Legislative Program Review and Investigations Committee

Chapter II

Energy Facilities

This chapter describes the council's current siting jurisdiction, certification process, and other mandated functions related to energy facilities. As mentioned earlier, developers of new or modified facilities regulated by the council must obtain approval from the council prior to beginning construction. To carry out its mandate, the council is authorized to conduct certification proceedings, issue declaratory rulings, and override local land use decisions, if necessary.

Jurisdiction

Table II-1. CSC Jurisdiction of Energy Facilities: C.G.S.§ 16-50i

· An electric transmission line of a design capacity of 69 kilovolts (kV) or more, including associated equipment but not including a transmission line tap as defined in CGS § 16-50i (e);

· Any electric generating or storage facility using any fuel, including nuclear materials, including associated equipment for furnishing electricity but not including an emergency generating device, as defined in CGS § 16-50i(f) or a facility:

- owned and operated by a private power producer, as defined by CGS § 16-243b;

-a qualified small power production facility or a qualifying cogeneration facility under the Public Utilities Regulatory Policies Act of 1978, as amended, or a facility determined by the Council to be primarily for the producers own use; or

- a facility utilizing renewable energy sources generating one megawatt (MW) of electricity or less, or utilizing cogeneration technology generating 25 MW or less; and

· Any electric substation or switchyard designed to change or regulate the voltage of electricity at 69 kV or more or to connect two or more electric circuits at such voltage.

Generally, the council is authorized to site electric transmission facilities, intrastate gas pipelines, electric generation facilities, and electric distribution substations. Table II-1 lists the council's specific statutory jurisdiction over energy facilities.

Federal and Local Roles

The energy industry is heavily regulated by the federal government, which establishes maximum emissions levels and rates, supervises interstate activity, and oversees various other environmental and public safety standards. However, siting of specific facilities is left at the state level with the stipulation that any state and local regulation cannot interfere with federal initiatives or policies.

Federal role. Under the Federal Power Act of 1935, the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, the Public Utility Regulatory Policies Act of 1978, and the Energy Policy Act of 1992, the Federal Energy Regulatory Commission (FERC), an independent regulatory agency within the Department of Energy, regulates interstate aspects of electric power, natural gas, oil pipeline and hydroelectric industries.

The Natural Gas Act authorized FERC to regulate the construction of pipeline facilities and the transportation of natural gas in interstate commerce. Companies constructing and operating interstate gas pipelines must obtain FERC certificates of public convenience and necessity. The federal law states "any state or local permits issued with respect to the jurisdictional facilities authorized by FERC must be consistent with the conditions of the certificate of public convenience and necessity." Although FERC encourages cooperation between interstate pipeline companies and local authorities,  state or local laws may not prohibit or unreasonably delay the construction of facilities approved by FERC.

FERC does not have jurisdiction over all energy transmission. Pipelines restricted to intrastate operation are regulated by the states in which they operate and are not subject to FERC authority. The siting of intrastate pipelines is under the exclusive jurisdiction of the Connecticut Siting Council.

In 1996, FERC urged states to create independent system operators (ISOs) as part of the framework to support deregulation of the electric industry. ISOs are independent organizations that oversee operation of electric power lines on a regional scale. Pursuant to FERC Order 888, ISOs are approved and regulated by FERC. On July 1, 1997, FERC approved ISO New England, a not-for-profit, private corporation which is responsible for managing the region's electric bulk power generation and transmission systems. Although the ISO does not have direct involvement in the state's siting decisions, the council does consult with it when preparing forecasting reports on electric loads and resources, which help identify need and reliability.

State role. As noted in Chapter I, the electric industry is currently experiencing significant changes due to the recent restructuring legislation passed in 1998. Each electric company must unbundle (separate) its electricity generation and distribution components. The generation component will be subject to competition from other suppliers. The distribution component, called a distribution company, will continue to be regulated as a utility by DPUC.

