Tips for Regulated Utilities Preparing for the NEPA Review Process as Part of the Energy Infrastructure Reinvestment Program

All EIR projects must comply with the National Environmental Policy Act (NEPA). This blog is intended to answer common questions on NEPA reviews for utility applications, provide tips to facilitate the process, and share links to additional resources.

Common questions related to NEPA 

Q: We already completed an environmental review pursuant to state laws for our project. Is that sufficient for the LPO NEPA review? 

No. A state level environmental review is not the same as an environmental review conducted pursuant to NEPA. Additionally, there are differences between state and federal reviews, such as the evaluation and treatment of cultural resources. For example, state level historic preservation laws may have less stringent resource identification requirements than those found in the National Historic Preservation Act Section 106 regulations. 

However, LPO can heavily leverage state level reviews for the Federal review pursuant to NEPA. LPO will seek to incorporate the findings and conclusions of any state level reviews into LPO’s NEPA review pursuant to 40 CFR 1501.12, Incorporating by reference. For example, LPO’s Environmental Assessment for Project Forward Rochester, New York, incorporated by reference the information and findings contained in the state-level environmental review, a New York State Environmental Quality Review Act document, for the project. See this EA, and other LPO EAs here.  

Q: Do we need an environmental consultant to support the NEPA review? 

LPO strongly encourages Applicants to hire an environmental consultant that has experience with Federal NEPA reviews. Benefits of hiring an environmental consultant include: 

• Assisting the Applicant in accurately defining the project description that would be the subject of the Federal financial support in the Part I application; 
• Aiding Applicants in determining what existing information (e.g., information from a state level environmental review) can be applied to or utilized in the Federal environmental review process; and 
• Expediting LPO’s processing of a Part II application by having the environmental consultant develop a strategy/approach and estimated schedule to complete the NEPA review and associated regulatory agency and Tribal consultations that is integrated into the Applicant’s overall project development schedule.

 Q: We believe our project is eligible for a categorical exclusion. Does it still need to be reviewed by the LPO environmental compliance team? 

Yes. As a Federal agency, LPO is required to comply with NEPA. Every project in an LPO application is subject to NEPA, and LPO assesses each project to determine the appropriate level of environmental review (such as a categorical exclusion, an environmental assessment, or an environmental impact statement). Examples of categorical exclusion reviews completed by LPO can be found at /lpo/categorical-exclusions.

Q: Our project has started construction or is planned to start construction in the next six months. Can this project be included in an LPO application? 

• Typically, projects with anticipated construction schedules that begin within 6 to 8 months of submitting a complete Part II application do not allow LPO enough time to process the Part II application and then complete the required environmental review pursuant to NEPA and the associated regulatory agency and Tribal consultations before the start of construction. Therefore, LPO recommends that Applicants refrain from including such projects in their applications.  
• During the environmental review process, Applicants can continue with design activities or activities necessary to support an application for Federal, State, Tribal, or local permits, acquisition of interests in land, purchase of long lead-time equipment, and purchase options.  
• Any site construction or development activities during and prior to the completion of LPO’s environmental review pursuant to NEPA and associated regulatory agency and Tribal consultations are extremely limited, and requests for such activities submitted to LPO must be reviewed in accordance with 40 CFR § 1506.1, which precludes activities that would have an adverse environmental impact or limit the choice of reasonable alternatives.  
• Unless previously approved by LPO as described in the preceding paragraph, projects that have initiated construction or site development activities (or have ongoing construction activities) at a project site during the environmental review process may limit or preclude LPO from being able to complete its review pursuant to NEPA and/or prevent LPO from completing its required regulatory agency consultations. If any such activities have an adverse environmental impact or limit the choice of available reasonable alternatives, any portion of the facility associated with such actions may be excluded from the portion of the project funded with the proceeds of the loan, or the application may be rejected.

Tips for success with NEPA

Tip: Provide a complete project description – including detailed site information and construction timelines – in the Part I application 

• Include site location and site layout figures.
• Provide a table that identifies specific Federal, state, and local permits and approvals for construction and operation, including those that are obtained and those that are anticipated (and their approval schedule). 
• Ensure that the project is compatible with local zoning ordinances. If it is not, provide a schedule for any anticipated approvals. 
• Identify whether the project or a portion of the project has been the subject of an environmental review pursuant to NEPA that was conducted by another Federal agency.

Tip: Aggregate and share existing environmental review documents as early as possible. This includes: 

• State-level environmental review documents;
• Environmental resource surveys;
• NEPA reviews conducted by other Federal agencies; 
• Environmental Site Assessments (Phase 1 and/or Phase 2).

Tip: Conduct resource specific surveys as early as possible. This includes:  

• Complete any wetland surveys and, if appropriate, document that no jurisdictional wetlands would be impacted by the project. If wetlands would be impacted by the project, obtain the required permit(s). 
• Complete archaeological and architectural surveys and planning that would allow LPO to complete its required consultation pursuant to Section 106 of the National Historic Preservation Act.
• Complete any necessary biological surveys and/or assessments that would allow LPO to complete its required consultations pursuant to Section 7 of the Endangered Species Act.
• Complete any necessary prime farmland reviews pursuant to the Farmland Protection Policy Act, and complete form AD-1006, as needed.

Have Questions? Contact Us. 

Interested applicants are invited to request a pre-application consultation at any time. LPO’s Outreach and Business Development staff will meet with potential applicants and provide step-by-step assistance to navigate the application process. Requestors should come prepared with a description of the proposed project(s) and identified financing needs.