Comments on Proposed Changes to PBR Regulations (April 19, 2021)

9VAC15-6010

“…with a view to the project” – in the Tidewater region, this will be a very limited geographic area and a helpful change.  In the mountain region, a property could be 30+ miles away and still have a “view” to the project.  More precision in this definition would be helpful as it cannot reasonably be intended that properties, for example 30 miles away, must be evaluated.

“Disturbance zone” appears to clearly include an area 100’ beyond actual disturbance.  If this is intended, then greater precision in language elsewhere in the regs is needed – see below citations.

“Open Area” presumably includes the disturbance zone as defined herein.  If not, greater precision is needed.

“Responsible Person” – is a principal executive officer intended to mean only the City Manager or County Administrator, or may it include Deputies, Assistants or other executive officers in similar positions, and may it include department head level persons such as Directors of Public Works, etc.?  Ranking elected official would imply a Mayor in a City Council form or a Chairperson of a Board of Supervisors.  Is that what is intended?  Sometimes a Vice Mayor or Vice Chair is called on to act officially in these sorts of capacities.

“Virginia Natural Landscape Assessment Ecological Cores” uses the term “patches” which term is not defined and is not a readily measurable term.  The definition also includes a measurement expressed in meters which is not the customary unit of measurement in Virginia.  Please revise.

9VAC15-60-30

Section A.1.a.(2) uses “chief administrative officer and chief elected official” while the definition of “responsible person” uses the terms “principal executive officer” and “ranking elected official” – is the use of different terms here intentional or an oversight?

In this same section, is it possible to allow (or at minimum make clear, indeed encourage, but not require) that the notifications required by the original applicant and the new applicant be given through a single form or notice to help expedite the process?

9VAC15-60-40

Section C.2. requires survey of architectural resources within a half mile but does not allow for the “view to” limitation.  That limitation is allowed in the section dealing with applications submitted after 12 months following the effective date.  What legitimate public purpose is advanced by not immediately allowing the same limitation to apply to applications submitted before 12 months following?  If it is appropriate then, why not immediately upon adoption?

9VAC15-60-45

Section B.1 uses distance from the “site” and from the “disturbance zone” differently, and they should be used consistently when assessing impacts.  There is no de facto “impact” from the portions of a site that are not disturbed.

Section C, without an express deadline for DHR to confirm that it has received an administratively complete analysis, the provision allowing for a complete application to be considered accepted if DHR has not responded with comments in 30 days is effectively meaningless.   Reports from consultants across the Commonwealth have for decades indicated that DHR is often THE long pole in the approval tent for a wide of range of project types that require DHR involvement.  Please revise to make workable and predictable.

Section C.3. should be amended to make clear that certain areas of a site are rarely if ever surveyed (steep slope areas, previously disturbed areas for example) and for solar projects, it should be made clear that such areas, undevelopable areas and/or areas the applicant is not proposing for development should NOT require field survey.

Additionally, the probability assessment and predictive modeling approaches to streamlining archaeological investigations have for many years been accepted and should be institutionalized so that qualified professionals exercising their professional judgements in such approaches are deemed valid and not require effectively perfunctory, and often time-delayed approval.  It adds unnecessary department workload, insults the professional integrity of qualified experts and delays processing of solar projects that the Commonwealth has expressed by policy and law that it wants to bring on line swiftly.

Section D.1.(a), (b) and (c) refers to “site” instead of “disturbance zone” when defining minimum search distances.  Regulations should be consistent and should relate regulatory burdens to measurable impacts, such that a large “site” boundary, with a constrained disturbance zone within it, should not be the basis for the distance threshold.

9VAC15-60-70

Section A.  Stating “disturbance zone with 100 foot buffer” is confusing and redundant in that disturbance zone has been defined to include a 100 foot buffer.

Section B. It should be clarified that depicting the Chesbay RPA areas on a context map covering 5 miles from the boundary should only be for those RPAs mapped by a locality or on another publicly available database.  It could be wrongly interpreted to refer to RPA areas based on site specific factors, and that is clearly not realistic for such a large area and on properties where an applicant has no authority to enter to perform site specific determinations.

Additionally, in Section B, “farmland” and “brownfield sites” are not defined in the regulations and could be interpreted differently by an applicant and the department.  Please define these terms with precision or make clear that the intent is only to show general areas meeting some colloquial understanding of what those terms mean.

Section C.1, same comment about disturbance zone with 100-foot buffer is redundant as the buffer is included in the disturbance zone.

9VAC15-60-80

Section B, same comment about disturbance zone with 100-foot buffer is redundant as the buffer is included in the disturbance zone.

9VAC15-60-90

Section B, how is an applicant to know which local newspapers reach low-income or minority populations in the area where the property is to be located?  If the area where the project is to be located is a majority minority population, does this then require that the newspaper be deemed to reach a population which is not in one of those minorities, but in what might be colloquially thought of as majority?  Few people, whether of low income, minority, majority, etc. read newspapers anymore, and even fewer read these sorts of classified ads, so is this provision accomplishing a meaningful public purpose?

9VAC15-60-100

Section D.4. should be clarified to refer to any information requested by the department within the confines of the application requirements, not an open-ended request, and there should be an opportunity for an applicant to respond within 30 days to a reasonable request that it is unable for stated reasons to comply within that timeline.

9VAC15-60-110

Section B, it is inappropriate to require the payment of a CAPZ mitigation fee in advance unless there is an express provision allowing for a timely refund of (reduction in) the payment in the event the project does not move forward or if it is downsized through final local permitting and engineering design and therefore no longer falls into a higher MW fee category.

**************

Thank you for the opportunity to comment.

Dear Director Paylor:

Please see the following comments of Virginia Solar (“VASOLAR”) regarding DEQ’s proposed regulations amending the Small Renewable Energy (Solar) Permit by Rule (“PBR”) program (the “Proposed Regulations”).  VASOALR was founded in 2015, and has developed 11 projects totaling 379MW, covering 3200 acres in the Commonwealth.  The principals for VASOLAR are responsible for 11 approved PBRs or ~20% of the total number issued to date. 