The legislation requires electricity suppliers, including a distribution company's generation affiliates, to be licensed by DPUC. The suppliers must demonstrate their technical and managerial competence and meet a variety of environmental, consumer protection, and labor provisions. The impact of restructuring is still evolving and the extent of any necessary additional changes is still unknown. The council, pursuant to the restructuring act, has examined its own procedures. A report with recommended changes, submitted to the legislature's energy and technology committee in 1999, is under consideration.

Energy facilities seeking council siting approval must also obtain and comply with local permits and regulations. State law permits local authorities such as inland wetland agencies and municipal zoning commissions to regulate and restrict the location of facilities. The local agencies have a limited amount of time, varying by type of facility, in which to exercise their authority. If necessary, state law allows the council to override a local decision. (This is further discussed in the certification process.)

Certification Process

The various steps and timeframes of the CSC siting process are established in statute and council regulations. The following is a summary of the siting certification process for energy facilities under CSC jurisdiction. A flowchart of the process is provided in Figure II-1.

A certificate of environmental compatibility and public need must be obtained from the council prior to the construction or significant modification of an energy facility. Prior to submitting an application to the council, state law mandates certain pre-application activities.

Pre-application phase. By state law, a developer of an energy facility must consult with the municipality of the proposed or alternate locations at least 60 days before submitting a certification application to the council.¹ At the time of the consultation, the applicant must provide the chief elected official of the municipality with any technical reports concerning public need or benefit, site selection process, and environmental effects of the proposed facility. The municipality then has the opportunity to hold hearings on the proposed facility and to issue recommendations for consideration by the council within 60 days of the initial consultation.

A public notice containing the applicant's name, filing date, and a summary of the application must be published at least twice before the filing of the application. The notice must be made in a newspaper having general circulation in the potential municipality sites. At the same time public notice is given, the applicant must mail a notice of the application to all abutting landowners of all potential facility sites.

In addition, applicants for electric transmission facilities must provide notice to each electric company customer in the proposed municipality. The notice must be on a separate enclosure with each customer's monthly bill for one or more months but no sooner than 60 days before the filing of the application. The notice must include:

· the proposed facility's location relative to the affected municipality and adjacent streets;

· a brief technical description stating the proposed length and voltage, as well as the type and range of heights of support structures or underground configurations;

· the reason for the project; and

· an address and toll-free number where additional information about the project can be obtained.

Application filing. Applicants must follow detailed form and filing requirements specified in council regulations. The applicant may include any exhibits, sworn written testimony, data, models, illustrations, and all other materials the applicant deems necessary to support its application. Within 15 days after the application is filed, the applicant must provide the council all materials provided to the municipality and a summary of their consultations including the municipality's recommendations.

Each type of facility requires a number of items to be included in the application, such as maps, complete site data, estimated projects costs and schedule, as well as justification for the adoption of the site selected (with a comparison of alternatives). The mandated filing requirements for each type of facility are listed in Appendix A.

Each application filed with the council must also include proof of service and notice to:

• each proposed and alternative municipality in which any portion of the facility is to be located, including the chief elected officer, the planning and zoning commission, the conservation commission, inland wetland agencies, and regional planning agency;
• the State Attorney General;
• each member of the legislature in whose district the facility may be located;
• any federal agency that may have jurisdiction; and
• the state Departments of Environmental Protection, Public Health, Public Utility Control, Economic and Community Development, Transportation, Office of Policy and Management, and the Council on Environmental Quality.

The application fee is based on the project's estimated construction costs. Projects up to $5 million pay .05% of the construction costs or $1,000, whichever is greater. The fee for projects above $5 million is .1% of the construction costs or $25,000, whichever is less. The application fee is paid when filing the application. However, additional assessments may be made for expenses in excess of the filing fee. In the event fees exceed the council's actual costs, the difference will be refunded to the applicant.

The council staff reviews each application and may reject, within 30 days, any application not complying or correcting filing requirements.

During this thirty-day period, local authorities such as municipal zoning commissions and inland wetland agencies may regulate and restrict the location of a proposed electric substation. They have 65 days to regulate and restrict the location of proposed electric generating facilities. However, the order of the local agency is subject to appeal to the council. The council is authorized by statute to override local decisions by a vote of six of its members. According to the council, this is rarely done.

