California Energy Commission Releases Draft Permitting Roadmap for Offshore Wind Development and Report on Economic Benefits of Offshore Wind

January 4, 2023

The California Energy Commission (CEC) recently released drafts of two key work products required by AB 525: a Conceptual Permitting Roadmap and a Report on the Preliminary Assessment of Economic Benefits of Offshore Wind Related to Seaport Investments and Workforce Development Needs and Standards. The publication of these two draft documents comes on the heels of the Bureau of Ocean Energy Management’s (BOEM) historic first lease auction for the Wind Energy Areas off California’s coast in federal waters.

Conceptual Permitting Roadmap

The conceptual permitting roadmap provides an overview of the required federal, state, and local permitting requirements for offshore wind development and outlines a comprehensive approach for permitting agencies to work in coordination with one another. The permitting roadmap is characterized as “conceptual” to acknowledge that there are still many unknowns. It is meant to be a dynamic document that can be updated as new information emerges about project details, timing, environmental review requirements, transmission, ports and waterfront facilities, and other opportunities for agency collaboration. The permitting roadmap specifically focuses on permitting requirements in the site assessment and construction and operations phases.

In the site assessment phase, individual lessees undertake activities to characterize the lease site, such as resource assessment surveys and technology testing. Lessees must first develop preliminary plans, including a site assessment plan (SAP) and several communications plans required by the lease documents (including a Fisheries Communications Plan, Native American Tribes Communications Plan, and Agency Communication Plan). BOEM will conduct additional environmental review before approving the SAP. BOEM review could potentially trigger additional review by the California Coastal Commission under the Coastal Zone Management Act (CZMA). Site assessment activities may also require additional permits from the California State Lands Commissions (SLC) and the California Department of Fish and Wildlife (CDFW).

Before any construction activities, a lessee must develop a construction and operations plan (COP) subject to BOEM approval. BOEM will review the COP under the National Environmental Policy Act (NEPA). Lessees may request to participate in the FAST-41 process, which is a program developed under the federal Fixing America’s Surface Transportation Act to coordinate review and oversight among several federal agencies for qualifying projects. Lessees may also require approvals from other federal agencies that include the Department of Homeland Security, Coast Guard; Department of Defense, Army Corps of Engineers; Department of Transportation, Federal Aviation Administration; Environmental Protection Agency; and Department of Commerce, National Oceanic and Atmospheric Administration.

In the construction and operations phase, state and local permitting will play a much larger role as the wind projects’ transmission cables will inevitably pass through State waters and connect to onshore infrastructure. State permitting processes require compliance with the California Environmental Quality Act (CEQA) prior to decisions on any discretionary permits. The major state environmental review and permitting will be tied to the lessee’s application for a lease from the SLC or local trustee of granted public trust lands. The SLC will likely serve as the lead agency under CEQA and prepare an Environmental Impact Report (EIR) or other required CEQA document. The permitting roadmap notes there may be opportunities for joint CEQA–NEPA review. Lessees may require state and local entitlements or authorizations from the SLC, CDFW, Coastal Commission, California Independent System Operator, California Public Utilities Commission, one or more regional grantee agencies (e.g., City of Arcata, City of Eureka, City of Morro Bay, Humboldt Bay Harbor, Recreation, & Conservation District, Port San Luis Harbor District (Avila Beach), the County of San Luis Obispo, Humboldt County), and possibly others.

The permitting roadmap recommends that agencies develop interagency memoranda of understanding/agreements and coordination plans. California state agencies have coordinated and collaborated with local and federal agencies on planning for offshore wind to this point, and the permitting roadmap envisions formalized federal, state, and local agency relationships through inter-agency agreements. Agencies will work together to determine who does what by when, and how, taking into account unique needs and entitlements for the north coast and central coast projects.  The permitting roadmap envisions that permitting agencies will commit to processes for efficient permitting, including implementing project-specific permitting schedules; developing an integrated process for submittal and review of application materials; and establishing a Joint Review Panel for CEQA review.

Report on the Preliminary Assessment of Economic Benefits of Offshore Wind

The Commission report acknowledges that ports and waterfront facilities, such as piers and wharves, will be essential for supporting the new offshore wind industry in California based on floating technology. The new industry will support a new workforce to manufacture, assemble, install, operate, and maintain offshore wind turbines and related components. In addition to job growth, economic benefits may include business output and sales; increased Gross Domestic Product (GDP) or Gross State Product (GSP); increased wages; and increased tax revenue (including property taxes on land improvements, sales tax on personal consumption and offshore wind capital expenditures, and corporate taxes on value added in regional supply chains). The offshore wind industry is expected to have the greatest impact at the local and regional levels, but benefits would be realized across the state.

The report finds that to capture these benefits, significant investments in ports and waterfront facilities will be required because presently California ports may not be able to handle all the required activities to support industry development. The report notes that the state has already made early investments to prepare port infrastructure that can support offshore wind activities.

Finally, the report addresses needs, standards, and requirements for an offshore wind workforce. To support the industry, different types of apprenticeship, safety requirements, and training programs will be required to prepare the workforce. Investments in apprenticeship programs such as carpentry, fabricated metal products, and transportation equipment may be key in preparing the workforce.

The CEC held two public workshops on the draft documents on December 15, 2022, and will be accepting public comments on both documents until February 8, 2023.  The release of both draft documents represents progress toward meeting AB 525 mandates, and California is well on its way in preparing for wind development off its coast.