DEQ’s Proposed Regulations, however, would result in substantial, highly detrimental changes to Virginia’s regulatory environment. The Proposed Regulations would add new, burdensome regulatory requirements. In fact, DEQ’s Proposed Regulations would single out the clean energy industry for new regulatory burdens, imposing some of the agency’s most stringent environmental regulations on carbon-free generation. Most concerning, DEQ appears poised to impose new regulatory requirements that are not imposed on other energy projects such as new gas-fired power generation, high-voltage transmission line construction, or interstate gas pipelines. For example 9VAC15-60-45  D 1 d. Onsite surveys for natural heritage resources recommended by DCR based on the analysis required under this subsection, expands DCR’s authority as currently reports are only required for state or nationally listed species. 

DEQ’s Proposed Regulations would be out-of-step with the State Corporation Commission’s (“SCC”) permitting process for renewable energy and non-renewable generation assets and transmission facilities. DEQ proposes to impose new fees and regulatory burdens that have no parallel under the SCC’s permitting processes and that are unprecedented in Virginia.

These matters are even more consequential today than at the start of DEQ’s RAP process. After the conclusion of the RAP process, the General Assembly passed landmark clean energy legislation that will require Virginia’s two largest electric utilities to add thousands of megawatts (“MW”) of solar by 2035.   The proposed revisions to the PBR regulations, if enacted in 2020, could impede the solar industry’s ability to develop cost-effective projects, thereby jeopardizing the Commonwealth’s ability to achieve the ambitious clean energy goals established by the 2020 Virginia Clean Economy Act.

Attached is a summary of VASOLAR’s primary concerns with the Proposed Regulations, as published in the March 15, 2021, Virginia Register of Regulations.

We appreciate DEQ’s consideration of the following comments on behalf of Virginia’s solar industry. As always, we are available to meet with you or your staff should you have any questions about these comments.

Sincerely,

Matthew Meares

Comments and Objections of Virginia Solar regarding DEQ’s Proposed Amendments to Small Renewable Energy (Solar) Regulations

As published in the March 15, 2021, Virginia Register of Regulations

VASOLAR opposes DEQ’s unsupported application fee increase proposal – Proposed Rule 9VAC15-60-110

VASOLAR opposes DEQ’s fee increase proposal. The Proposed Regulations would result in meaningful fee increases for all new projects. Under the current regulations, applicants pay fees based on the size  (i.e., MW capacity) of the facility. Projects with rated capacities between 5 MW and 25 MW must pay a base application fee of $8,000. Projects between 75 MW and 150 MW pay an application fee of $14,000.[1] Currently, developers must pay a “modification fee” of $4,000 in the event that the applicant proposals a modification to the facility design that does not increase the MW capacity of the facility.[2]

Under the Proposed Regulations, would impose a new Notice of Intent (“NOI”) fee of $2,000 for all projects; new Modification fees equal to 20% of the application fees; new “Incomplete” fees equal to 20% of the application fees; and new annual “Maintenance” fees of $500 plus $15 per MW of capacity.

Under the Proposed Rules, a developer of a 150 MW would pay annual maintenance fees of $2,750/yr over the life of the project. If a developer were required to submit a modification to the design of proposed facility, even if such modification did not increase the acreage disturbed or change the location of the project, the developer would be subject to an additional $6,500 fee. Were an application determined to be “incomplete” for any reason, the developer would be subject to a yet another $6,500 fee.

VASOLAR is disappointed that DEQ has not justified the need for its dramatic proposed fee increases. DEQ has not offered any record basis for its application fee increase proposal. While DEQ has stated that it became necessary to revisit the fee structure “in order to fully support the program, including compliance and enforcement activities,”[3] DEQ has not indicated that it will increase staffing for the PBR program or undertake any efforts to improve the efficiency of the program. VASOLAR cannot support fee increases without a commitment from DEQ that it will increase staffing for the PBR program.

VASOLAR opposes DEQ’s proposal to apply so-called “maintenance fees” – Proposed Rule 9VAC15-60-110 D

Additionally, DEQ has not supported its proposal to impose annual “maintenance” fees for permitted facilities. DEQ indicates that all “projects permitted after the effective date of the amendments will be assessed an annual maintenance fee to cover ongoing inspection and compliance costs.” DEQ has not explained what “compliance and enforcement activities” DEQ expects to undertake for permittees that are not required to submit a mitigation plan. The maintenance fee proposal appears to be borrowed from DEQ’s Title V program under the Clean Air Act.[4] Title V requires state regulators to assess sufficient annual fees to ensure permittees’ compliance with emissions limits and other requirements.

Solar facilities, however, do not emit air pollution or require expert staff review of annual emissions reports and other filings. DEQ has not provided any record evidence to justify annual maintenance fees to “monitor” or “maintain” non-emitting solar generation facilities. There is little necessary ongoing O&M expense or a need for continuing DEQ oversight given other permits in place (e.g., local conditional use permits and stormwater permits) and the passive, static nature of these projects following commercial operation.

VASOLAR notes that SCC-permitted facilities, including solar facilities, fossil generating plants, and high-voltage transmission lines, are not assessed any ongoing maintenance costs as a condition to approval to construct and operate the facility. Neither the General Assembly nor the SCC have chosen to apply any maintenance fees for any generation resources. This is strong evidence that such maintenance fees are unnecessary.

DEQ’s proposed annual maintenance fees are not supported by the agency record and would single out the solar energy industry, subjecting these non-emitting, environmentally friendly resources to regulatory burdens not borne by fossil fuel generators and not imposed by the SCC. For these reasons, DEQ’s proposed maintenance fees appear to be arbitrary and capricious.

Notwithstanding the foregoing, VASOLAR would not oppose maintenance fees for projects where DEQ has imposed a mitigation requirement based on a finding of adverse impacts on wildlife or natural resources, provided that DEQ can reasonably demonstrate a nexus to its own costs in inspecting the site or reviewing annual reports. 

