RAPID/Best Practices/Purpose and Need

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RAPID

Regulatory and Permitting Information Desktop Toolkit

Best Practice: Purpose and Need

Disclaimer: This white paper contains general information related to the National Environmental Policy Act of 1969. It is not intended to comprise legal advice and accordingly must not be treated as such. The information contained herein is provided without any representation of warranties, express or implied. Utilization of the information contained herein does not create any relationship, express or implied, between a user of this document and the creators of this document. You must not rely on the information contained herein as an alternative to legal advice from a licensed professional legal service provider. If you have any questions about any legal matter raised in this document, resolution of such questions should be sought from an attorney or other licensed legal professional.


A clear and comprehensive purpose and need statement is a critical component of any energy project. The purpose and need identifies why the Federal agency is responding to the project being proposed, and provides the foundations of a defensible National Environmental Policy Act of 1969 (NEPA) analysis process. The purpose and need statement is intended to drive the organization and structure of the entire environmental analysis, and may be the first thing scrutinized if there is opposition that results in litigation.

A purpose and need statement is included in the written analysis required for NEPA compliance. Similar statements may be required for other local and state permitting processes, and the guidance in this web page may be used for any type of energy-related purpose and need statement.

Key Strategies

  • A clear and comprehensive purpose and need statement is a critical component of any energy project.
  • The statement shall briefly specify the underlying purpose and need to which the [federal] agency is responding in proposing the alternatives including the proposed action.
  • The purpose states concisely and clearly why the undertaking is being proposed, and articulates the intended positive outcomes of the project.
  • The need describes the problem(s) to be addressed by the project, defines the causes of the existing problems to be met and provides factual and quantifiable data to defend the need. The need also may highlight opportunities that could be realized by the project.

Best Practice Actions

Agency

  • Federal agencies conducting environmental reviews under NEPA will develop a purpose and need statement for the project specific to the NEPA process. The lead agency’s statement specifically identifies the reason for the agency’s involvement in the project and the legal or regulatory responsibilities that the agency must meet, or as typically referred to in the industry, as the NEPA “nexus” or “trigger.”
  • Cooperating agencies also may provide purpose and need statements in a NEPA document. Like the lead agency’s purpose and need statement, these must address the agency’s specific regulatory authority.

Proponent

  • It is important to keep the need clear and concise so that the project’s scope of alternatives does not become too large. It is also important that the statement is not too restrictive so that the lead agency may have a range of alternatives to consider.
  • Upfront planning and analysis for vulnerability of a purpose and need statement is time well spent, and can save a proponent and federal agency time, money, and effort.

Challenges

Unclear purpose and need statements can misdirect NEPA analysis authors and analysts resulting in the expenditure of thousands of dollars and can cause detrimental impact to the project schedule. According to a Government Accountability Office (GAO) report published in 2014, the CEQ estimates that approximately 1 percent of all NEPA analyses are EISs, and these projects are likely to be high-profile, complex, and expensive, raising the stakes of performance.[1] According to the same GAO report and U.S. Department of Energy (DOE) data, the median EIS contractor cost for calendar years 2003 through 2012 was $1.4 million. For context, a 2003 task force[1] report to CEQ estimated that a typical EIS costs from $250,000 to $2 million and takes multiple years to complete, and that is without litigation which can drive up costs and extend the NEPA analysis schedule.[1] It is clear that much time and money is at stake and the EIS analysis for a project must stand on the cornerstone of a strong purpose and need statement. Some common pitfalls include, as discussed above, crafting a purpose and need that is too restrictive or too open. A restrictive purpose and need statement makes it difficult to generate alternatives, leaving few to none to include in the alternatives analysis. Too vague of a purpose and need statement can open the door for endless alternatives, and lead to a seemingly never-ending cycle of documentation and analysis. Here are examples:

Restrictive Statement: The proponent’s purpose is to build a new 345-kV transmission line between Denver and Cheyenne that follows the I-25 corridor.

  • Specifies too narrowly the “what” and “where” and can only be met by the specifically proposed project providing no alternatives. Can be deemed pre-decisional (a serious legal challenge to the NEPA process) if the proponent’s project is the only proposal that can meet this statement.

Open Statement: The proponent’s purpose and need is to provide reliable electricity to Cheyenne.

  • Could be met by endless alternatives outside the scope of the proposed project and related NEPA analysis including building a wind farm near Cheyenne, providing electricity from another location, delivering coal to a power plant in Cheyenne via rail, etc.

An overly technical, convoluted, or confusing purpose and need statement may be unrecognizable to the general public and may lead to re-scoping a project if the statement must be re-written, which in turn would lead to protraction of the NEPA inquiry. Likewise, if a purpose and need statement provides insufficient justification ideally based on data, a project may have to go back to scoping or back to the drawing board to readjust and define a strong need for the project. These and other factors may cause schedule delays, waste labor-hours and resources, result in developing insufficient solutions for the ill-composed need, and potentially lead to litigation.

