Energy LawThe Regulatory Environment for Business

February 29, 20200

The RI General Assembly recognized the need for coordinated decisions on where to site large energy facilities in the state. Given that there is some overlap in the jurisdiction of several agencies with various areas of expertise, this recognition makes sense. In changing the regulatory environment for business, the General Assembly passed the Energy Facility Siting Act. This act created an Energy Facility Siting Board (EFSB).

The Energy Facility Siting Board

The EFSB consists of “the chairperson of the public utilities commission, who shall serve as chairperson of the siting board; the director of the department of environmental management; and the associate director of administration for planning.” RIGL §42-98-5(a) (hyperlinks added). Its powers and duties created a new regulatory environment for business. For example, giving the EFSB authority over licensing and permitting review for any siting, construction, or alteration of any “major energy facility” located in the state.

A “major energy facility” can be coal facilities, high-generation electricity facilities, liquefied nitrogen and petroleum gas facilities (including transfer and storage – looking at you, port facilities!), various refineries, and various pipelines, among others (the full list is in RIGL §42-98-3(d)). The EFSB has also decided on some solar facilities and other renewable projects.

Recent News

The EFSB was in the news fairly recently in RI for quite some time. It grappled with the regulatory environment for business in reviewing the Invenergy project in the northwest corner of the state. Essentially, the Energy Facility Siting Act requires the EFSB, in a final hearing, to decide whether a proposed facility “is necessary to meet the energy needs of the state and/or region,” “is cost-justified, and can be expected to produce energy at the lowest reasonable cost to the consumer. . .” and “will not cause unacceptable harm to the environment and will enhance the socio-economic fabric of the state.” RIGL §42-98-11(b).

The EFSB’s full Invenergy decision describes why the proposed facility was denied for lack of “need” and can be viewed here. Some have reasoned the decision actually paves the way for arguments against other fossil fuel projects in the future and directs the regulatory environment for business toward renewable energy. This aligns with the state’s broader energy goals.

The EFSB and Your Project

The EFSB’s rules, regulations, and guidelines are instructive, but sometimes it’s hard to tell if your project needs EFSB approval. This creates uncertainty in the regulatory environment for business. For example, a petition for a jurisdiction determination is pending for Energy Storage Resources, LLC, which asks the EFSB to declare whether or not an electricity storage facility using lithium ion batteries would constitute a “major energy facility.”

Energy sources will continue to change as we try to shift toward renewables, and so the EFSB may determine that other projects come under its jurisdiction. In addition, some industries are slower to switch over to renewable energy, but their infrastructure for the facilities may be getting old and in need of replacement. For all of these projects, it’s best to work with an attorney who has subject matter expertise on energy laws and regulations.

If your business aims to get involved in projects that would require an EFSB approval, or if you are considering building a project which might be considered a “major energy facility,” you need an experienced attorney. Reach out to us to talk about whether you need to get EFSB approval and how to go about doing so. We know our way through this part of the regulatory environment for business! Call us today at 401.477.0023.

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