VASOLAR opposes DEQ’s proposed Predicted Suitable Habitat requirements – Proposed Rule 9VAC15-60-45

The Proposed Regulations require applicants to prepare a report regarding natural heritage resources that uses “predicated [sic] suitable habitat” (“PSH”) modeling.[5] This potential regulatory requirement was not discussed at any RAP meeting. DEQ has failed to establish in the record the basis for the use of a “predicted habitat” analysis rather than the actual presence of threatened and endangered (“T&E”) species, nor has it engaged in any cost-benefit analysis regarding the imposition of this new burden. It is not clear what additional areas would be covered, what mitigation would be required, or even how mitigation requirements would be determined for suitable habitat. Without any sufficient explanation or basis established in the record this requirement is arbitrary and capricious.

VASOLAR is not aware of any Virginia regulatory program that requires PSH modeling analysis, not to mention required mitigation for suitable habitat where species are not present.

Separately, use of this modeling could prove difficult, as this software is expensive and not easily accessible. It is not clear that a developer can simply make a request for state T&E PSH of the disturbance zone and have a report generated. The proposed PSH modeling requirements would unnecessarily increase permitting expenses for solar developers.

VASOLAR does not support DEQ’s apparent attempt to single out the solar industry for new, untested, potentially project-altering regulatory burdens. The PSH requirement has not been adequately considered and appears to be arbitrary and capricious.

VASOLAR opposes making DCR recommendations requirements- Proposed Rule 9VAC 15--60-45  D 1 d

The Proposed Rule makes Onsite surveys for natural heritage resources recommended by DCR based on the analysis required under this subsection.  The reason DCR only makes recommendations is they do not have the authority to require such studies.  These regulations make “recommended” studies requirements which effectively expands DCRs jurisdiction in relation to solar projects.  DEQ’s Proposed Regulations would single out the solar energy industry, subjecting these non-emitting, environmentally friendly resources to regulatory burdens not borne by fossil fuel generators and not imposed by the SCC.

VASOLAR opposes DEQ’s proposed ecological core analysis requirements – Proposed Rule 9VAC15-60-55

The Proposed Rules provide for an automatic finding of adverse environmental impacts any time a project disturbance area intersects an area designated by the Virginia Natural Landscape Assessment as a C1 or C2 ecological core area. In such cases, the applicant would be required to submit a mitigation plan to “include practices to minimize or offset significant adverse impact through activities to protect, restore, or enhance the affected or similar resource.”[6] Thus, DEQ proposes to require applicants to preserve similar land that may not be part of the disturbed site.  This offsite mitigation requirement does not appear to be authorized by the PBR statute, which provides for site-specific mitigation.[7] By contrast, the General Assembly has granted clear authority for offsite mitigation for wetland and stream impacts.[8] This proposed requirement is therefore beyond the scope of DEQ’s statutory authority. 

More broadly, areas designated as C1 and C2 ecological core areas are pervasive throughout the Commonwealth.[9] These areas will undoubtedly intersect with numerous solar development projects, resulting in potentially project-altering mitigation requirements.

VASOLAR is not aware of any other permitting program that utilizes the ecological core assessment. VASOLAR does not support testing novel regulatory requirements and analytical tools on the solar industry, especially when done without any direction from the General Assembly. As discussed through these comments, the solar industry is responding to clear policy directives from the General Assembly to develop tens of thousands of megawatts in the Commonwealth in a short period of time.

DEQ has proposed a drastic change to this regulatory program without any discernable cost-benefit analysis or apparent awareness of the impacts. The proposed ecological core analysis and mitigation requirements are therefore arbitrary and capricious.   

VASOLAR recommends a modification to the proposed definition of “disturbance zone” – Proposed Rule 9VAC15-60-10

VASOLAR opposes DEQ’s definition of “disturbance zone” under the current regulations and under the Proposed Rules:  

"Disturbance zone" means the area within the site directly impacted by land-disturbing activity, including construction and operation of the small solar energy project and within and 100 feet of from the boundary of the directly impacted area. 

VASOLAR understands the intent is to capture areas actually disturbed (i.e., “directly impacted by land-disturbing activity”) by the construction of a solar facility. The actual definition is overly broad, however, and should be clarified to exclude areas not controlled by the applicant.   

The definition of “disturbance zone” is critically important. This definition could determine which projects are required to obtain a PBR.[10] The definition of disturbance zone would also be used to determine the areas that must be surveyed as part of the natural resources review process.[11]

VASOLAR recommends that the disturbance zone be defined to include no more than 15 feet from the boundary of the directly impacted area.

VASOLAR urges DEQ to consider the General Assembly’s public policy goals as expressed in the Virginia Clean Economy Act.

Since the conclusion of the RAP process, the General Assembly enacted the Virginia Clean Economy Act.[12] The VCEA represents the General Assembly’s most ambitious clean energy policy enactment to date. The VCEA is intended to remake Virginia’s energy economy by encouraging and mandating utility investments in renewable energy located in the Commonwealth. The VCEA includes a mandatory Renewable Portfolio Standard, which requires Virginia’s two largest electric utilities to meet increasing renewable energy procurement targets. Dominion Energy and Appalachian Power must reach 100% renewable energy by 2045 and 2050, respectively.

The VCEA also requires Dominion and Appalachian to add at least 16,700 MW of new solar and/or onshore wind generation by 2025.[13] Importantly, this new capacity must be located in the Commonwealth.

VASOLAR urges DEQ to consider this new policy when finalizing the solar PBR regulations. The VCEA is not only an invitation but a directive for the solar industry to begin developing projects in Virginia.  The new regulatory burdens proposed by DEQ will jeopardize individual projects, but the Commonwealth’s clean energy transition. In light of the clear public policy of the Commonwealth, VASOLAR urges DEQ to avoid imposing excessive fees, or singling out the solar industry for untested, potentially project-killing regulatory requirements.  

VASOLAR maintains that the solar PBR process was intended to be – and should remain – less burdensome than obtaining a CPCN from the SCC.

