Pioneer’s Energy & Infrastructure Team is Closely Following Legislative Efforts to Reform Permitting of Energy Capital Projects and Why Energy Utility Leaders Should Care

By nature, transmission capital projects span over large geographical footprints. While different attributes influence the amount and types of permits required, it is not uncommon for larger high-voltage transmission lines to require upwards of 25+ permits.

From a risk management standpoint, every permit carries a risk of delay and in some cases, denial, which could have a cascading effect on the overall project cost and duration. While we typically advise our clients to carry 4 - 6% of contingency risk dollars related to permitting risks alone, it is always a risk category that requires effective mitigation strategies throughout the project. That, added to the fact that permitting costs can be around 2 - 3% of a major high-voltage transmission project, means that efforts to optimize the process of issuing regulatory permits could have significant project cost benefits.  

Over the past two years there has been an attempt by congress to include permitting reform in the language of multiple bills. It started with the 2021 bipartisan infrastructure deal, and the recent signing of the debt limit bill was the first time some of the reforms got signed into law. The push continues with the 2023 Building American Energy Security Act. Here are some of the key reforms being proposed: 

1. Enhance the federal government’s permitting authority to streamline FERC’s approval of transmission lines.
2. Define the criteria for designating and prioritizing projects of strategic national importance. 
3. Address litigation delays by setting a 150-day statute of limitations for court challenges. 
4. Set a maximum timeline for permitting reviews by NEPA, including two years for major projects, and one year for lower-impact projects. 

While these permitting reforms may still have more hurdles to face in the legislative process, this conversation is a timely one as the nation prepares for an unprecedented ramp up in energy infrastructure projects that will need to be constructed on-time and on-budget.

Permitting risks are among the many risks that Pioneer has helped our utility clients to identify and mitigate on some of the nation’s biggest transmission capital projects over the last decade. Connect with us to learn more about how our team has been working to improve risk management processes on major energy infrastructure projects.