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About The Author:

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions.

He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
(603) 225-9716









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STATELINE by Robert Olson

February 2002

Virginia State Corporation Commission (SCC) Considers the Cumulative Environmental Impact
Of Proposed Generating Facilities

by Robert Olson  --   Brown, Olson and Wilson, P.C.
(originally published by PMA OnLine Magazine: 2002/03/09)

The Virginia SCC issued two orders recently addressing the issue of whether the environmental impact of proposed new electric generating facilities should be evaluated cumulatively with the impact of other proposed facilities. Both orders indicate a policy shift in favor of such a cumulative evaluation. In the first order involving new facilities’ filing requirements ("Rules Order"), the SCC published proposed rules for review and comment, which would require applications for approval of new generating facilities to address the cumulative environmental impact of the proposed facility together with that of other proposed facilities. The second order involved the request of a company known as Tenaska for a certificate of public convenience and necessity ("Tenaska Order"). This order remanded the pending application to the hearing examiner for consideration of the cumulative environmental impact issue. The SCC remanded the pending application, notwithstanding that the period for public comment established in the Rules Order still remained open. Thus, in practice, it appears that a cumulative environmental impact analysis may now be required with any application for a new generating facility.

According to the Rules Order, a cumulative evaluation of environmental impacts is needed because of a dramatic increase in proposed generating facilities. The order notes that "[P]ower plants with a total capacity of approximately 20,000 megawatts" presently exist in Virginia, and "were constructed over the last half-century." Thirty or so new power plants representing another 20,000 megawatts of capacity are proposed for construction. Recognizing that not all of the proposed plants would actually be constructed, the rapid increase in new generating facilities may still cumulatively give rise to harmful environmental impacts, even if the new facilities, viewed individually, would not exceed acceptable thresholds.

The SCC attributes the dramatic increase in pro-posed generating facilities to two factors: 1) the elimination under Virginia state law of the requirement that new applicants demonstrate a need for the proposed project, and 2) the Federal Energy Regulatory Commission’s ("FERC") efforts "in providing ‘open access’ for electricity transmission and developing competition in wholesale markets." In the past, as a result of the "need" requirement, new projects were brought on line incrementally and were geographically dispersed. Absent the "need" requirement, and under the influence of the FERC’s initiatives, "[Virginia], like much of the nation, has been inundated with proposed power plant projects." The Rules Order points to Kentucky, Tennessee, Maryland and Georgia as facing similar challenges regarding cumulative environmental impacts.

In view of the rise in new construction and the resulting risk of cumulative environmental impacts, the SCC’s proposed rules would require applicants to produce data concerning the cumulative effect of the proposed facil-ity and "other proposed facilities" on both air and water quality. "[Other] proposed facilities" is intended to encom-pass "all proposed facilities that require air permits (not just electric plants)" for which "there has been significant action taken toward development (zoning, permitting, etc.)." Simi-lar rules are proposed as to cumulative impacts on water sources, and take into account both water quality and water levels.

In the Rules Order and, especially, the subsequent Tenaska Order, the SCC seems to view the cumulative environmental impact issue with a sense of urgency. Although the Rules Order gives interested parties until May 24, 2002 to request a hearing, the SCC put applicants on notice that the issue of cumulative environmental impacts would be addressed in presently pending cases. The SCC followed through with this plan in the Tenaska Order. In that case, the hearing examiner questioned the sufficiency of the Virginia Depart-ment of Environmental Quality’s ("DEQ") air quality analy-sis as related to a proposed generating facility, because it did not take into account either the existing air quality or the other pollution sources in the area. The hearing examiner recommended that the SCC direct its staff to discuss pos-sible enhancements to DEQ’s air quality analysis for the next generating facility application. Instead, the SCC remanded the matter with instructions to further develop the record and make recommendations on those issues as to the pending application. Referring to the Rule Order, the SCC stated that "[w]e cannot . . . wait on the final order in that rulemaking to address this matter. As noted above, eleven applications are now pending and more are on the way. We must act now."

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions. He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive, Suite 301
Concord, NH 03301 | (603) 225-9716

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