VASOLAR is concerned that the Proposed Rules would impose additional regulatory requirements that could make the solar PBR more burdensome than obtaining a certificate of public convenience and necessity (“CPCN”) from the SCC. As DEQ has recognized,[14] the State Corporation Commission does not assess fees when issuing CPCNs for electric infrastructure such as power plants, transmission lines, or distribution facilities such as substations. The SCC, as Virginia’s primary energy regulatory agency, retains jurisdiction to permit utility-scale generation facilities of any size. VASOLAR believes that the PBR alternative was intended to be – and should remain – a less burdensome permitting option for projects that have minimal adverse effects on the environment and further the Commonwealth’s clean energy policies.

VASOLAR recommends that DEQ provide additional time for the industry to comply with any new fees or regulatory requirements – Proposed Rule 9VAC15-60-40, 9VAC15-60-50, 9VAC15-60-55, 9VAC15-60-60 and 9VAC15-60-65.

Under the Proposed Regulations, certain new regulatory requirements would not be imposed on project applications submitted within one year of the effective date of the new regulations.  VASOLAR appreciates DEQ’s proposal of a grandfathering provision and believes that using the application date will establish regulatory clarity. However, VASOLAR urges DEQ to extend this period to at least two years. Solar development projects often take four years or more to complete, reflected in option agreement terms that are typically up to five years in length. VASOLAR has made significant investments in projects in the form of option payments to landowners, environmental studies, interconnection studies, engineering studies, legal fees, and other diligence. VASOLAR has made these investments based on a financial model that will not hold under the new regulations. As a practical matter, the PBR is the last development task (other than non-discretionary building or electrical permits) for a project developer to issue notice to proceed. Thus, there is a large existing pipeline of projects currently under development that may not apply for the PBR within one year of the effective date of the final regulations as proposed by DEQ. These projects will experience a change of rules midstream with some projects unfairly penalized and others projects simply made non-viable.

As a general rule, development projects in Virginia have been undertaken and financially modeled assuming a certain level of regulatory burden and expense. This has been done based on the current regulations. It is not appropriate to change the fundamental cost and viability parameters in midstream for these projects. VASOLAR recommends the DEQ minimize this hardship by extending the grandfathering period for any new fees or regulatory requirements to a minimum of three years.

The Virginia Native Plant Society is a volunteer-led conservation 501(c)(3) organization with nearly 2000 members and is committed to conserving wild flowers and wild places. The VNPS favors regulations that will prevent or severely limit the deleterious effects of solar farms in terms of their impacts on native plant communities. These solar farms also offer the opportunity to use native plants to create habitat to support pollinators and other at-risk fauna in areas with little current conservation value.  

In regard to the completion of the Virginia Pollinator-Smart Solar Scorecard as part of the application, we note that there is no requirement for the Scorecard to be passed, nor is there any requirement currently in the regulation for native species to be planted. The current version of the PBR asks only that the developer complete the scorecard to suggest they think about incorporating native species at their site. We favor stronger regulations regarding completion of the scorecard and a requirement for planting native species.

We believe that there should be a requirement for a desktop analysis studying Ecological Cores and total avoidance of C1 and C2 cores. The ecological cores model is a product created by the Natural Heritage Program in partnership with another group, and it identifies and prioritizes areas of land (usually forested) that are 100 acres or greater into categories C1-C5.  C1s are usually places like the Dismal Swamp, GWNF, and other large tracts of land with intact natural communities and habitat for rare species.  Under no circumstance, other than to protect the immediate safety and well-being of those nearby, should these cores be permanently destroyed for “green energy.”  In the event that C1 or C2 ecological cores require impact for a solar farm, we believe mitigation that may be reasonably expected to protect an equal or larger area of similar (in habitat type and vicinity) ecological cores be mandatory. We also recommend that counties review ecological cores during their special use or conditional use permitting process. We encourage mitigation for other types of ecological cores.

In addition, we recommend that the regulations should be effective immediately upon adoption. 

Thank you for the opportunity to comment.

Nancy Vehrs

President, Virginia Native Plant Society

www.vnps.org 

Via Mail & E-Submission

Re:      DEQ Solar Permit by Rule Regulations

Dear Director Paylor:

Please see the following comments of the Chesapeake Solar and Storage Association (“CHESSA”) regarding DEQ’s proposed regulations amending the Small Renewable Energy (Solar) Permit by Rule (“PBR”) program (the “Proposed Rules”). CHESSA was pleased to participate as a member of the Rulemaking Advisory Panel (“RAP”). The association was founded in 1984 and has now grown to over 170 member companies employing nearly 10,000 local residents. CHESSA, the regional affiliate of the national Solar Energy Industries Association, represents numerous companies that are developing utility scale projects in Virginia.[1]

CHESSA members have invested tens of millions of dollars in project development on hundreds of projects spread across the Commonwealth. This includes investment in projects in all stages of development. These substantial investments have been made with the assumption that state permitting requirements for such projects would not materially change.

DEQ’s Proposed Rules, however, would result in substantial, highly detrimental changes to Virginia’s regulatory environment. The Proposed Rules would increase total fees for project developers by as much as four times, while adding new, burdensome regulatory requirements. In fact, DEQ’s Proposed Rules would single out the clean energy industry for new regulatory burdens, imposing some of the agency’s most stringent environmental regulations on carbon-free generation. Most concerning, DEQ appears poised to impose new regulatory requirements that are not imposed on other energy projects such as new gas-fired power generation, high-voltage transmission line construction, or interstate gas pipelines. As discussed in the attached comments, these new regulatory requirements place at risk approximately 3,000 megawatts (“MW”) of projects currently under development.

DEQ’s Proposed Rules would also be out-of-step with the State Corporation Commission’s (“SCC”) permitting process for renewable energy and non-renewable generation assets and transmission facilities. DEQ proposes to impose new fees and regulatory burdens that have no parallel under the SCC’s permitting processes and that are unprecedented in Virginia.

