It’s incredible, isn’t it? Whether or not your legal practice involves any aspect of the energy or renewable energy market, it is abundantly apparent that all is “green.” The green sustainability initiative is not only integral to the flip of every light switch, it has now resulted in the rebranding of the food we eat, the clothes we wear, the buildings we build, and so many other aspects of our lives. At the root of the green initiative is the development of commercial scale, renewable-energy power facilities that supplant to some extent the power that has traditionally been provided by fossil fuel facilities such as natural gas, coal, and diesel power plants.

The renewable facilities to which I refer are not just wind and solar facilities. There exists a virtual buffet of renewable resource options that include biogas, biomass, geothermal, and hydroelectric facilities. Within each of these categories of resources, there exists variability as to how energy is generated. For example, biomass can include the vaporization of a municipal solid waste stream or the combustion of wood chips to create energy. Biogas can include using methane gas (just as conventional generation uses natural gas) emitted from commercial scale landfills to generate electricity or a digester fueled by animal or agricultural waste that produces usable gas for the generation of electricity. Even solar developers are using different technologies to generate power, including photovoltaic panels that convert the sun’s heat to electricity versus a concentrating solar power plant which uses the sun’s heat to convert water to steam that is then used as a fuel to power a turbine that generates electricity. Solar technologies are now being expanded to include the use of molten salt technology to extend the life of the solar facility long after the sun has set, which in southern Nevada may be a valuable commodity given that Las Vegas has an evening energy peak that extends well beyond the average city’s evening peak. This list neither addresses all of the existing technologies nor does it touch upon the technologies under development. However, since the title of this article promises to “keep it interesting,” further investigation into the technology will be saved for another day.

Despite all of the media attention and the backing of the industry by public figures, including personalities who make their living in Hollywood, the development of renewable facilities is not glamorous and it is not easy; it’s arduous and painstaking. It takes years of persistence and determination to overcome the hurdles that are required to generate that first kilowatt hour of energy. One of the most significant hurdles is the environmental permitting process. In Nevada, this process involves meeting the local, state, and federal agency requirements. In particular, if a project falls within certain parameters, it must comply with Nevada’s Utility Environmental Protection Act (UEPA). UEPA is comprised of statutes, see Nevada Revised Statutes 704.820 et seq., and regulations, see Nevada Administrative Code Section 703.415 et seq., which govern the acquisition of a permit to construct energy projects in Nevada. The permit to construct is the golden ticket in Nevada and, once obtained, it allows a developer to commence and complete construction of a project. UEPA is very ably administered at the regulatory level by the Regulatory Operations Staff of the Public Utilities Commission, a group of experienced and dedicated lawyers and technical experts who oversee the permit application process and ensure that each term of the statutes and regulations are met before the application is presented for consideration to the panel of three commissioners whose responsibility it is to approve or deny the application.

UEPA requires that, before a permit to construct is issued, all local, state, and federal permits must be in hand.Because 87 percent of the state of Nevada is owned by the federal government, the UEPA process may take in excess of 18 months to complete while the renewable energy developer procures the necessary federal approvals required to locate energy facilities on federal land. These federal approvals are, for the most part, governed by the National Environmental Policy Act (NEPA) and take the form of an Environmental Impact Statement or an Environmental Assessment, which is somewhat less rigorous and less time consuming than the Environmental Impact Statement. Depending on the size and scope of the project, the NEPA process can also add millions or tens of millions of dollars to the cost of a project. This process not only applies to renewable energy facilities but to any energy facility, such as fossil fuel generation, electric transmission, distribution lines, etc., located on federal land.

In 2001, the UEPA statutes underwent significant change in light of the expanding development of energy facilities on federal land in Nevada. Prior to 2001, state and local agencies had historically waited until the NEPA approval was secured by the project developer before starting their own environmental review of the project. In 1997, the issuance of a local jurisdiction’s special use permit for a major transmission project subsequent to the issuance of the Environmental Impact Statement resulted in rerouting the last 14 miles of the energy transmission line at a significant cost to Nevada ratepayers. When the local governing body would not approve the route selected by the NEPA process, an amendment to the route for the line identified in the Environmental Impact Statement was required. Many months of valuable time and millions of dollars of ratepayer money were lost. Accordingly, during the 2001 Nevada legislative session, changes were made to the UEPA process that require local and state entities to actively participate in the NEPA process to ensure that their concerns are registered and considered with regard to environmental impacts, citing and routing for the project, visual impacts, etc. Specifically, the 2001 revisions to UEPA provide that, if an environmental review has already been conducted by a federal agency, the other permitting entities are required to accept and incorporate the findings and conclusions made by the federal entity and are not authorized to duplicate the environmental review already performed. NRS § 704.877.