NEPA challenges are filed for various reasons, often as a result of inadequate and incomplete information contained in the NEPA filing. Purpose and need driven NEPA challenges can be based on the purpose and need being too narrow, as discussed above. The argument against an overly restrictive purpose and need statement is that with a narrow range of alternatives, the agency is circumventing the NEPA requirements for an alternatives analysis.[2] Challenges to the proponent’s purpose and need generally result in litigation, depending on how controversial a project may be.

The costs associated with litigation can escalate budgets and severely delay project schedules. Caution, attention, and great care should be taken when developing this seemingly simple, but important piece of the NEPA analysis. Upfront planning and analysis for vulnerability of a purpose and need statement is time well spent, and can save a proponent and federal agency time, money, and effort.


Examples

Here are two examples of good purpose and need statements; one for a wind farm and transmission interconnection and the other is for a transmission project. These examples address various triggers and support the alternatives analyses. This section presents the basic proponent and agency purpose and need and calls out the various elements.

http://en.openei.org/datasets/dataset/grande-prairie-wind-purpose-and-need-example

http://en.openei.org/datasets/dataset/champlain-hudson-example

General Purpose and Need Information

Purpose and Need

A clear and comprehensive purpose and need statement is a critical component of any energy project. The purpose and need identifies why the Federal agency is responding to the project being proposed, and provides the foundations of a defensible National Environmental Policy Act of 1969 (NEPA) analysis process. The purpose and need statement is intended to drive the organization and structure of the entire environmental analysis, and may be the first thing scrutinized if there is opposition that results in litigation.[3]

A purpose and need statement is included in the written analysis required for NEPA compliance. Similar statements may be required for other local and state permitting processes, and the guidance in this white paper may be used for any energy-related purpose and need statement.

Purpose and Need Statement for NEPA Analysis Filings

NEPA is the federal statute that requires all federal agencies to prepare assessments of the environmental impact associated with and alternatives to major federal actions significantly affecting the environment. NEPA compliance is required any time federal agencies or review are implicated and often occurs as a result of impacts to federal land or request of federal money. To read more about NEPA compliance, visit the EPA Compliance website.

Constructing the purpose and need statement correctly is one of the most important steps in NEPA documentation. The purpose and need statement is a critical building block of the Environmental Impact Statement (EIS), the Environmental Assessment (EA), and sometimes the Categorical Exclusion (CE) documentation processes. Categorical exclusions typically require an environmental report, in which a purpose and need statement is included. The categorical exclusion purpose and need statement is typically much shorter than that for an EIS or EA.

NEPA established the Council on Environmental Quality (CEQ).[4] CEQ (40 Code of Federal Regulations [CFR] 1502.13) requires the following from a purpose and need statement:

The statement shall briefly specify the underlying purpose and need to which the [federal] agency is responding in proposing the alternatives including the proposed action.

On the surface, this concept seems simple; however, creating a defensible purpose and need statement must be considered carefully and undergo thorough legal review.

There are two main parts of a defensible purpose and need statement:

The purpose states concisely and clearly why the undertaking is being proposed, and articulates the intended positive outcomes of the project.
The need describes the problem(s) to be addressed by the project, defines the causes of the existing problems to be met and provides factual and quantifiable data to defend the need. The need also may highlight opportunities that could be realized by the project.

The purpose typically states the solution to the problem or need. For the proponent, this piece is relatively straightforward and will represent the project. For the NEPA lead agency, the purpose may be different.

Agency’s Purpose and Need Statement

Federal agencies conducting environmental reviews under NEPA will develop a purpose and need statement for the project specific to the NEPA process. The lead agency’s statement specifically identifies the reason for the agency’s involvement in the project and the legal or regulatory responsibilities that the agency must meet, or as typically referred to in the industry, as the NEPA “nexus” or “trigger.” The NEPA trigger may be a crossing of federal lands, a federal permit request, and decision authority of a federal agency, federal funding, or other participation in the project. A purpose statement should include the goals and objectives an agency intends to fulfill by taking action. The purpose statement should be limited to those goals and objectives that are critical to meet. The statement should address the agency’s specific regulatory authority and decision to be made. The need statement should be a discussion of existing conditions that need to be changed, problems that need to be remedied, requests that are being met, decisions that need to be made, and policies that need to be implemented. There is typically more than one specific need for a project and in such case, the need statement may set forth several project justifications. Cooperating agencies also may provide purpose and need statements in a NEPA document. Like the lead agency’s purpose and need statement, these must address the agency’s specific regulatory authority. Memorandums of Understanding (MOUs) are often established between the lead and cooperating agencies to define their roles and responsibilities during the NEPA process. The lead agency is responsible for the preparation of the EA or EIS, and retains overall responsibility for the NEPA process.