These matters are even more consequential today than at the start of DEQ’s RAP process. After the conclusion of the RAP process, the General Assembly passed landmark clean energy legislation that will require Virginia’s two largest electric utilities to add thousands of megawatts of solar by 2035. These projects will be developed, by and large, by CHESSA member companies. The proposed revisions to the PBR regulations, if enacted in 2020, could impede the solar industry’s ability to develop cost-effective projects, thereby jeopardizing the Commonwealth’s ability to achieve the ambitious clean energy goals established by the 2020 Virginia Clean Economy Act.

Attached is a summary of CHESSA’s primary concerns with the Proposed Rules, as published in the March 15, 2021, Virginia Register of Regulations.

We appreciate DEQ’s consideration of the following comments on behalf of Virginia’s solar industry. As always, the industry is available to meet with you or your staff should you have any questions about these comments.

Sincerely,

/s/ William T. Reisinger

Counsel for CHESSA

Comments and Objections of CHESSA regarding DEQ’s Proposed Amendments to Small Renewable Energy (Solar) Regulations

CHESSA opposes DEQ’s unsupported application fee increase proposal – Proposed Rule 9VAC15-60-110

CHESSA opposes DEQ’s fee increase proposal. The Proposed Rules would result in meaningful fee increases for all new projects. Under the current regulations, applicants pay fees based on the size  (i.e., MW capacity) of the facility. Projects with rated capacities between 5 MW and 25 MW must pay a base application fee of $8,000. Projects between 75 MW and 150 MW pay an application fee of $14,000.[2] Currently, developers must pay a “modification fee” of $4,000 in the event that the applicant proposals a modification to the facility design that does not increase the MW capacity of the facility.[3]

Under the Proposed Rules, however, developers would pay a base fee of $7,500 plus an additional variable fee of either $150 per MW (for projects under 20 MW) or $165 per MW (for projects between 20 MW and 150 MW). In addition to this significant increase in base application fees, the Proposed Rules would also impose a new Notice of Intent (“NOI”) fee of $2,000 for all projects; new Modification fees equal to 20% of the application fees; new “Incomplete” fees equal to 20% of the application fees; and new annual “Maintenance” fees of $500 plus $15 per MW of capacity.

Under the Proposed Rules, a developer of a 150 MW would pay base application fees of at least $34,500 when including the NOI fee, plus annual maintenance fees of $2,750 over the life of the project. If a developer were required to submit a modification to the design of the proposed facility, even if such modification did not increase the acreage disturbed or change the location of the project, the developer would be subject to an additional $6,500 fee. Were an application determined to be “incomplete” for any reason, the developer would be subject to yet another $6,500 fee.

CHESSA is disappointed that DEQ has still not justified the need for its dramatic proposed fee increases. DEQ has not offered any record basis for its application fee increase proposal. While DEQ has stated that it became necessary to revisit the fee structure “in order to fully support the program, including compliance and enforcement activities,”[4] DEQ has not indicated that it will increase staffing for the PBR program or undertake any efforts to improve the efficiency of the program. CHESSA cannot support fee increases without a commitment from DEQ that it will increase staffing for the PBR program.

CHESSA opposes DEQ’s proposal to apply so-called “maintenance fees” – Proposed Rule 9VAC15-60-110 D

Additionally, DEQ has not supported its proposal to impose annual “maintenance” fees for permitted facilities. DEQ indicates that all “projects permitted after the effective date of the amendments will be assessed an annual maintenance fee to cover ongoing inspection and compliance costs.” DEQ has not explained what “compliance and enforcement activities” DEQ expects to undertake for permittees that are not required to submit a mitigation plan. The maintenance fee proposal appears to be borrowed from DEQ’s Title V program under the Clean Air Act.[5] Title V requires state regulators to assess sufficient annual fees to ensure permittees’ compliance with emissions limits and other requirements.

Solar facilities, however, do not emit air pollution or require expert staff review of annual emissions reports and other filings. DEQ has not provided any record evidence to justify annual maintenance fees to “monitor” or “maintain” non-emitting solar generation facilities. There is little necessary ongoing O&M expense or a need for continuing DEQ oversight given other permits in place (e.g., local conditional use permits and stormwater permits) and the passive, static nature of these projects following commercial operation.

CHESSA notes that SCC-permitted facilities – including large solar facilities, fossil generating plants, electric substations and switching stations, and high-voltage transmission lines – are not assessed any ongoing maintenance costs as a condition to approval to construct and operate the facility. Neither the General Assembly nor the SCC have chosen to apply any maintenance fees for any generation resources. This is strong evidence that such maintenance fees are unnecessary.

Moreover, DEQ’s proposed annual maintenance fees are not supported by the agency record. These fees would single out the solar energy industry, subjecting these non-emitting, environmentally friendly resources to regulatory burdens not borne by fossil fuel generators and not imposed by the SCC. For these reasons, DEQ’s proposed maintenance fees appear to be arbitrary and capricious.

Notwithstanding the foregoing, CHESSA would not oppose maintenance fees for projects where DEQ has imposed a mitigation requirement based on a finding of adverse impacts on wildlife or natural resources, provided that DEQ can reasonably demonstrate a nexus to its own costs in inspecting the site or reviewing annual reports. 

CHESSA opposes DEQ’s proposed Predicted Suitable Habitat requirements – Proposed Rule 9VAC15-60-45

The Proposed Rules require applicants to prepare a report regarding natural heritage resources that uses “predicated [sic] suitable habitat” (“PSH”) modeling.[6] This potential regulatory requirement was not discussed at any RAP meeting. DEQ has failed to establish in the record the basis for the use of a “predicted habitat” analysis rather than the actual presence of threatened and endangered (“T&E”) species, nor has it engaged in any cost-benefit analysis regarding the imposition of this new burden. It is not clear what additional areas would be covered, what mitigation would be required, or even how mitigation requirements would be determined for suitable habitat. Without any sufficient explanation or basis established in the record this requirement is arbitrary and capricious.

CHESSA is not aware of any Virginia regulatory program that requires PSH modeling analysis, not to mention required mitigation for suitable habitat where species are not present.