The statutory changes implemented in 2001 eliminated the uncertainty that the state and local process may result in a modification of a final federal decision and have eliminated the months of local or state process that used to take place following the completion of the federal NEPA process. Over the last ten years, this has saved developers of energy and renewable energy facilities huge amounts of time and money. Even so, this mitigation of the state and local process does not alleviate the very comprehensive federal process that evaluates every possible aspect of a project for mitigatable and nonmitigatable impacts. Federal measures have been implemented in Nevada in the last few years that are designed to shorten the federal process. The United States Bureau of Land Management has commenced the performance of programmatic Environmental Impact Statements that involve NEPA review of large tracts of land deemed suitable for renewable projects. These studies are designed to complete a portion of the federal environmental process. If a specific project is later proposed for the land that is included in the programmatic Environmental Impact Statement, ideally, it will benefit from the preemptive study work and the federal process for the specific project will be limited to an Environmental Assessment. As I write this article, the validity of this process is being tested on a substantial wind project site in eastern Nevada. Environmental groups have appealed the Environmental Assessment, saying it is insufficient and that a full Environmental Impact Statement should have been performed. The decision in this case will reveal whether the attempt to shorten the federal environmental process in Nevada will succeed. While the development of renewable energy projects continues to move forward, new barriers to future development are apparent. There is a need for new electric transmission lines to transport these resources to market both inside and outside the state of Nevada. The construction of the large transmission line on the eastern side of the state, referred to as the Southwest Intertie Project or the One Nevada Transmission Line, will provide a needed corridor for the transmission of renewable resources, but more development is needed. The next viable market for renewable resources in Nevada is the export market, which is the transportation of renewable energy from facilities constructed in Nevada to buyers outside the state. This is another very interesting concept in the renewable energy field.

Kathleen M. Drakulich is a Partner in the McDonald Carano Wilson law firm, which has offices in Las Vegas and Reno, Nevada. She is formerly Assistant General Counsel to NV Energy and has practiced in the energy, renewable energy, and transmission arena for over 18 years. In addition to representing developers of energy facilities, she represents some of Nevada’s largest energy users in general rate, resource planning, and other regulatory matters before the Public Utilities Commission of Nevada.

LEED and Nevada
The United States Green Building Council (USGBC) was formed as a consensus-based organization with the intent of encouraging the construction of and determining what constitutes a green building. The small initial membership of the USGBC was a collection of contractors, architects, engineers, builders, and environmentalists. At the beginning of the green building movement, the federal government took steps to incentivize energy efficient building through grants, but there was no consensus as to what would constitute a “green” building. “Green” was in the eyes of the beholder. Recognizing a need for an objective standard for green buildings, governmental entities encouraged the USGBC to develop such a standard. In 2001, the membership of USGBC approved release of its LEED Rating System.

The term LEED means Leadership in Energy and Environmental Design. The rating system focuses on the design, construction, and operation of a building, adopting a whole building approach. In 2001, there was one LEED rating system. Over ensuing years, this expanded to include several other rating systems. Each had various prerequisites and possible credit points under major categories: (1) site planning; (2) water management; (3) energy management; (4) material use; (5) indoor environmental air quality; and (6) innovation and design progress. As LEED evolved, various state and municipalities adopted LEED incentives or requirements.

Four years later, Nevada still had no LEED certified buildings, although an animal shelter was seeking LEED certification. In 2005, the Nevada State Legislature passed A.B. 3, which dealt with renewable energy, as well as establishing the state’s first green building incentive program. This was largely a Republican-driven initiative with Republican leadership being acutely aware that it did not wish to stifle economic growth, but wanted to reduce the amount of electric power imported into Nevada and, thus, diminish the exportation of Nevada dollars to pay for that power. The higher the energy efficiency of buildings, the less energy consumed and less money sent out of state for power purchases. The timing of this was critical because the casino-hospitality industry was poised to embark on a series of major or mega casino projects, which typically require very large uses of electrical power.

The initial program provided two forms of tax incentives, a waiver of sales tax, and a partial abatement of real property tax. The incentives were for projects that registered with the USGBC and the state of Nevada and, thereafter, received at least a silver or above certification for LEED-NC, LEED-EB, or LEED-CS. Indeed, the timing of the program was impeccable as it encouraged the development of the largest LEED projects in the world. The first five LEED projects that met the criteria established by the state represented approximately 35,000,000 square feet of construction at an estimated cost of over $14 billion. The state’s program was so successful, the Nevada State Legislature determined it could eliminate the sales tax incentive for later LEED buildings and modify the property tax incentives. The sheer size and complexity of the Nevada LEED projects meant that Nevada’s experience with LEED became a central focus point of the now international LEED phenomena. People turned to Nevada to see what worked and what did not work. Many states responded by amending their own building codes, particularly to require higher levels of energy efficiency as reflected in the LEED rating systems.

