Report 2001-118 Summary - August 2001

California Energy Commission: Although External Factors Have Caused Delays in Its Approval of Sites, Its Application Process Is Reasonable

HIGHLIGHTS

Our review of the California Energy Commission's (energy commission) siting and approval process revealed that:

RESULTS IN BRIEF

Concerns have been raised about the inability of the State Energy Resources Conservation and Development Commission (energy commission) to approve applications for the siting of power plants—known as Applications for Certification (applications)—in a timely manner. These concerns have intensified recently because of California's energy crisis. It is true that the energy commission has not always approved applications within the standard 12-month period. For 10 (43 percent) of the 23 applications approved since 1990, the energy commission missed the 12-month standard for approval by more than 30 days. Although the energy commission is ultimately responsible for the approval process, multiple factors contributed to the delays for most of these 10 projects and some of the delays were outside the energy commission's control. For all of the 10 applications that were approved late, applicants did not submit some of the required information in a timely manner. For 7 of these applications, other local, federal, and state agencies failed to process approvals promptly. In addition, outside parties raised objections to some of the proposed sites, thus delaying the approval of 3 applications. Finally, for 7 of the applications the energy commission held public workshops well beyond its 180-day standard. However, because the energy commission continued to attempt to resolve all outstanding issues while waiting for other agencies to issue their final decisions, the average approval time for applications over the past 11 years was 14 months, only 2 months beyond the 12-month standard.

In addition to the 23 applications it has approved since 1990, the energy commission has also performed various levels of review on 13 other power plant applications. However, the developers withdrew these applications before the energy commission completed its reviews. Although the staff resources devoted to reviewing these applications may have had some effect on the energy commission's ability to approve other projects within the required time frame, we do not believe the impact was significant on recent projects.

The energy commission's process for approving applications is comparable to those used by four of five states we surveyed. Our review of Minnesota, Texas, Florida, Connecticut, and Oregon suggested that, with the exception of Texas, the tasks performed by each state when approving applications were generally similar. Of the four comparable states, only Oregon took longer than California to approve applications. Minnesota, Florida, and Connecticut each averaged approval times of between 7 and 15 months, Oregon averaged 30 months, and the California energy commission averaged nearly 17 months—2.5 months to assess the adequacy of the application and more than 14 months to approve it. However, when we omit from these calculations three projects that involved serious emissions concerns, the energy commission's average approval time decreases to 15 months.

The energy commission's process is more efficient than other permitting processes in California. The California Environmental Quality Act and the Permit Streamlining Act allow up to 24 months for the approval of similar types of projects. The energy commission is able to approve projects more quickly because it combines activities that are performed consecutively under these other processes.

In addition to its standard 12-month siting process, the energy commission recently implemented three expedited siting processes of varying lengths: 6 months for thermal power plants with no adverse environmental impacts, 4 months for simple cycle facilities, and 21 days for plants that would produce extra electricity during peak times. The intent was to accelerate the construction of power plants in response to the threat of potentially serious electricity shortages over the next few years. It is too early to tell how effective the 6- and 4-month processes will be, as only 1 application has been approved under either of these processes. On the other hand, 11 applications have been approved under the 21-day process, and the energy commission expects that 10 of these projects—1 project has since been withdrawn—will add over 850 megawatts of electricity to the State's supply by the end of September 2001.

RECOMMENDATIONS

To encourage applicants to submit sufficient data in a timely manner, the energy commission should exercise its authority to terminate applications when the applicant does not appropriately respond to requests for data.

To assist the energy commission in its efforts to approve applications within a 12- month period, it should also more strictly enforce its standard that limits to 180 days the time allowed for parties to raise new issues and submit additional requests for data. Moreover, the Legislature should consider establishing a firm 180-day deadline for parties to raise issues and request data.

To ensure that the expedited 6- and 4-month processes are effective and to determine their long-term viability, the energy commission should evaluate the success of these new processes after a sufficient time.

AGENCY COMMENTS

The agency did not have any significant concerns with the audit report and believes it accurately portrays the issues that influence the time required to review applications for energy facilities.