Decision Eases Energy Facility Siting in Federal and Commonwealth Coastal Waters

The Massachusetts Supreme Judicial Court (Court) recently issued a decision that significantly advances the permitting of Cape Wind Associates, LLC’s (Cape Wind) controversial wind farm project in Nantucket Shoals. The Court’s decision also is expected to clear the way for further development of alternative energy projects in Massachusetts’ coastal waters. Alliance to Protect Nantucket Sound, Inc. v. Energy Facilities Siting Board, Nos. SJC-10596 and SJC- 10578 (Mass. Aug. 31, 2010) (Alliance II). In its decision, the Court affirmed the Commonwealth’s Energy Facilities Siting Board’s (Siting Board) position that it could not consider in-state impacts of energy facilities located in federal waters (here the wind farm) in making permitting decisions, even if the facility’s success depends on the ability to construct transmission lines under the seabed in coastal waters, i.e., tidelands, within the Commonwealth’s jurisdiction. More broadly, the Court’s recognition of the primacy of federal jurisdiction over aspects of the Cape Wind Project also may provide useful precedent to developers seeking to site coastal projects in other states.

BACKGROUND

Cape Wind proposes a wind farm of 130 wind turbine generators, each 440 feet tall, in a part of Nantucket Sound that is in federal waters, and proposes to deliver the power to the regional electric power grid on the mainland in Barnstable, Massachusetts. While the wind farm itself requires only federal permits, two 115 kilovolt transmission cables (the transmission facility) require state and local permits, licenses, and approvals. The cables would be placed under 12.5 miles of seabed, with about 6 miles in Massachusetts’s tidelands, and then proceed underground on land for 5.9 miles after coming ashore in Yarmouth.

Cape Wind started the approval process for the transmission facility in 2001, applying to the Siting Board for the necessary preconstruction approval. The Siting Board granted approval in 2005, but conditioned on receipt by Cape Wind of all other necessary state, local and federal permits. The Siting Board’s grant of a conditional pre-construction approval was challenged, and the Court, in Alliance to Protect Nantucket Sound, Inc. v. Energy Facilities Siting Board, 448 Mass. 45 (2006) (Alliance I), upheld the Siting Board’s authority to issue such a conditional permit for the transmission facility.

One of the necessary permits, whose denial led to Alliance II, required the transmission facility’s approval as a “development of regional impact” (DRI) by the Cape Cod Commission (Commission). In March 2007, after Alliance I, Cape Wind renewed its efforts to obtain the DRI approval, which the Commission denied in October 2007. Cape Wind elected not to appeal the Commission’s DRI decision. Instead, it applied to the Siting Board for a “certificate of environmental impact and public interest” (§ 69k certificate) for the transmission facility. A § 69k certificate is a composite of several individual state and local permits, approvals, and authorizations that otherwise must be obtained separately. The Siting Board granted the § 69k certificate for the Cape Wind Project in May 2009. Three parties who had been permitted to intervene in the Siting Board’s certificate proceeding appealed the grant of the § 69k certificate to the Court. The Massachusetts Department of Environmental Protection (DEP), who intervened before the Siting Board, supported the Siting Board’s decision.

On appeal, the intervenors challenged the Siting Board’s decision to limit its jurisdiction to the transmission facility and exclude consideration of the in-state impact of the wind farm permitted in federal waters, arguing that no such jurisdictional limitation existed. The intervenors also contested the validity of the findings underlying the Siting Board’s decision and sought to invalidate a relevant DEP regulation issued under the Massachusetts Waterways Statute, GL.c. 91 that defined an infrastructure facility for delivering electricity from an off shore facility outside of the Commonwealth as water dependent.  

ALLIANCE II DECISION

In ruling on the intervenors’ appeal, the Court affirmed the Siting Board’s grant to Cape Wind of the § 69k certificate, for the reasons discussed below.

Dividing the Federal and State Waters: The Court treated the transmission facility, which traversed both state and federal waters, separately from the wind farm, which was entirely in federal waters. It determined that the Siting Board lacked jurisdiction to consider “in-state impacts” of the wind farm because it was located in federal waters. Therefore, the Court ruled that the scope of the Siting Board’s proceeding was properly limited to considering the impact of the transmission facility, which was located in both federal and the Commonwealth’s tidelands. The Commonwealth’s tidelands means the geographic area from primitive high water, including tidal flats and submerged lands, to Massachusetts’ seaward boundary.

