North Carolina Requires DEQ Participation in FAST-41 Permitting for Critical Energy Infrastructure

A new provision tucked into North Carolina's recently enacted State budget may have important implications for the permitting of certain energy infrastructure projects. For developers of large energy infrastructure projects, coordination between federal and state permitting processes can be as important as the underlying permitting standards themselves.

To address that issue, the recently passed State budget added a new section to Article 7 of Chapter 143B of the General Statutes: N.C. Gen. Stat. § 143B-279.22. This new statute directs the Department of Environmental Quality (DEQ) to participate in the federal Fixing America’s Surface Transportation Act (FAST-41) process for certain energy infrastructure projects upon request of a qualifying project sponsor. 

FAST-41 is a federal permitting coordination framework intended to improve interagency coordination and transparency for certain major infrastructure projects through coordinated permitting timetables, project planning, and public tracking of environmental reviews and authorizations.

What projects are covered?

The statute applies to certain "critical energy infrastructure" projects located in North Carolina, including:

• Nuclear energy generation facilities and associated infrastructure;
• Natural gas-fired electric generation facilities and associated infrastructure; and
• Natural gas pipelines and associated infrastructure.

What must project sponsors do?

The sponsor of a qualifying project or a project with a specific entry on the federal permitting dashboard must submit a written request to DEQ, which must “fully participate” in the federal FAST-41 process for a covered “critical energy infrastructure” project requiring a DEQ authorization. The statute provides that DEQ may not decline, delay, or refuse participation once such a request is made.

What must DEQ do?

For covered projects and after a written request to participate, DEQ must:

• Designate a DEQ employee as a single point of contact within five business days;
• Identify required DEQ authorizations within fifteen business days;
• Participate in FAST-41 meetings, consultations, and coordination activities;
• Provide proposed permitting milestones and decision deadlines for inclusion in FAST-41 coordination documents;
• Include DEQ authorization milestones in FAST-41 schedules to the maximum extent permitted by law;
• Conduct review concurrently with federal review unless prohibited by law;
• Coordinate with federal agencies to use shared materials and avoid duplicative review; and
• Complete review of complete applications consistent with the applicable FAST-41 permitting timetable.

DEQ must determine whether an application is complete or whether additional information is needed and is required to send a written notice to the sponsor “as soon as practicable” that specifically identifies the needed information to continue or complete its review.

Although many of these requirements are procedural in nature, the statute appears to formalize DEQ's participation in the FAST-41 process and may require closer integration of State permitting reviews with federal permitting schedules for covered projects.

What accountability measures are in place?

DEQ generally may not seek or agree to extend a permitting milestone included in a FAST-41 timetable unless specified circumstances exist, including material project changes, failure of the sponsor to provide required information, legal compliance needs, or extraordinary circumstances identified in writing by the Secretary.

If DEQ misses a final decision deadline included in a FAST-41 permitting timetable by more than thirty days, the Secretary must submit a written report to the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the chairs of the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House Appropriations Committee on Agriculture and Natural and Economic Resources. That report must identify the critical energy infrastructure project and the missed deadline; and must provide the reason for the delay, any actions taken by the Department to resolve the delay, and the expected date of final agency action.

What does the law not change?

Importantly, the statute is procedural, not substantive. The law expressly states that it does not alter any substantive state or federal permitting standard, public notice requirement, public hearing requirement, environmental protection requirement, or right to administrative or judicial review. The statute also does not require DEQ to approve any permit or other authorization.

In Conclusion

For developers, utilities, and investors involved in qualifying nuclear, natural gas generation, or natural gas pipeline projects, the new law provides a mechanism to improve visibility into permitting schedules, encourage concurrent federal-state review, reduce duplicative review efforts, and increase accountability for agency timelines. The statute does not alter the underlying requirements for obtaining DEQ approvals.

If you have questions regarding the issues discussed in this alert, including the potential applicability of the new statute to a specific project, please contact the authors or the Womble Bond Dickinson attorneys with whom you work.