Completed applications are assigned to a council siting analyst who conducts a technical review to ensure compliance with state and federal law and regulations. Council staff may also complete some independent review of the information such as computer modeling or mapping. According to the council's executive director, consultants are rarely used in this evaluation but the staff does solicit comments from the various state agencies such as the Department of Environmental Protection or the Department of Public Utility Control that may have involvement in the regulation of the proposed facility.² The council may request any additional information it deems relevant.

The council may also conduct one or more field reviews of the proposed sites to visually assess the location and surrounding land uses. Council members may accompany staff on its inspection. Any identified discrepancies and necessary contingency plans are reported to the full council at its public hearing.

Public hearing. The council must hold a public hearing on the application between 30 and 150 days after receiving it.³ The hearing must be held by the council prior to making a final decision on certification. State law mandates at least one hearing must be held after 6:30 p.m. for the convenience of the general public in the county where the proposed facility may be located. The council must advertise the date and location of the hearing in local newspapers at least a week in advance of the scheduled date.

In addition to the applicant and those persons statutorily entitled to notice, any person or group interested in the council's proceedings may petition the council to participate as a party or intervenor. Petitions for recognition by the council must be sought at least five days before the date of the proceeding. The petition must include the petitioner's name and address, a description of the manner in which the petitioner is affected by the proceedings, and in what way and to what extent the petitioner proposes to participate in the proceedings. The council, at its discretion, may group parties and intervenors with the same interests.

By law, the council may acknowledge any such other persons it deems appropriate if the petitioner's participation, in the council's opinion, is in the interests of justice and will not impair the orderly conduct of the proceeding.

All parties and intervenors may participate in the proceedings by:

• filing pre-hearing questions for the applicant or other parties or intervenors;
• presenting testimony at the hearing;
• cross-examining witnesses at the hearing; and
• filing exhibits, briefs, and proposed findings of fact.
• All parties and intervenors are obligated to:
• respond to pre-hearing questions filed by the council, applicant, or other parties or intervenors;
• submit to cross-examination from the council, applicant, or other parties or intervenors; and
• provide the applicant and all other parties and intervenors with copies of all filings.

Any person who is not a party or intervenor may make an oral statement at the public hearing or file a written statement within 30 days after the close of the hearing.

The public hearing typically consists of:

• opening by the chairman;
• testimony by the applicant and cross-examination by the council, parties, and intervenors;
• testimony by parties and intervenors and cross-examination by the council, applicant, parties, and intervenors;
• public statements made during the evening session reserved for such statements; and
• rebuttal by the applicant.

A record must be made of the hearing and a copy of the record must be filed with the council and at a public office, designated by the council, in the county where the facility will be located. The council's record must remain open for 30 days after the close of the hearing.

Council deliberations. Based upon the information and materials collected through the application and public hearing, the council staff drafts formal Findings of Fact, Opinion, and Decision and Order. These draft documents are considered at a publicly noticed council meeting allowing the public to observe council deliberations. At this point, no new information, evidence, argument, or reply briefs will be considered by the council. However, parties and intervenors may identify any errors or inconsistencies with the council's drafts and the record.

As mentioned previously, state law dictates council membership by the type of facility proceeding. For energy, council membership consists of nine members. Five are appointed by the governor including the chairperson. At least two of the gubernatorial appointments must be experienced in the field of ecology and not more than one can have an affiliation with any utility, government utility regulatory agency, or facility under the council's jurisdiction. The Speaker of the House and the President Pro Tempore of the Senate each appoint one member. Finally, the commissioners of the Departments of Public Utility Control and Environmental Protection complete the membership.

The siting council is required to issue its decision to approve, approve with conditions, modifications, or limitations, or deny a certificate within 12 months of receiving an application for electric or fuel transmission and 180 days for electric generating or substation facilities.⁴ The council can extend any of these deadlines by another 180 days with the applicant's consent.