Separately, use of this modeling could prove difficult, as this software is expensive and not easily accessible. It is not clear that a developer can simply make a request for state T&E PSH of the disturbance zone and have a report generated. The proposed PSH modeling requirements would unnecessarily increase permitting expenses for solar developers.

CHESSA does not support DEQ’s apparent attempt to single out the solar industry for new, untested, potentially project-altering regulatory burdens. The PSH requirement was not discussed with the RAP, has not been adequately considered, and appears to be arbitrary and capricious.

CHESSA opposes DEQ’s proposed ecological core analysis requirements – Proposed Rule 9VAC15-60-55

The Proposed Rules provide for an automatic finding of adverse environmental impacts any time a project disturbance area intersects an area designated by the Virginia Natural Landscape Assessment as a C1 or C2 ecological core area. In such cases, the applicant would be required to submit a mitigation plan to “include practices to minimize or offset significant adverse impact through activities to protect, restore, or enhance the affected or similar resource.”[7] Thus, DEQ proposes to require applicants to preserve similar land that may not be part of the disturbed site.  This offsite mitigation requirement does not appear to be authorized by the PBR statute, which provides for site-specific mitigation.[8] By contrast, the General Assembly has granted clear authority for offsite mitigation for wetland and stream impacts.[9] This proposed requirement is therefore beyond the scope of DEQ’s statutory authority. 

More broadly, areas designated as C1 and C2 ecological core areas are pervasive throughout the Commonwealth.[10] These areas will undoubtedly intersect with numerous solar development projects, resulting in potentially project-altering mitigation requirements. CHESSA has further collaborated with SHINE (The Solar Hands-On Instructional Network of Excellence) to evaluate projects for development risk based on location and proximity to the C1 and C2 ecological core areas. SHINE estimates that 34 projects representing 3,000 MWs of project development and 6,000 entry level construction positions may be at risk, or development of these projects could be discontinued, due to the addition of this Proposed Rule to the PBR process.

CHESSA is not aware of any other permitting program that utilizes the ecological core assessment. CHESSA does not support testing novel regulatory requirements and analytical tools on the solar industry, especially when done without any direction from the General Assembly. As discussed throughout these comments, the solar industry is responding to clear policy directives from the General Assembly to develop tens of thousands of megawatts in the Commonwealth in a short period of time.

DEQ has proposed a drastic change to this regulatory program without any discernable cost-benefit analysis or apparent awareness of the impacts. The proposed ecological core analysis and mitigation requirements are therefore arbitrary and capricious.   

CHESSA recommends a modification to the proposed definition of “disturbance zone” – Proposed Rule 9VAC15-60-10

CHESSA opposes DEQ’s definition of “disturbance zone” under the current regulations and under the Proposed Rules:  

"Disturbance zone" means the area within the site directly impacted by land-disturbing activity, including construction and operation of the small solar energy project and within and 100 feet of from the boundary of the directly impacted area. 

CHESSA understands the intent is to capture areas actually disturbed (i.e., “directly impacted by land-disturbing activity”) by the construction of a solar facility. The actual definition is overly broad, however, and should be clarified to exclude areas not controlled by the applicant.   

The definition of “disturbance zone” is critically important. This definition could determine which projects are required to obtain a PBR.[11] The definition of disturbance zone would also be used to determine the areas that must be surveyed as part of the natural resources review process.[12]

CHESSA recommends that the disturbance zone be defined to include no more than 15 feet from the boundary of the directly impacted area.

CHESSA urges DEQ to consider the General Assembly’s public policy goals as expressed in the Virginia Clean Economy Act.

Since the conclusion of the RAP process, the General Assembly enacted the Virginia Clean Economy Act.[13] The VCEA represents the General Assembly’s most ambitious clean energy policy enactment to date. The VCEA is intended to remake Virginia’s energy economy by encouraging and mandating utility investments in renewable energy located in the Commonwealth. The VCEA includes a mandatory Renewable Portfolio Standard, which requires Virginia’s two largest electric utilities to meet increasing renewable energy procurement targets. Dominion Energy and Appalachian Power must reach 100% renewable energy by 2045 and 2050, respectively.

The VCEA also requires Dominion and Appalachian to add at least 16,700 MW of new solar and/or onshore wind generation by 2025.[14] Importantly, this new capacity must be located in the Commonwealth. CHESSA expects that most of this new renewable energy capacity will be developed by CHESSA members and permitted through DEQ’s PBR program.

CHESSA urges DEQ to consider this new policy when finalizing the solar PBR regulations. The VCEA is not only an invitation but a directive for the solar industry to begin developing projects in Virginia. DEQ’s Proposed Rules could increase total project fees by tens of thousands of dollars, not including annual maintenance fees. The new regulatory burdens proposed by DEQ will not only jeopardize individual projects, but the clean energy transition of the Commonwealth. In light of the clear public policy of the Commonwealth, CHESSA urges DEQ to avoid imposing excessive fees, or singling out the solar industry for untested, potentially project-killing regulatory requirements.  

CHESSA maintains that the solar PBR process was intended to be – and should remain – less burdensome than obtaining a CPCN from the SCC.

CHESSA is concerned that the Proposed Rules would impose additional regulatory requirements that could make the solar PBR more burdensome than obtaining a certificate of public convenience and necessity (“CPCN”) from the SCC. As DEQ has recognized,[15] the State Corporation Commission does not assess fees when issuing CPCNs for electric infrastructure such as power plants, transmission lines, or distribution facilities such as substations. The SCC, as Virginia’s primary energy regulatory agency, retains jurisdiction to permit utility-scale generation facilities of any size.[16] CHESSA believes that the PBR alternative was intended to be – and should remain – a less burdensome permitting option for projects that have minimal adverse effects on the environment and further the Commonwealth’s clean energy policies.

CHESSA recommends that DEQ provide additional time for the industry to comply with any new fees or regulatory requirements – Proposed Rule 9VAC15-60-40, 9VAC15-60-50, 9VAC15-60-55, 9VAC15-60-60 and 9VAC15-60-65.