Federal incentives
On the national level, in 2006, 19 federal agencies signed the 2006 Federal Leadership in High Performance and Sustainable Buildings Memorandum of Understanding (MOU). The criteria, goals, and objectives of this MOU reflect the basic philosophy of LEED. In 2007, President Bush signed Executive Order 13423, which required federal agencies to reduce their greenhouse gases through a reduction in energy usage of three percent per year or a total of 30 percent. The Bush executive order also required a two percent reduction in water usage per year for a total of 20 percent by 2015. Most importantly, the executive order required that new construction and major renovations of federally owned and leased buildings comply with the MOU. In essence, the administration of President Bush made an enormous commitment to LEED and energy efficiency for its buildings based on two main drivers: climate change and national security, as they related to energy efficiency. Between Nevada’s program and that of the Bush administration, market forces were given the incentives to develop new techniques, expand recycling, and develop new products.

The effects of climate change and national security
The term “climate change” is a phrase often misunderstood. The Environmental Protection Agency has defined it as a “significant change in measures of climate (such as temperature, precipitation, or wind) lasting for an extended period (decades or longer).” This definition is sometimes in conflict with the phrase “global warming,” which is defined as the rise in temperatures on a global basis over extended periods of time. Confusion arises when a person thinks only of global warming but looks outside and sees snow when it shouldn’t be there. A weather event or even a season of events do not make for a climate change. Event horizons must be long term. The great weight of evidence shows that the earth has been warming up for several thousands of years, but has warmed up at a significantly increased rate in the last few hundred years since the industrial revolution. This warming affects the climate in various areas of the world differently due to geography and the disturbance of patterns in wind, rain, snow, tides, and currents.

Predictions about the impact of climate change differ depending on the level of expertise applied; the quality of the data; and sometimes, unfortunately, the political philosophy of the source. But, largely the difference in opinions is one of dimension—that is, how much there will be and how the effects will disturb the ecosphere. In the United States, the subject of climate change is often seen as a political question or as an issue still widely debated within the scientific climate change community. Outside the U.S., we encounter a different view. For instance, the head of Lloyds of London, the international insurance giant, recently disclosed that their primary risk concern was the effect of climate change on the east coast of the Unites States.

Changes in ocean currents affect weather patterns. Flooding and new deserts are frequently predicted. In addition, ocean current changes affect fishing grounds as to their location and abundance. Concerns over how changes in climate could affect food supply is frequently raised. Alterations of the natural growth patterns of plants change insects habitat, which may destroy lower rungs on the food chain ladder, which can then affect other species. Climate change may upset the balance between insect crop pests and the “natural enemies” that control their numbers leading to further crop reduction. The same scenario applies to pathogens and/or disease spreading mechanisms, wildlife, and species preservation.

A fundamental question remains in the public’s mind: when will it affect our lives and what do we do? Congress is in the throws of major policy and political discussions about these issues. Some members of Congress want the government to do more about climate change, while others feel differently. Ideology and political considerations seem to dominate discussions. Many of those who take the position that there is no threat from climate change admit that the current vast amounts of CO2 and other greenhouse gases emitted is unprecedented. In addition, there is recognition that greater energy efficiency will translate into less imported oil and less U.S. dependence on fuel from countries and organizations hostile to the U.S., democratic freedoms, religious tolerance, and respect for the equality of women.

We rely on vast amounts of imported oil. A major source of our oil is from the Middle East and other areas where there is hostility to democratic, capitalistic, and economically–developed countries. These areas continue to be in turmoil and no one can predict what that means to the oil supply to this country. As one prominent business member of the Las Vegas community has said, “For every gallon of gas I buy and every bit of energy we waste in our buildings, we help fund terrorists who want to destroy us, our way of life and our country.” Concern over climate change prompted the Bush administration to analyze its geopolitical and military implication and impact on national security. Scenarios involved mass human migration and new military conflicts over food supplies and water. The concern over climate change and our dependence on imported oil prompted USGBC members to develop new LEED rating systems to give greater sensitivity to the importance of energy efficiency in buildings and their component parts. Nevada’s leadership in LEED help set the stage for the new LEED rating systems. These place higher importance on energy efficiency and climate change. Nevadans should take pride in helping to move the bar higher for our building across this great nation. Les Lo Baugh is a Shareholder at Brownstein Hyatt Farber Schreck and is a member of the firm’s Natural Resources Department, where he specializes in corporate, restructuring, energy, and environmental law. He began his legal career 40 years ago working as a staffer in the U.S. Senate drafting environmental legislation such as the Endangered Species, Clean Water, Clean Air, Off Shore Drilling, Noise Abatement Acts and others. The U.S. Environmental Protection Agency recently honored Mr. Lo Baugh as their keynote speaker and described him as the most influential Native American lawyer in the United States.

Steven L. Hoch is a Shareholder at Brownstein Hyatt Farber Schreck and is a member of the firm’s Natural Resources, Climate Change, and Litigation Groups. He has 35 years of experience in environmental litigation, agency adjudications, permitting, and counseling municipal and developer clients on a wide variety of environmental issues. He is a frequent lecturer and writer in the field and, in particular, on climate change issues and their impact on clients and the practice of law.