Statutory factors governing council energy facility decisions include the following:

1. a finding of public benefit which is statutorily deemed to exist if such a facility is necessary for the reliability of the electric power supply of the state or for the development of a competitive market for electricity;

2. consideration of probable environmental impact and conflicts with state policies on the natural environment, ecological balance, public health and safety, scenic, historic, and recreational values, forests and parks, air and water purity, and fish and wildlife; and

3. a determination that any adverse impact or conflicts with state policies are not sufficient to deny certification.

Three additional factors must be considered for electric transmission line facilities: what part will be overhead; conformance with a long-term electrical system plan; and conformance with state and federal regulations and guidelines for overhead parts. Undue hazards to persons or property also must be considered for both electric and fuel transmission lines.

In making its decision, the council must disregard whether the applicant already owns the facility site. The council must serve a copy of its decision on each party and publish it in the appropriate local newspapers. Council decisions can be appealed to the courts. According to the Attorney General's Office, few council decisions are challenged. As of June 2000, two court appeals regarding CSC energy siting decisions were pending - one from 1998 and one from 1999.

Follow-up and monitoring phase. The council confirms compliance of its orders through field investigations and approval and on-going review of detailed development and management plans. The development and management plans are finalized documents consisting of professionally engineered designs, site plans, construction schedules, and site inspection reports. Enforcement of council orders and state law is performed by the Attorney General which provides the council with legal assistance.

Council activities. Figure II-2 maps out all existing CSC-approved energy facilities in the state. Currently, there are three facilities under construction and two more have development and management plans pending.

Table II-2 provides energy certifications outcomes since 1990. As the table shows, the council approved nine generating facilities and seven transmission lines during the decade. Six of the nine approvals for generating facilities were made in the late 90s following passage of P.A. 98-28, which restructured the electric industry. Three proposed facilities have been denied since 1990. One transmission line project was dismissed in 1990.

Petitions for Declaratory Rulings

Facilities seeking exemptions from the certification process must petition the council for a declaratory ruling. Most petitions are seeking approval for modifications not producing substantial adverse environmental impact. The petitioner must state in writing the substance and nature of the request. The request must be accompanied by a statement of any data, facts, and arguments that support the position of the person making the inquiry.

Within 30 days after receipt of a petition, the council provides notice to all interested parties. The council may receive and consider data, facts, arguments, and opinions from persons other than the persons requesting the ruling. The council and its staff may conduct one or more field visits to assess whether the project may produce any substantial adverse environmental effect. The council, at its discretion, may schedule a hearing to determine any issues concerning the request for the declaratory ruling. Within 60 days after receipt of a request, the council must issue a written determination on the petition stating the reasons for its action.

The filing fee for a declaratory ruling is $500. Additional assessments may be made to cover all other expenses incurred by the council. Any fees in excess of the actual expenses of the council are refunded to the petitioner.

Table II-3 shows the number of petitions considered by the council since 1990. As the figure shows, more petitions have been filed regarding energy transmission lines and substations than for generating facilities. Since 1990, the council approved 120 petitions related to energy transmissions lines, with no denials. As mentioned previously, these are typically for facility modifications which do not have a substantial environmental adverse effect. The council also approved 23 petitions regarding electric generators during this same timeframe. However, it denied three petitions in this area.

One provision of Public Act 98-28, the electric restructuring law, allows the council to approve by declaratory ruling rather than certification a new generating plant, using a fuel other than coal or nuclear energy, proposed on an existing generating plant site. To date, only two new generating facilities have been approved by petition.

Forecast of Loads and Resources

Annually, electricity generators, except private power producers that generate electricity using renewable resources or cogeneration,⁵ must file a 20-year forecast of loads and resources with the Connecticut Siting Council. The council is statutorily required to review the long-term comprehensive planning of the annual forecasts including the companies' plan to meet public demand for safe, reliable, and cost-effective electricity. These forecasts are used by the utilities and the council to identify future generating and transmission facility needs.

