Congressional efforts to authorize royalty fee
assessments for wind and other off-shore energy projects.)
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Federal Environmental Statutes

Coastal Zone Management Act (16 U.S.C. § 1451 et
seq)
– Covers on and off-shore facilities within 3 miles of the
coastline (16 U.S.C. §1453)
– Review (by State coastal authorities) required to
determine consistency of project with a federally
approved coastal management plan.
– Effect of a wind generation project on shipping lanes,
fishing grounds and military zones may be implicated.
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Federal Environmental Statutes

Migratory Bird Treaty Act (16 U.S.C. §§ 703-712)
& Bald and Golden Eagle Protection Act (16
U.S.C. §§ 668-668d)
– Migratory Bird Treaty Act is a strict liability statute that provides
that it is unlawful “at any time, by any means, or in any manner to”
pursue, hunt, take, capture, kill, possess, offer for sale, sell,
purchase, ship, export, import or transport a migratory bid species.
– 1972 amendment of MBTA included bald eagles and other birds of
prey into definition of migratory birds
– Bald and Golden Eagle Protection Act provide additional legal
protection with penalties of up to $250,000 and 2 years
imprisonment for felony
– U.S. Fish & Wildlife enforcement policy “focuses on those
individuals, companies, or agencies that take migratory birds with
disregard for their actions and the law”
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Federal Environmental Statutes

Clean Water Act
– Construction and operation of wind energy projects
may trigger permitting requirements under § 401-water
quality certification (33 U.S.C. §1341), § 402-point
source discharges (33 U.S.C. §1342) or §404-discharge
of dredged or fill material (33 U.S.C. §1344)

National Historical Preservation Act (16 U.S.C. §§
470-470b, 470c-470n)
– Protects significant historical features (buildings,
objects and sites)
– Typically functions in conjunction with NEPA review
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Aviation Safety

Federal Aviation Administration Review (14 C.F.R.
Part 77)
– Applies to facilities with heights over 200 feet
– Determination required that facility will not be a hazard
to aviation
– Facilities may be required to install aircraft warning
lights and/or markings
– FAA is reportedly developing draft report on
obstruction lighting for wind turbines.
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Federal Policies on Environmental
Impacts of Wind Energy Development

U.S. Fish & Wildlife Service (FWS) has issued Interim Guidelines to
Avoid and Minimize Wildlife Impacts From Wind Turbines
– Issued on May 13, 2003 with planned two-year evaluation period.
– Guidance is voluntary and interim in nature.
– After evaluation period, FWS “plans to develop a complete operations
manual for evaluation, site selection, design, construction, operation, and
monitoring of wind energy facilities in both terrestrial and aquatic
environments.”
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Interim Guidelines address:
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Evaluation of potential wind resource areas
Proper location of projects
Turbine and associated structure designs
Pre- and post-construction research and monitoring of wildlife impacts
FWS Director issued a memorandum clarifying guideline
implementation on April 26, 2004.
– Interim guidelines are “not to be construed as rigid requirements” and
should not override locally applicable scientific data and/or local expertise
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Wind Energy Development
on Federal Lands

Federal lands represent a significant source of required open space for
wind energy projects

BLM Wind Energy Policy Issued on October 16, 2002
– Applies to right-of-way applications for site testing and monitoring
facilities s and wind energy development projects on public lands
administered by BLM
– Interim policy while long-term programmatic approach finalized

2004 Draft Programmatic Environmental Impact Statement (PEIS) for
Wind Energy Development on BLM Lands
– Project-specific siting decisions will tier off the PEIS and Record of
Decision
– Draft PEIS proposes the implementation of a “Wind Energy Development
Program” that includes programmatic policies and best management
practices
– Public Comment Period Ends December 10, 2004
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Transmission System and
Markets Integration
 Wind
energy considerations within FERC
development of generation interconnection
procedures and pro forma interconnection
agreements
 Integration of wind generation into
ISO/RTO Markets
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Transmission System and
Markets Integration

Factors requiring wind energy-specific criteria for
interconnection.
– Non-synchronous operation
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Wind generation typically is non-synchronous induction
generation operating at 60 hertz.
Thermal/hydroelectric generation is synchronous with
operation at several multiples of 60 hertz
– Need for reactive power from external resources

Induction generation, typically, does not have ability to
generate reactive power
– Remote locations
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Transmission System and
Markets Integration

FERC Proceeding Addressing Wind Energy
Interconnection Procedures (RM02-1-005)
– May 20, 2004-Petition filed with FERC by the
American Wind Energy Association requesting
establishment of “Appendix G” with wind energyspecific interconnection standards as part of FERC’s
development of the Large Generation Interconnection
Procedures and pro forma Large Generation
Interconnection Agreement
– September 24, 2004- FERC technical conference
– November 1, 2004 – Comments filed with FERC in
follow-up to technical conference
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Transmission System and
Markets Integration

Interconnection Issues –
– Capability curve for “low-voltage ride-through” criteria
 Necessary to allow wind generator to stay on-line during and after
transmission system faults that cause severely depressed voltages
– Leading/lagging power factor requirements
 Proposal for .95 leading/lagging power factor
 Issue of whether wind generation should be required to have
capability to supply reactive power to 0.95 lagging (requires
additional design elements)
– Scope and timing of engineering and design requirements
 Wind developers seeking later time (at time of System Impact Study)
for detailed electrical diagrams
 Interconnection queue position held by wind project developer “selfstudy” for feasibility (versus transmission owner/ISO/RTO feasibility
study)
– Use of remote SCADA
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Transmission System and
Markets Integration

Market Issues –
– Energy imbalances

Inadvertent generation and schedule fluctuations can be more
prevalent for wind generation causing larger energy imbalance
charge exposures
– Reactive Power

Recognition of capacitors, static compensators or other
equipment as reactive power source for any market payments
for VAR Support
– Installed Capacity

Treatment of wind generation in ICAP markets with respect to
determination of available capacity and bidding/availability
requirements for ICAP resources
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Transmission System and
Markets Integration

December 1, 2004 “Technical Conference on
Assessing the State of Wind Energy In Wholesale
Electricity Markets (Docket No. AD04-13-000)”
– Potential OATT modifications to better accommodate
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intermittent resources such as wind generation
Review of energy imbalance methodologies and
whether they discriminate against intermittent resources
Integration of wind generation in regional transmission
planning processes
Inclusion of wind energy in State resource adequacy
plans and installed capacity markets
Transmission provider experiences with integration of
wind energy projects
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