Pushing for Permits
Time, money and patience are perhaps the three most essential resources that a developer going through the permitting/approval process should have. Of course, each project is different and each state’s requirements may vary. Some developers discover that the entire process is much more difficult, complicated and time-consuming than initially anticipated, leaving them frustrated, unprepared and set back, and in some cases, regretting their decision to move forward with a project. In other cases, developers find themselves sailing through the process without much of a hitch.
The process is especially difficult if the developer is using innovative technology, as is the case with James Taylor, president and CEO of Taylor Biomass Energy LLC, which broke ground on a 20-megawatt biomass gasification plant in Montgomery, N.Y., in early December. Taylor says it took him five years to gain all of the necessary approvals and permits for the garbage-to-energy plant, more time than he ever imagined it would take. He started the process in 2006, and completed phase one approvals in 2010.
Taylor, who also owns a recycling business with which the biomass plant will be co-located, describes his experience as “an exhaustive, draining and sometimes duplicative process.” Not to mention costly. The final permitting price tag ran him about $3 million.
Taylor wishes that before embarking on the process he had better understood the changes in regulations that would occur over the years. “I didn’t truly understand how much government has grown, and how many new requirements exist,” he says.
Local approvals were the toughest to get, Taylor says. Though public opposition or NIMBYism (not in my backyard) sometimes plays a role in achieving local approval, he says it really wasn’t the case in his situation. “There was no real opposition,” Taylor says. “In fact, most public turnouts were strongly in favor of approval of the project. I truly believe it was elected officials who were afraid to be in support of a project that they thought would hurt them instead of the opposite.”
Mostly Sunshine in Florida
On the flip side, Rick Jenson, CEO of Florida Biomass Energy LLC, says he had a few setbacks when getting his 60-megawatt waste wood/vegetative waste-fired plant permitted, but his overall experience was positive.
Unlike Taylor Biomass, Florida Biomass Energy is using time-tested technology. Jensen says he has been working on the project, which is in Manatee County in southwestern Florida, for about two years and has all necessary permits in line. “We were actually permitted within about a year, but unfortunately, Florida has a statute called the Administrative Producers Act, which allows any individual in the state of Florida to challenge any project,” Jensen says. “We had a nearby individual who decided to challenge the project—not based on any merits but based on personal gain—so that set us back a good nine months. His first challenge was in November 2009, and it wasn’t resolved until October the next year, so it was about a 12-month slow-down, unfortunately.”
Luckily, the situation ended in the biomass company’s favor. Jensen notes that it’s important for a developer to expect and be prepared for setbacks such as the one he faced. “It was resolved and we’re moving forward, but that really was an anomaly,” he says. “Unfortunately, most developers do have something like that they run into.”
In his opinion, many problems developers face are often self-created. “The truth is that when you go in for development, there are both federal and state regulations for permitting and what’s allowed, and up until recently, developers have gone in trying to achieve the bare minimum in terms of standards. This creates challenges and difficulties along the way.”
Like Taylor, Jensen says all of the different level of approvals required can be challenging and confusing because there is a lot of overlap. “It makes it a little more difficult in managing the process,” he says. States are working to make improvements though, including Florida, he points out. “The state has recently stepped up and is focused on combining some of the processes,” he says.
“For the APA, in which we were recently challenged—on multiple fronts including our zoning, our comprehensive land-use change, our air permit and on our power purchase agreement with the Public Service Commission— each was an individual action that we had to address and defend separately. They recently implemented some new statutes in Florida where all challenges will be combined into a single-hearing, a single-challenge review. It’s an expedited action, and that will help tremendously in moving the process forward quickly.”
Getting Florida Biomass Energy permitted was an overall positive experience for the company, other than the project challenge, and Jensen attributes that to the attitude of the state of Florida. “They are pro-business,” he says. “The staff and folks in Florida were very supportive, and overall we had a good experience from a permitting standpoint, and that’s working with multiple agencies.”
With all permits in hand, Florida Biomass Energy is now nearly ready to break ground. “We’re keeping our fingers crossed that we’ll be able to obtain financing soon,” Jensen says. “We went into full financing mode in the end of 2010, and we hope to obtain it and be able to break ground in the second quarter of 2011.”
If that happens, the company plans to take advantage of the federal 1603 Program. “So far, we’re moving in that direction, and that’s our goal,” he says.
Permitting in the Beaver State
While Oregon is a biomass-friendly state, it takes quite a bit of time to gain all of the necessary permits for a project; the key permits being air, water and zoning/land use, according to Robert Broberg, president of Biogreen Sustainable Energy Co. Biogreen is developing a 25-megawatt, wood-fired biomass power plant in the city of La Pine in central Oregon.
Overall, it took the company about 20 months to acquire its permits at a cost of about $2 million. Broberg points out that this is the company’s first plant, and as with any first run at something, costs usually run higher than second or third attempts. The company estimates the total project will cost between $68 million and $75 million.
For the most part, Broberg says the process went pretty well. “We engaged the public early and built a solid rapport with them, and this was key to moving the project through,” he says. “We also were fortunate to have very good consultants and attorneys working on the air, water and land-use critical path items.”
Development in Oregon hasn’t been without its setbacks, however. “One problem that arose was a LUBA (Land Use Board of Appeals) appeal, which had nothing to do with the actual citizens of La Pine,” he says. “It was a result of outside interests and agendas. Going through the land-use process was the most difficult part of the whole process.”
The La Pine city council rejected an appeal of the project in December. In Oregon, a LUBA appeal can be filed by a person, organization or corporation dissatisfied with the land-use decision or limited land-use decision made by the local government or special district. It is cheap to do, only costing a petitioner $400 to file the appeal, plus attorney costs if one is hired. “I think the only thing that needs a hard look at [in Oregon’s permitting process] is the issue of standing in a land-use appeal,” Broberg says. “Currently, anyone anywhere can appeal a land-use decision for any reason and it hardly costs them anything. These appeals should be reserved for citizens the project would actually affect. [The state] would see a lot more development if this issue was resolved.”
Fortunately for the developers who have positive outcomes, LUBA requires the losing party of an appeal to reimburse the winning party for certain costs incurred during the process.
Now past that setback and having all necessary permits in hand, Biogreen plans to break ground as early as this spring.
Words from the Wise
On advice to other developers, Taylor recommends making sure a developer is ready to deal with what could be a lengthy and stressful process. “Ask yourself, do you really want to do this?”
Broberg believes the most beneficial move a developer can make when going through the permitting process is to engage the help of experts. “Hire good consultants and permitting specialists with a lot of experience,” he says.
Jensen warns developers not to skate under the minimum thresholds. “Try to develop a project that truly is an asset to the community, not just a money-making entity for the developers and investors because the people you’re working with at all levels—the community and the state, and those on local and federal levels—they’ll see what you’re doing, and they’re smart people,” he says.
Jensen says if developers who did that took a different angle going into a project, it could streamline the permitting process. “Our philosophy as a company is not to just go in green, but go in clean and green, so we went in as clean as possible. People were more willing to accept our project, and they were more willing to help us move our project forward because they saw us as trying to do something positive, rather than trying to skate by with the minimum standards.”
The reason that isn’t always done is because of costs, Jensen says. “It does cost more to be cleaner.”
Author: Anna Austin
Associate Editor, Biomass Power & Thermal