Proponent’s Purpose and Need Statement

The project proponent’s purpose and need statement sets forth the reason the proponent is proposing the project, including the proponent’s need to conduct some sort of business and the need or benefit that requires crossing federal land or conducting activities that require a federal decision, permit, or funding. This statement also has to be used to define a range of alternatives by detailing exactly what need has to be met. Only alternatives that reasonably meet the specific need can be considered for a project. It is important to keep the need clear and concise so that the project’s scope of alternatives does not become too large. It is also important that the statement is not too restrictive so that the lead agency may have a range of alternatives to consider. Under NEPA, this range of alternatives always includes the no action alternative. The proponent’s statement may list reliability, connectivity to renewable resources, increasing the capacity of the regional grid, or other reasons the project is being proposed.

Purpose and Need Statement for Public Communication

The public has an important role in the NEPA process, by providing input on what issues should be addressed in an NEPA analysis (during scoping) and in commenting on the findings in an agency's NEPA documents. The public can participate in the NEPA process by attending NEPA-related hearings or public meetings and by submitting comments directly to the lead agency. The lead agency must take into consideration all comments received from the public and other parties on NEPA documents during the comment period.[4] The purpose and need must be clear and understandable technically, as well as to the general public, in order to receive meaningful input and feedback. The purpose and need provides the side-boards for the alternatives analysis; the lead agency considers a reasonable range of alternatives that meet the purpose and need. If the purpose and need is too vague, the public will propose alternatives that can cause the range of alternatives to be large and unruly, and cause a delay and possible regression in the NEPA process. If the purpose and need is too narrow, there may not be any other alternatives that can meet the same purpose and need. A well written purpose and need focused on public communication will meet the following objectives:

  • Describes how the project was developed
  • Presents a shared understanding of the problems and objectives
  • Assists in defining project scope
  • Guides the development and evaluation of alternatives
  • Avoids developing an ill-conceived project
  • Supports legally defensible decisions

A well written purpose and need should not include fluff or technical jargon. The statement should rely on the facts and technical information and not include superfluous language, opinions, subjective words, and words that have other legal meanings in the NEPA realm such as “significant” or “hazardous.”

Bulk Transmission Specific Information

While approval of purpose and need (usually a certificate of need, or certificate of public convenience and necessity) can be obtained from state regulatory commissions, this is not always the case for privately funded merchant transmission line projects. A merchant transmission line is a third party or non-utility transmission line in a franchise area of another utility. Merchant transmission lines may not have an associated system related need like a regulated utility may have unless the proponent has applied with the state commission to be certificated as a public utility, filed and obtained a certificate of need. The purpose and need for a regulated utility transmission line project might focus on increasing capacity, system reliability, or the need for new components to serve utility customers in a regulated setting. Not having this documentation to back up the need argument can leave developers of merchant transmission lines vulnerable to need based challenges.

There are two types of purpose and need statements typically included in NEPA documents for proponent-driven transmission line projects; one for the lead agency (and often any cooperating agencies) that details why and how the agencies would be involved in the project with respect to the use of Federal lands or dollars, and one for the project proponent that details why the project is needed. Cooperating agencies become involved when they have areas of special expertise, land ownership, or jurisdiction that the project affects.The purpose and need statement in a NEPA analysis for proponent-driven transmission line projects must address purpose and need for both the proponent and the agency.

Geothermal Specific Information

no description available


Solar Specific Information

no description available

References

  1. 1.0 1.1 1.2 U.S. Government Accountability Office (U.S.G.O.A.). 2014. National Environmental Policy Act: Little Information Exists on NEPA Analyses. Washington D.C.: U.S.G.O.A.. Report No.: GAO - 14 - 369.
  2. Center for Environmental Excellence - American Association of State Highway and Transportation Officials. 08/2007. AASHTO's Practitioner's Handbook. August 2007 Edition. American Association of State Highway and Transportation Officials. Defining the Purpose and Need and Determining the Range of Alternatives for Transportation Projects. 07(August 2007): 1-19p. Guide/Handbook sent to
  3. U.S. Coast Guard. 2015. USCG NEPA Handbook. U.S. Coast Guard Office of Civil Engineering. Tools for Decision Making: Environmental Considerations. 1-66p. Guide/Handbook sent to
  4. 4.0 4.1 EPA. EPA National Environmental Policy Act Guidance [Internet]. 02/2015. [cited 2015/04/06]. Available from: http://www.epa.gov/compliance/nepa/
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