California is experiencing a surge in development of battery energy storage projects driven by policy initiatives and consumer demand supporting development of renewable energy projects. To meet demand, investor-owned utilities across the state are partnering with battery project developers under contracts that, by California standards, have short entitlement and development windows. A number of projects have met those short entitlement windows by positioning themselves to qualify for exemptions from the California Environmental Quality Act (CEQA).
CEQA requires public agencies across California to analyze, disclose and mitigate where feasible potentially significant environmental impacts of any project permit it approves. The CEQA process is notorious for its capacity to introduce significant delay and cost to the entitlement process when an agency decides that the project requires analysis that triggers public review, such as an Environmental Impact Report (EIR) or a Mitigated Negative Declaration (MND).
The process generally takes at least six months, but often can take a year or longer. Delays result from the scoping and preparation of the EIR or MND by the applicant or the agency (often taking at least three to six months), the public review period associated with the document (often at least 30‒60 days), and revisions to the document often triggered by public comment (often at least another 30‒60 days). Additionally, the public review and comment process can serve to galvanize and rally new opposition to the project, which can increase political risk to the project approval and risk of CEQA litigation being filed challenging a final approval.
However, the good news is that these months of delay and this increased litigation risk can be avoided if the agency determines that the project qualifies for an exemption from CEQA.
What qualifies for an exemption
There are two types of CEQA exemptions: statutory and categorical. When enacting CEQA, the California Legislature directed the Secretary of the Natural Resources Agency to include in the CEQA Guidelines a list of classes of project that “have been determined not to have a significant effect on the environment and shall be exempt from this division.” (Public Resources Code §21084.)
These classes of projects are commonly referred to as the categorical exemptions. Examples of these classes of exempt projects include:
- Existing Facilities (CEQA Guideline §15301), which covers repair of existing structures and in some circumstances an addition of 10,000 square feet;
- New Construction or Conversion of Small Structures (CEQA Guideline §15303), which covers certain projects in urbanized areas of up to four commercial buildings not exceeding 10,000 square feet in floor area;
- Minor Land Divisions (CEQA Guideline § 15315), which covers certain land divisions of four or fewer parcels; and
- In-Fill Development Projects (CEQA Guideline §15332), which applies to certain projects on less than 5 acres within city limits.
These exemptions also may be stacked, meaning the agency can rely on multiple exemptions to cover different aspects of the project development.
By way of example, if a project includes a subdivision of fewer than four parcels and placement of batteries in an existing building, the agency may opt to use both the categorical exemption for Minor Land Divisions and the exemption for Existing Facilities or Conversion of Small Structures.
It is important to note that categorical exemptions cannot be used when the exceptions laid out in CEQA Guideline section 15300.2 apply. Roughly speaking, this means that to qualify for such a CEQA exemption, the agency must determine, based on evidence in the record, that the class of exemption applies to the project and the project will not result in potentially significant impacts to the environment.
Battery project exemptions
Battery projects of varying sizes have qualified for use of CEQA exemptions. For example, we have successfully advocated for categorical exemptions for projects ranging in size from 10 MW to 100 MW. An applicant team can facilitate the agency making that determination with a few critical steps.
1) Careful project siting and design is fundamental. From the outset, the project should be sited and designed with consideration of key issues including fire risk, site access, interconnection to the grid, water supply, noise and species impacts. Locating the infrastructure in an existing structure or pad or on existing disturbed property goes a long way in minimizing or avoiding potential impacts.
2) Careful crafting of application materials and associated technical studies is critical. Applications to public agencies generally require support with detailed technical studies. These studies become the foundation for the agency’s CEQA analysis. Some agencies will not allow the use of a categorical exemption if technical studies state mitigation is required to avoid potentially significant impacts. Many consultants favor the listing of mitigation measures in their reports, even when that mitigation is actually required by law or already part of the project design. The applicant team should work with consultants upon engagement to avoid having these items listed as mitigation and instead name them what they are, project design features.
3) Rely upon a strong design, legal and local lobbying team. This point is perhaps the most critical one and, of course, helps achieve all prior points. A strong team often includes a land use planner as project development is extremely localized and unique to the specific jurisdiction. Land use planners are multidisciplinary professionals skilled in planning and regulation, permitting and entitlements, and environmental review. Their experience extends into issues in advocacy and politics, public relations and environmental analysis and they act as the bridge between multiple stakeholders including the client, public agency staff and decision makers, client consultants and broader public.
Additionally, a team that knows key stakeholders goes a long way to knowing what concerns drive them and their constituents and how to deliver the strongest project submittal. An experienced team can strategically and efficiently craft the project, interact effectively with agency officials, respond quickly to issues that arise during the permitting process (as they undoubtedly will), elicit project support from local stakeholders, and head off concerns of potential project opponents.
Despite its well-known appetite for clean energy infrastructure, California is arguably one of the hardest places to develop projects, so streamlining permitting for any type of development is challenging. However, with a strategic approach from the outset, and an experienced team, many battery projects can be positioned to qualify for CEQA exemptions, substantially reducing entitlement timelines and cost, and under some circumstances, minimizing project litigation risk.