Oregon Department of Energy staff are ignoring state administrative rules, requirements laid out in an Energy Facility Siting Council project authorization and facts on the ground to help developers of a proposed natural gas plant in Umatilla County meet a deadline to begin construction.
Meeting that deadline, critics say, would allow developers to avoid millions of dollars in extra carbon emission fees under global warming standards that Gov. Kate Brown strengthened earlier this year.
To meet the regulatory deadline, developers of the proposed Perennial WindChaser plant started clearing land for a road at the site near Hermiston last month. But they did so illegally, without first obtaining a required stormwater erosion permit from the Department of Environmental Quality.
The Department of Energy, which staffs the state’s Energy Facility Siting Council, says the lack of that permit — identified as a construction requirement in the council’s project authorization — has no bearing on whether the company met the deadline.
“The applicant can meet the construction start deadline without it,” said Jennifer Kalez, a spokeswoman for the agency. “If they then begin construction without a permit that DEQ considers necessary, that is a compliance issue with DEQ.”
That conclusion in only one of several questionable steps that the agency, which operates under the executive authority of Brown, has taken to facilitate development of the plant. The governor’s office says she “expects agencies to apply and uphold all regulations and requirements to protect Oregon’s air, land, and water resources in siting new energy facilities.”
But it’s far from clear that’s taking place for this and other projects, prompting critics to say the agency has gone rogue. They speculate that Perennial is gambling that the cost of any enforcement action by the Department of Environmental Quality would be a tiny fraction of the increase in carbon fees it would owe if forced to seek an extension of its approval by the council.
Perennial officials did not reply to an email requesting comment. Meanwhile, Columbia Riverkeeper, a conservation group, has formally threatened to sue the company, a wholly owned unit of Sumitomo Corp., under the federal Clean Water Act.
“We are flabbergasted that, at the invitation of the ODOE, the Perennial fracked gas plant rushed to begin construction without a key stormwater permit, in direct violation of both its site certificate and the Clean Water Act,” said Erin Saylor, staff attorney for Columbia Riverkeeper. “ODOE needs to stop bending rules for this major new source of climate-altering pollution.”
The 415-megwatt Perennial WindChaser gas plant has been on the drawing board for years. It would be a peaking facility, designed to operate a limited number of hours per year to respond to fluctuating demand and supply conditions. It would provide electricity, for instance, when wind farms aren’t generating power.
While they provide operational flexibility, such facilities are less efficient than so-called base load plants because they burn more gas and generate higher emissions relative to their output. The company says the facility would emit nearly 1.1 million tons of carbon dioxide and equivalents annually. That would make the plant one of the largest stationary sources of greenhouse gases in the state, surpassed by only a few other power plants.
After a Republican walkout killed climate change legislation this spring, the governor issued an executive order updating state carbon reduction goals and directing state agencies to enact policies to meet them. The energy department subsequently raised the carbon offset fees for large polluters by 50%.
Back in August, conservation groups argued that Perennial couldn’t begin construction because it hadn’t satisfied conditions in the council’s approval. Developers hadn’t completed wildlife and vegetation surveys for the site required by the Oregon Department of Fish and Wildlife. Moreover, they didn’t have an air quality permit from the Department of Environmental Quality. Both are specifically cited as construction conditions in the council’s approval of the project, called a site certificate.
The council originally approved the plant’s site certificate in 2015, and at the company’s request, amended that approval in November 2019 to extend its deadline to start construction — defined as spending $250,000 on the development — to Sept. 23.
But the council’s final order on the 2019 amendment noted that even if the council amends the site certificate to extend the construction commencement date to Sept. 23, Perennial “would not be able to commence facility construction without a valid DEQ permit.”
Moreover, Oregon Administrative Rules clearly state that certificate holders “may not begin construction … or create a clearing on any part of the site until the certificate holder has construction rights on all parts of the site.”
The governor’s office told The Oregonian in August that Brown was committed to ensuring the state was doing everything to limit greenhouse emissions. “If we don’t take action now, it is the next generation that will pay the price,” said Nikki Fisher, a spokeswoman for her office.
“That is why Gov. Brown expects all energy facilities in Oregon to strictly adhere to the requirements of state law, including the CO2 standard for new power plants. Our office has asked ODOE to review this issue to ensure that the facility in question meets the conditions of its site certificate.”