The Court explained that federal jurisdiction over the wind farm’s location is paramount. It reasoned that denial of the § 69k certificate based on “instate impacts” of a project in federal waters, or even consideration of such impacts, would constitute denial of the wind farm project itself, and thus improperly usurp exclusive federal jurisdiction. Corollary to that holding, the Court found that the Siting Board was preempted from assessing the “need for” and “cost of” the wind farm. However, the Court ruled that the Siting Board was entitled to consider the in-state impact of that portion of the transmission facility in federal waters because those impacts related directly to a facility over which the Siting Board did have jurisdiction.

Affirming the Siting Board’s Authority over Structures in the Commonwealth’s Tidelands: The intervenors challenged the DEP regulation issued under G.L.c. 91 that defines a facility for electrical transmission from a facility in out of state waters as water dependent. The Commonwealth’s tidelands are subject to the public trust doctrine in which the public’s rights of fishing, fowling, and navigation in tidal flats were originally codified in the Colonial Ordinances of 1641-1647. Such tidelands are also currently administered in part under G.L.c. 91, which adds a public benefit requirement for licensing purposes.

The intervenors asserted that a wind farm was not water dependent since it could have been built on land. The Court affirmed first that the DEP regulation, which defined the transmission facility as water dependent, was rational because it was necessary to connect the off-shore wind farm to an on-shore power grid. As a result, the Court upheld the Siting Board’s determination that the transmission facility was water dependent even though a wind farm can be built on land.

The intervenors also challenged the Siting Board’s jurisdiction, arguing that part of the transmission facility was within tidelands over which the Massachusetts legislature has sole authority. However, the legislature may make an express delegation of that authority which it did, in part, under G.L.c. 91 to the DEP. The manner in which the legislature may delegate that authority was the Court’s principal focus in its August 2, 2010 decision in Arno v. Commonwealth, 457 Mass. 434 (2010). While recognizing such a legislative delegation to the DEP, the Court in Arno held that the legislature made no such express delegation that would permit the Massachusetts Land Court to terminate the public’s rights in tidelands in the land title registration process. In contrast, the Court ruled in Alliance II that the legislature had vested the Siting Board with the authority to perform the DEP’s function (i.e., “to act in DEP’s stead”) in issuing the composite § 69k certificate, and found that § 69k operates as an overlay of G.L.c. 91.

Affirming the Siting Board’s Permitting Authority: The intervenors challenged Cape Wind’s use of the Siting Board’s “one-stop” statutory authority to issue a § 69k certificate. However, the Court affirmed that a developer could engage in “onestop” permitting through the Siting Board, so long as it had attempted in good faith to follow the separate permitting processes. The Court found that Cape Wind had acted in good faith by applying to the Commission for the DRI, albeit unsuccessfully, and Cape Wind’s failure to appeal the Commission’s refusal did not preclude it from applying to the Siting Board for a § 69k certificate. Further, the Court read the Cape Cod Act (which established the Commission) and the Siting Board’s enabling legislation as consistent with one another, and held that one did not disable the other. On that basis, the Court found that the Siting Board decision trumped that of a local agency (here the Commission), thereby furthering the Siting Board’s role to provide a reliable energy supply and ensuring that local boards do not thwart the broader community’s needs for that energy supply.

Conclusion: The Court’s decision in Alliance II clarifies and eases the approval process for energy facilities, alternative or conventional, using the Commonwealth’s tidelands. Together with Alliance I, the Court in Alliance II upheld the Siting Board’s authority to grant Cape Wind’s petition for the multi-purpose § 69k certificate for the transmission lines without considering the impact of the wind farm that is located in federal waters. In reaching its conclusion, the Court further ruled that the Siting Board was not prohibited from acting on Cape Wind’s request to grant the appropriate licenses, even in tidelands that are subject to the public trust doctrine in Massachusetts.

More broadly, the manner in which the Court in Alliance II parsed the federal and state jurisdiction over the energy facilities to be placed in federal waters and state coastal waters may serve as precedent for developers seeking to conduct similar-type coastal projects in other states.