Under the Proposed Rules, certain new regulatory requirements would not be imposed on project applications submitted within one year of the effective date of the new regulations. CHESSA appreciates DEQ’s proposal of a grandfathering provision and believes that using the application date will establish regulatory clarity. However, CHESSA urges DEQ to extend this period to at least two years. Solar development projects often take two to three years or more to complete, reflected in option agreement terms that are typically up to five years in length. CHESSA developers have made significant investments in projects in the form of option payments to landowners, environmental studies, interconnection studies, engineering studies, legal fees, and other diligence. CHESSA members have made these investments based on a financial model that will not hold under the new regulations. As a practical matter, the PBR is many times the last development task (other than non-discretionary building or electrical permits) for a project developer to issue notice to proceed. Thus, there is a large existing pipeline of projects currently under development that may not apply for the PBR within one year of the effective date of the final regulations as proposed by DEQ. These projects will experience a change of rules midstream with some projects unfairly penalized and other projects simply made non-viable. In some cases, project developers may have executed an offtake agreement (i.e., PPA) for the project before securing the PBR based on modeling of the current regulations.     

As a general rule, development projects in Virginia have been undertaken and financially modeled assuming a certain level of regulatory burden and expense. This has been done based on the current regulations. It is not appropriate to change the fundamental cost and viability parameters in midstream for these projects. CHESSA recommends that DEQ minimize this hardship by extending the grandfathering period for any new fees or regulatory requirements to a minimum of two years.

Thank you for the opportunity to comment on the proposed revisions to the Virginia’s Solar Permit By Rule.  We appreciated the opportunity to serve on the Regulatory Advisory Panel convened by DEQ to provide input on the revisions, and overall, The Nature Conservancy supports the revisions.  We do have refinements to suggest for a few specific provisions, outlined below.

The one-year delay in implementation of certain requirements gives time for developers to adjust to new requirements.  However, we are concerned that this delay could lead to a flood of incomplete applications being filed in order to avoid additional requirements.  Perhaps instead of the new requirements applying to applications “submitted after 12 months after the effective date of the amendments,” they could apply to “any application not deemed complete by DEQ by 12 months after the effective date of the amendments.”

We support the revised regulation’s requirement to mitigate for impacts to C1 and C2 ecological cores identified in the Virginia Natural Landscape Assessment.  We note however that due to their outstanding ecological condition, impacts to C1 and C2 cores are difficult to offset.  Ideally, this mitigation requirement will result in complete avoidance of these resources.  In the event that there are residual impacts after all feasible avoidance and minimization measures have been taken, applicants will need guidance to ensure that their proposed compensatory action constitutes an adequate offset.  We strongly recommend the establishment of such guidance based on methodologies developed by DCR for this purpose.

We support the intent to reduce barriers to developing solar projects on previously disturbed land as provided in proposed 9VAC15-60-130. However, we note that previously disturbed sites can recover and may currently support wildlife, heritage and cultural resources, and intact forest.  For example, several previously mined sites inventoried by DMME fall within the ConserveVirginia analysis of conservation priorities.  To address this, we recommend that language be modified to specify areas “where industrial or commercial activities ended within the last 50 years.”

Again, thank you for the opportunity to comment on the proposed revision to the solar Permit By Rule.  If you have any questions regarding these comments please contact Judy Dunscomb (jdunscomb@tnc.org) or Nikki Rovner (nrovner@tnc.org).

Dear Director Paylor,

Timmons Group would like to offer comments to the proposed amendments to the Virginia Permit by Rule for Small Solar Renewable Energy Projects. Our firm has assisted clients in preparing multiple Virginia Permit By Rule (PBR) Small Solar Renewable Energy Project applications and we work directly with the solar industry on permitting and regulatory issues. Our solar clients range from Virginia-based companies to international clients, and we are fortunate to have considerable experience within the Virginia permitting landscape. We offer comments with our perspective of compiling thousands of pages of PBR application materials for solar projects and facilitating the authorization of many of the previously issued PBR authorizations, as well as participation in all of the Regulatory Advisory Panel Meetings convened during 2019-2020. We would like to offer comments related to ecological cores and onsite surveys for natural heritage resources.

Ecological Cores

The proposed requirements (9VAC15-60-45 D 1 c, 9VAC 15-60-55 D, and 9VAC15-60-65 E) to utilize the Virginia Natural Landscape (VaNLA) Assessment of Ecological Cores to identify, and in the case of C1 and C2 ecological cores, require mitigation, is not based on data that is intended to be utilize for project-specific analysis and is not current.

The VaNLA is a “landscape-scale geospatial analysis” [1] that assessed land cover at a ratio scale of 1:50,000, meaning that the analysis was completed statewide at roughly a 0.8-mile (4,166’) resolution. VaNLA utilizes land cover data from the National Land Cover Database (NLCD) collected in 2011, thus the information that informs ecological core classification is currently ten years old. While the Virginia Department of Conservation and Recreation (VDCR) updated ecological cores in 2017, our understanding is that the data is based on NLCD from 2011.

As a result, we are aware of prospective projects wherein high core designations have been placed on lands that in reality have been recently cleared/timbered (before consideration of a potential solar facility). In other cases, lands historically utilized for silviculture have been designated with high core values, highlighting the lack of complex analysis used to associate ecological cores. This is because the 2011 NLCD identifies three forest types, none of which can be associated with silviculture operations.

The proposed regulations appear to require that even in cases where trees/habitat are no longer present on a property, or where trees have been cut as part of a silviculture operation, solar PBR applicants may be required to mitigate for lands designated as ecological cores by a GIS analysis not intended for site-specific analysis.

Additional detail on expected mitigation and how mitigation costs were calculated are necessary to evaluate the impact of this requirement on the regulated community. In the Department of Planning and Budget’s Economic Impact Analysis, a range of example ecological core mitigation costs is provided from $45,131 to $701,194. Given this broad range, developers need more clarity on how costs are calculated to fully understand the potential impact on projects.