Yet staff at the Department of Energy, led by division administrator Todd Cornett, dismissed Columbia Riverkeeper’s concerns. They said the group’s definition of construction rights was overly broad.
Jennifer Kalez, an energy department spokeswoman, told The Oregonian in early September that the air contaminant permit was “not a ‘construction right,’ which is about whether the certificate holder has ownership or lease rights so they can legally engage in construction on the site. The rules do not state that the certificate holder must have every permit and approval necessary to build every aspect of the facility.”
Staff also appear to have invented a concept — phased construction — that is not contemplated in Perennial’s site certificate, which describes the road as part of the overall facility. Nevertheless, staff determined the road was “phase 1” of construction, allowing Perennial to move forward with building a road to satisfy the Sept. 23 construction deadline without the approvals to build the plant.
Energy department officials said in August that the company would still have to meet “pre-construction” requirements to start building the road. Kalez said in an email last week that “they met those conditions and started construction last month.”
It’s not clear how. The site certificate also requires Perennial to obtain “all necessary federal, state and local permits required for construction,” and “before beginning construction…provide confirmation in writing” that its contractors had obtained all necessary permits or approvals.”
The Department of Environmental Quality confirmed last week that the developer does not have the necessary stormwater permit to start construction on a road at the site. That specific permit is a construction condition in the company’s site certificate from the Energy Facility Siting Council.
Harry Esteve, a spokesman for the Department of Environmental Quality, said a company representative had contacted the agency last week to say they were ceasing road construction and would be submitting an erosion and sediment control plan. That would trigger a 14-day public comment process. Esteve said the agency was looking at the facts and impacts so far to determine whether it would trigger a letter of warning or an enforcement action.
Energy department officials now say while the stormwater permit was a “construction condition,” it was not a “pre-construction” condition, and that such federally-delegated permits are outside the jurisdiction of the siting council.
“This is a compliance matter and ODOE will work closely with DEQ to determine whether the certificate holder is out of compliance with the DEQ stormwater requirements,” Kalez said. “If so, ODOE could potentially take compliance action against the developer for not meeting its Site Certificate construction requirements. But again, this is separate from their pre-construction conditions.”
Dan Serres, conservation director for Columbia Riverkeeper, described the agency’s actions as outrageous.
“We thought Perennial would break the conditions of the site certificate, but they broke the law,” he said. “Now, unbelievably, the Oregon Department of Energy is going to argue that they met the terms of the site certificate. Someone needs to investigate the behavior of this agency. If it isn’t prepared to help Oregon meet its climate goals or apply the site certificate that they themselves wrote, then someone else needs to step in and correct this.”
This is hardly the first time the agency or the siting council has faced scrutiny for ignoring its own rules when it comes to energy development. The agency’s management dysfunction, lack of financial controls and non-existent due diligence when managing the $1 billion dollar Business Energy Tax Credit program had lawmakers considering whether to dissolve it altogether.
The staff for the siting council are a separate division, but have also been regularly criticized for ignoring public input and writing rules that allow Department of Energy staff to decide which applications get public hearings and which can be formally contested by the public.
Earlier this month, several conservation groups filed for judicial review of the department’s actions on the Summit Ridge Wind Farm in Wasco County. Among other things, they claim the department allowed backers of that project to make improvements to a private road to demonstrate that it had satisfied “phase 1” construction requirement on that facility.
“No statute or regulation authorizes ‘phased construction,’” said Nathan Baker, senior staff attorney with Friends of the Columbia River Gorge. “Even assuming phased construction could potentially be allowed, it would have to be proposed by an applicant and approved by the Council (not the ODOE staff) and incorporated into the terms and conditions of the site certificate. With both Perennial and Summit Ridge, that never happened.”
The governor’s office did not respond to specific questions submitted this week about whether the department was following its rules, and whether she would take any action to hold it accountable.
“If the developer is found to be out of compliance for failure to secure a storm water permit, the Governor expects agencies to pursue all possible enforcement actions,” said Charles Boyle, a spokesman for Brown. “This is especially true if the developer is found to have deliberately engaged in such actions to avoid falling under the state’s updated CO2 rules.”