A Couple Ideas for CEQA Reform

Hope springs eternal

Something is happening in California. Buffy Wicks, chair of the Assembly Select Committee on Permitting Reform, has repeatedly called for reforms to the CEQA process. Assembly Member Papan has introduced AB527, which would create a categorical exemption for geothermal exploration drilling. And Ro Khanna is tweeting about zoning reform.

With that in mind, I thought it might be useful to put out a few ideas that would make a significant difference in California’s ability to deploy clean energy infrastructure. These ideas fall into two categories: Judicial Review Reform and Exemptions.

Judicial Review Reform

The California Environmental Quality Act (CEQA) litigation timeline presents significant obstacles for clean energy deployment. Currently, legal challenges can extend for years, creating uncertainty that impacts project viability regardless of the lawsuit's merits. This creates what some observers call a "litigation doom loop" where projects become mired in repeated lawsuits and multiple rounds of CEQA analysis, deterring investment and stalling California's climate and infrastructure goals.

CEQA lawsuits (approximately 200 cases annually) often involve projects aligned with state priorities. Clean energy projects have increasingly become targets in this cycle – even solar farms, wind turbines, and energy storage installations that support state climate mandates have been held up for years in court.

The cost of these delays is substantial – each year a major infrastructure project is delayed can add tens of millions in costs while deferring critical climate benefits. This litigation uncertainty has a chilling effect on investment in the very industries California is counting on to drive a clean economy transition.

Potential Reforms for Consideration

Several approaches could address these judicial process concerns:

1. Injunctive Relief Limitations

   • Establishing a higher standard for injunctions against climate-beneficial projects

   • Requiring plaintiffs to demonstrate likelihood of significant irreversible environmental harm

   • Allowing courts to require bonds from petitioners to cover delay costs (similar to existing provisions for affordable housing cases)

2. Procedural Improvements

   • Directing CEQA cases to appellate courts for initial record review, bypassing the trial court process

   • Creating specialized CEQA judicial panels with expertise and dedicated fast-track schedules

3. Expanded Expedited Review

   • Extending the 270-day expedited judicial review timeline that exists under the Environmental Leadership program to all clean energy and major infrastructure projects by default

   • Making this expedited timeline permanent

Context and Considerations

California has previously implemented faster timelines for select project categories including renewable energy, housing, and sports facilities through special statutes. As Governor Newsom has noted, if fast-tracking works for stadiums, similar approaches could benefit critical infrastructure. The state has experimented with special programs to fast-track court cases for qualifying projects, such as the 2011 AB 900 "Environmental Leadership" program (extended via SB 7 in 2021 and SB 149 in 2023), which allows certain projects to be certified for expedited judicial review with a 270-day timeline.

The 2023 reforms began expanding expedited review eligibility. A comprehensive approach would make fast-track review the standard for all renewable energy generation, storage projects, and transmission lines that complete CEQA review. This could enable final decisions within 9-12 months of filing.

Limiting injunctions represents another critical reform element. When projects are halted during litigation (which can last years), financing and momentum often collapse. For clean energy projects, courts could apply a modified standard that allows work to continue during litigation unless irreversible environmental impacts would occur. This approach, similar to the "remand without vacatur" concept in federal National Environmental Policy Act (NEPA) cases, would prevent minor procedural errors from causing years of project delays while still enabling courts to mandate document revisions or additional mitigations when warranted.

The bond requirement concept builds on California's existing provision allowing courts to impose up to $500,000 bonds on plaintiffs in bad-faith affordable housing challenges. Making bonds a presumptive requirement when injunctions are sought against clean energy projects would discourage purely tactical litigation while preserving access for genuine environmental protection cases. This approach addresses a fundamental problem: under current conditions, CEQA litigation presents a "low-risk, high-reward" scenario for project opponents, since plaintiffs can recover attorney fees if they win, but developers/agencies cannot if the suit was meritless. This asymmetrical incentive structure encourages litigation or threats of litigation for reasons potentially unrelated to environmental protection.

CEQA Exemption Expansion

Several categories of clean energy projects could benefit from new or expanded statutory CEQA exemptions based on their low environmental risk and high climate benefits:

1. Solar on Disturbed Lands

   • Solar installations on canals, aqueducts, highway rights-of-way, capped landfills, or other previously disturbed sites

   • These locations typically have minimal wildlife or habitat value

   • Conditional requirements such as size limits or native plant buffers could ensure negligible impacts

2. Small-to-Midsize Clean Energy Projects

   • Projects below defined thresholds (e.g., solar farms under 50 MW) that incorporate standard environmental practices

   • Required to include upfront mitigation measures for known impacts (glare, noise)

   • Would enable faster deployment of community-scale energy projects

3. EV Infrastructure and Grid Upgrades

   • Electric vehicle charging stations and routine grid infrastructure improvements

   • Clear statutory exemptions would remove uncertainty that currently slows deployment

4. Any Categorical Exclusions Under NEPA

   • The federal NEPA has a more comprehensive list of categorical exclusions than CEQA

   • Aligning CEQA’s list with NEPA’s list would provide consistency while streamlining the permitting process

   • AB527, which would create a categorical exemption for geothermal exploration drilling based on NEPA’s categorical exclusion, is an excellent example of this type of reform

5. Projects Meeting Climate Benefit Tests

   • Broader exemption framework for projects demonstrating net climate benefits without significant site-specific impacts

   • Would allow hydrogen facilities or transmission lines to proceed directly to mitigation planning if they reduce overall GHG emissions and avoid sensitive habitats

Implementation Context

California's clean energy goals (100% carbon-free electricity by 2045) require a significant acceleration in project approvals. CEQA's Guidelines already include numerous categorical exemptions for project classes with minimal impacts. The Legislature has previously created specific exemptions for priorities like rooftop solar and supportive housing on church properties.

Importantly, exempted projects would still comply with other environmental protections including the Endangered Species Act, Clean Water Act, local building codes, and air district permits. CEQA exemptions eliminate duplicative review processes rather than environmental safeguards.

These reforms are all pretty common-sense, but would significantly increase the speed of clean energy deployment in California. It’s an exciting year in the legislature – let’s hope for progress.