Furthermore, as one of the benefits of the PBR process versus State Corporation Commission (SCC) Certificate of Public Convenience and Necessity (CPCN) is to reduce regulatory uncertainty, is there a similar requirement for ecological core assessment with the CPCN process? With potential mitigation costs in excess of $700,000, if this requirement does not apply to the CPCN process, it would be hard to imagine developers electing to permit through the PBR.

Onsite Surveys for Natural Heritage Resources

The requirement (9VAC15-60-45 D 1 d) to conduct onsite surveys for natural heritage resources recommended by the VDCR’s Division of Natural Heritage (DNH) introduces uncertainty into the regulatory process. As this is a new process and not previously required, and therefore many in the regulated community are not familiar, it will require extra time and cost to fulfil. We are aware that DNH correspondence can confuse applicants when confronted by an advisory agency recommending to the applicant to consider paying fees for analytical services that may be more suitable for the private sector to perform. As one of the benefits of the PBR process versus SCC is to reduce regulatory uncertainty, is there a similar requirement for onsite surveys of natural heritage resources with the SCC CPCN process?

We appreciate the opportunity to participate and provide comments.

Sincerely,

Julia Jenkins

Rick Thomas

Solar projects offer a tremendous economic opportunity to the pine forests in southside Virginia. Years ago, my family invested in lands like these and planted pine trees. There is now an enormous oversupply of pines in southeast Virginia and many other parts of the country, and the lands that grow pines tend not to be conducive to crop growing. It is absolutely absurd that the DEQ is proposing rules that would rob some of the state's most economically depressed regions of  promising economic opportunities, in a process that, I am sure, few landowners are aware of.

As a landowner (and farmer), I see solar as a promising way to generate reliable income while contributing to the state’s energy transition. With the General Assembly’s passage of the Virginia Clean Economy Act, the state obviously set ambitious goals for renewable energy. However, DEQ’s proposed amendments to the Small Renewable (Solar) Energy regulations seems to counter this effort by making it more difficult to site and develop solar projects—particularly the proposed rules listed under 9VAC15-60-55 that automatically find “significant adverse impacts” based on an imprecise map layer. Solar projects take years to develop, and these rules would hamper many that are currently in progress. These regulations should not be adopted, and certainly should not take effect for 3-4 years.

I am looking at the "ecological cores" map. These new rules would take away landowners' rights on thousands and thousands of acres across Virginia. This map includes two big tracts that we harvested timber on two years ago. Will harvesting trees also be banned?

Thank you for the opportunity to express my concerns with this proposed action.  My life as a child and an adult has centered around agricultural and and forest management.  Before my parents passed recently our immediate family had over 300 collective years of experience with land managed for farming and forestry.  Both Grandparents and One Great Grandparent also farmed and grew trees.  This may not qualify us as experts but when it comes to land and trees it is important and PERSONAL! Our family and businesses own timberland in 6 counties in Virginia.  It is well managed with BMP's, Best Management Plans and all is SFI, Sustainable Forestry Initiative, certified.  We have placed approximately 3000 acres in conservation easements.  We too care about the environment and we have put our money where our mouth is!!   There is much we could say about what trees do for the environment, water, air, stream management, recreation etc. but that is not the topic today.  During the last 15 months lumber prices have experienced historic increases however log prices are flat, stagnant.  We also operate a sawmill, planer, etc.  We know why lumber prices escalated.  New net works talk about this daily. February 24, 2021 The Wall Street Journal carried a 13 page article entitled " Lumber Prices Are Soaring.  Why Are Tree Growers Miserable ? Please read this article.  Basically in Virginia simple economics more supply than demand.  We are growing more trees than demand and use requires.  We have managed only because sister operations are buying and processing the logs.  Many landowners are sitting on trees that need to be thinned and or cut. They are waiting for demand to improve.  Our Virginia Timber is not like the West Coast Trees.  It has a limited life span and is subject to decay, disease, infestation as we humans are.  We are also solar farming as well and have had 2 farms in production since 2016 and 2017, two of the first in Virginia of this scale and the first in Virginia to have battery storage installed.  This opportunity allows us to keep land in the family and diversify our business model and generate clean renewable energy that provides benefits to the localities and to the state.  If you have not visited a solar farm, invite you to do so.  When battery storage improves it will be a game changer for solar power.  It will be cheaper by far, the source of fuel is free, it is clean, requires minimal cost of labor once built.  It is renewable energy that makes real sense not smoke and mirrors.   The timing of this proposed regulatory rules seems so contrary and arbitrary to the aggressive Biden administration green energy proposals and those of our Governor and those of Dominion as well.  This does not make sense.  America has been the world's "bread basket".  Would you prefer to use our farmlands for solar?  Farmland has a higher value than tree farms and we can sell our agricultural products both domestically and abroad.  Tree Farmers do not have this base of markets. We oppose any arbitrary rule that limits our my family's ability to use our land in its best and highest value and use.  DEQ  should not be "picking" winners and losers for renewal energy.  Having decades and generations of land management this proposed rule will not contribute to our state environmental and economic security and fiscal stability.   I served on the DEQ Air Board for 12 years and valued this opportunity.  I learned much and one of my basic questions and concerns was " Are we balancing real costs of regulations with the desired and needed improvement in air quality.  This propose regulation does not do this.  Thank you for the opportunity to express our concerns.

Localities in Virginia have rejected solar farms because of concerns about "prime farmland", and losing productive cropland. Last month a project was denied because losing forty acres of farmland would "upset the agricultural balance".

Solar on rooftops and brownfields will not make a dent in the ambitious goals of the Virginia Clean Economy Act. The proposed updated rules include a restriction on building projects in C1 and C2 ecological cores. These cores include large tracts of planted pine trees that have been managed, cut, and regrown. In its description of ecological cores, the DCR touts the benefits of the ecological cores: open space, drinking water protection, carbon sequestration, economic benefits. Solar projects are consistent with all of these concepts.

The proposed rules would create unwarranted obstacles in meeting the Commonwealth's goals for the adoption of clean energy.