On June 3, 2023, President Biden signed into law the Fiscal Responsibility Act of 2023, H.R.3746, 118th Congress (2023) (the “Debt Ceiling Law”). The most important, non-fiscal provisions of that law are found in Title III of Division C, which makes significant changes to the permitting of energy-related projects under the National Environmental Policy Act, 42 U.S.C. 4321, et seq. (“NEPA”). The new law adds nine additional sections to NEPA, all of which appear to reduce the amount of time and money that applicants spend navigating the federal permitting process. These changes mirror almost exactly the permitting reform proposals put forth by the American Clean Power Association (“ACPA”) in April 2023. See American Clean Power Association, U.S. Permitting Delay Hold Back Economy, Cost Jobs, (April 2023).

We have distilled seven key takeaways that energy developers and other organizations subject to NEPA should know about.

1. New Deadlines to Complete the Environmental Impact Statement (“EIS”) or Environmental Assessment (“EA”)

It currently takes an average of 4.5 years for federal agencies to complete certain NEPA reviews, as measured from the date on which the lead agency issues its notice of intent (“NOI”) to issue an environmental impact statement (“EIS”). See Council on Environmental Quality, Environmental Impact Statement Timelines, at p. 1 (June 12, 2020). According to ACPA, these delays cost hundreds of billions of dollars in lost investments and hundreds of thousands of American jobs, and place an estimated 100 gigawatts of clean energy projects at risk of significant delay.

To respond to these issues, Section 107 of the 2023 Debt Ceiling Law establishes a two-year deadline by which the lead federal agency must complete its EIS or a one-year deadline by which it must complete its EA, as appropriate. This change overrules the current regulations, which suggest these same one- and two-year deadlines unless a senior official of the lead agency approves a longer period in writing, and establishes a new deadline. See 40 C.F.R. § 1501.10. Under the new law, the lead agency no longer has the right to unilaterally extend deadlines.

However, if the lead agency determines it cannot meet the one- or two-year deadlines, it “may extend such deadline, in consultation with the applicant, to establish a new deadline that provides only so much additional time as is necessary to complete such environmental impact statement or environmental assessment.” (emphasis added). However, the applicant may seek court intervention if it believes the proposed extensions amount to a “failure by an agency to act in accordance with an applicable deadline under this section.”

2. Unified Federal Reviews

While the Debt Ceiling Law is far from a uniform permitting process, Section 107 seeks to streamline the permitting process by consolidating the review of multi-agency projects under the auspices of a single lead agency that maintains the proceedings in a single document stream to avoid unnecessary or duplicative work.

Additionally, Section 109 permits lead agencies to adopt a categorical exclusion listed in another agency’s NEPA procedures. A categorical exclusion exists when the agency determines that the action normally does not significantly affect the quality of the human environment, and therefore does not require either an EA or an EIS. Allowing agencies to adopt each other’s categorical exclusions empowers the lead agency to bypass the EA and EIS processes altogether.

Similarly, Section 108 authorizes agencies to rely on programmatic environmental documents for at least five years—and possibly longer—without additional review of the analysis in the document unless there are substantial new circumstances. A programmatic environmental document is an EIS or EA analyzing some or all of the environmental effects of a policy, program, plan, or group of related actions.

3. E-NEPA

Section 110 calls for establishing “E-NEPA”—a federal permitting website that will allow applicants to submit documents and materials in a unified online portal, collaborate with applicable agencies to edit documents in real time, and track the progress of individual applications.

4. Approval by Head of Lead Agency

A small but conspicuous change in the Debt Ceiling Law is that agency approvals of the EIS or EA are no longer signed off by the “federal official responsible”—instead the head of the agency themselves is the final gatekeeper.

5. Transmission Study

One of the biggest hurdles to achieving a clean, electrified economy is the siting, installation, and maintenance of large amounts of electricity transmission infrastructure. In the Debt Ceiling Law, Congress signaled the importance of fast-tracking new transmission facilities by requiring the North American Electric Reliability Corporation (“NAERC”) to deliver to the Federal Energy Regulatory Commission (“FERC”) “a study of total transfer capability . . . between transmission planning regions.”

6. Energy Storage

The Debt Ceiling Law makes no immediate progress in energy storage permitting, except to expressly add “energy storage” to the list of “covered projects” in 42 U.S.C. § 4370m(6)(A).

7. Mountain Valley Pipeline

The Debt Ceiling Law expressly approves the completion of the Mountain Valley Pipeline (“MVP”) project in West Virginia. While the MVP provisions are not generally applicable, they are noteworthy insofar as they signal that the Debt Ceiling Law and its permitting reforms are intended to support all energy development projects—not just renewable development.

Research and drafting assistance provided by summer associate Maryam Ahmed.