Each mandated reporter must provide the following information:

• a tabulation of estimated peak loads, resources, and margins for each year;
• data on energy use and peak loads for the five preceding calendar years;
• a list of existing generating facilities in service;
• a list of scheduled generating facilities for which property has been acquired, certificates issued, and certificate applications filed;
• a list of planned generating units at plant locations for which property has been acquired, or at plant locations not yet acquired, that will be needed to provide estimated additional electrical requirements, and the location of such facilities;
• a list of planned transmission lines on which proposed route reviews are being undertaken or for which certificate applications have already been filed; and
• a description of the steps taken to upgrade existing facilities and to eliminate overhead transmission and distribution lines.

Additionally, information must be provided by each private power producer with a facility of more than one megawatt from whom the person furnishing the report has purchased electricity during the preceding calendar year. The information must include the name, location, size and type of generating facility, the fuel consumed by the facility and the by-product of the consumption.

The council must hold an annual public hearing on the electric companies' yearly forecasts of electricity demand and generating capacity. At least one session must be held after 6:30 p.m. The forecast report must be made available to the public upon request. While the council has had responsibility for compiling forecasting reports since the early 70s, it was not until 1996 that the council was authorized to issue its own report assessing the overall status of the supply and demand in the state.

In preparing its report, the council may consult with representatives of the energy industry including ISO New England which manages the New England region's electric bulk power generation and transmission systems. As described previously, the information assists the council and the industry to assess future needs and reliability. Copies of the council's report must be provided to members of the legislature's energy and technology committee, any legislators who request it in writing, and other state and municipal bodies designated by the council.

The most recent forecast hearings were held in June 2000. Among the items examined were historical data, projected outlook of load, demand and the effectiveness of conservation and load management programs. A final report is expected in September.

Investigation of Life-cycle Costs

The council is also required to compare the costs of overhead versus underground transmission lines over the life of the line known as life-cycle costs. The first investigation was statutorily mandated on October 1, 1994, and subsequent inquiries must be held every five years. Pursuant to state law, the investigation must address all relevant life-cycle costs, relative reliability, constraints on access and construction, potential damage to the environment, and compatibility with the electric supply system.

The council determines the schedule and scope of the investigation at a public meeting. The meeting must take place within 90 days before the first public hearing on the investigation. The hearing must provide all interested parties an opportunity to be heard and at least one hearing must be held after 6:30 p.m.

In conducting the investigation, the council may hire consultants, manufacturers, and other experts to objectively determine the range of life-cycle costs of overhead and underground lines. Experts may not have any current financial interest in, or in the 12 months preceding the investigation, have been associated with, companies that own, lease, control, or operate electric transmission or distribution lines within the state or that manufacture equipment for such lines.

The information ensures the overhead parts of existing and proposed transmission lines are cost effective and are the most appropriate alternative based on the life-cycle costs analysis of the facility and its underground alternatives. The 2000 life-cycle proceedings were held in July and August. A final report will be available in September.

Property Condemnation Proceedings

Finally, the council is also authorized to play a role in property condemnation proceedings. Any person engaged in the sale and generation of electric power may exercise rights of eminent domain only after the council has approved the facility location. Utility companies engaged in property condemnation proceedings are required by state law to inform property owners of their right to contest the taking.

The owner has 30 days from receiving the notice to request, in writing, that the council review whether the proposed takings are necessary and consistent with the state's energy policy. The council must issue its decision within 90 days of receiving the owner's request. The utility must pay the costs of the proceeding. If either party contests the council's decision or cannot agree on a price, it may petition the judicial district where the property is located to determine the issue. To date, the council has not received a request to initiate these proceedings.

¹ For electric generating facilities, the applicant must also consult with any municipality having a boundary not more than 2500 feet from the proposed facility.

² Applicants for certain energy facilities must be registered and licensed by the state DPUC prior to filing application. Environmental permits required by DEP are sought concurrently with the CSC application; however, decisions are independent and not contingent upon each other.

³ Hearings for amendments to certificates must be held between 30 and 60 days after receipt.

⁴ If the electric substation facility is incorporated with an application for an electric transmission facility, the council decision is due within 12 months of filing.

⁵ Cogeneration is the simultaneous production of electricity and thermal energy such as steam. Renewable energy resources are solar, wind and hydro power and biomass fuels such as wood and solid waste.

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