Will California's Infrastructure Deal Speed Up Water, Clean Energy Projects?

California lawmakers and Gov. Gavin Newsom are poised to enact a package of bills that aim to speed up lawsuits that entangle large projects, such as solar farms and reservoirs, and relax protection of about three dozen wildlife species.

Newsom and Senate and Assembly leaders unveiled the five bills earlier this week as they negotiated the state’s $310 billion 2023-24 budget. The deal ended a standoff over the governor’s infrastructure package, which he unveiled last month in an effort to streamline renewable energy facilities, water reservoirs, bridges, railways and similar projects.

The package of bills will make its way through the Legislature on an accelerated schedule. The bills include an urgency clause — meaning they would take effect immediately when Newsom signs but they also will require a two-thirds vote to pass.

Hearings have been scheduled for committees in both houses today. Debate may largely end up being a formality as the package has already been negotiated by Newsom and lawmakers behind closed doors.

The debate and negotiations focused on how California can speed up major projects that benefit the public while ensuring the environment is protected. The wide-ranging collection of bills take aim at broad swaths of state environmental policies shaping how state agencies approve large projects. For instance, the plan to build the Sites reservoir to add dams and store more Sacramento River water has been stalled for years as it undergoes environmental reviews and engineering planning.

One of the bills sets a time limit (PDF) for legal challenges for specified water, transportation and energy projects under the landmark California Environmental Quality Act (CEQA), which can entangle projects in court for years.

Another gives the state Department of Fish and Wildlife new authority to issue permits allowing species that are designated “fully protected,” (PDF) such as the greater sandhill crane and golden eagle, to be harmed by similar types of projects.

The compromise that Newsom and lawmakers reached seems to have accomplished what compromises rarely do: Environmentalists who initially criticized Newsom’s package say they are satisfied with the changes, and businesses and water agencies, which have backed the package from the beginning (PDF), support the changes, too.

The proposals “are really going to help move the needle on water infrastructure projects that are needed to address the impacts of climate change,” said Adam Quinonez, director of state legislative and regulatory relations at the Association of California Water Agencies.

The changes won over the Natural Resources Defense Council, which had pages of concerns about the potential environmental harms caused by Newsom’s original proposals, such as provisions that might have expedited the deeply divisive Delta tunnel.

“It’s good that it’s resolved, and that it’s better than it was and that the budget was able to move forward,” said Victoria Rome, the Natural Resource Defense Council’s director of California government affairs. “But I would say to accelerate clean energy infrastructure, we have a lot more to do as a state.”

Although the wildlife bill would ease some existing protections, Mike Lynes, Audubon California’s director of public policy, hopes that in practice it would actually increase enforcement.

“Ultimately, it really will fall on the Department of Fish and Wildlife to make sure that these are good permits, and that the law is enforced,” he said.

So what’s in these bills? And what impact will they have on infrastructure projects and the environment?

What’s happening with CEQA?

One of the bills, SB 149, takes aim at the often lengthy lawsuits brought under CEQA, which tasks public agencies with assessing possible harms of proposed development. Lawsuits by the public and advocacy groups can entangle projects like housing developments, highway interchanges, and solar farms for years.

The bill would set a 270-day limit for wrapping up these environmental challenges for water, energy, transportation and semiconductor projects. The projects must be certified by the governor by 2033 (PDF) and meet certain criteria. These could potentially include water recycling plants, aqueduct repair, bikeways and railways, wildlife crossings, solar and wind farms, zero-emission vehicle infrastructure, among others.

In a nod to concerns that this would expedite the Delta tunnel, there’s now an explicit carveout saying that particular water project no longer qualifies for the faster timeline.

There’s a big caveat, though: The 270-day limit only applies “to the extent feasible” — a decision that judges would make.

So will the time limit actually speed up cases? That remains to be seen, said David Pettit, senior attorney at the Natural Resources Defense Council. “I think it sends a signal to the judiciary that the Legislature wants these cases hustled up,” Pettit said.

But in practice, he said, there are other major time sinks for the legal process beyond the length of litigation, such as preparing the paperwork behind an agency’s environmental assessment to create what’s called the administrative record. This is critical ammunition in legal challenges.

Newsom’s original version of the bill sparked a battle over which emails should be disclosed in the administrative record by excluding any internal communications that didn’t make it to the final decision makers. Assembly consultants warned this could allow state agencies to pick and choose which documents to disclose.

Now, under the latest iteration, all emails related to the project must continue to be revealed in the administrative record, and only emails over minutia like scheduling can be excluded.

“The bottom line is most emails that are actually pertinent to the project — not like, ‘How about those Dodgers?’ — they will go into the record,” Pettit said. “That is important, because sometimes people will talk candidly over email in a way that others might not.”

What are the effects on wildlife?

SB 147 would allow projects to receive permits to kill certain wildlife species that are classified as “fully protected.” Thirty-seven species — including the golden eagle, greater sandhill crane,  bighorn sheep, several coastal marsh birds, 10 fish and several reptiles and amphibians — are listed as fully protected.

Under the bill, only certain types of projects that are considered beneficial to the public could get the new permits, including repairing aqueducts and other water infrastructure, building wind and solar installations, and transportation projects, including wildlife crossings, that don’t increase traffic.

State and federal Endangered Species Acts would still protect rare wildlife and be unaffected by the bill. But it would alter another, stronger protection under state law: “Fully protected” species began in the 1960s (PDF) as part of an early effort to protect California’s animals, such as the California condor and southern sea otter. Of those, all but 10 are also listed under the California Endangered Species Act.

Unlike the endangered species acts, which allow wildlife agencies to grant permission to “take” or harm a species, so-called “fully protected” species cannot be killed except in rare cases, such as scientific research.

To obtain the new permits, developers and other applicants would need to show that their plans to compensate for the harm to these species actually improves conservation — a more stringent standard than required by the California Endangered Species Act.

This addresses an enforcement gap: Regulators have little authority to make developers work with them to ensure projects take steps to reduce their impacts on those species. “There’s no hook for the regulatory agencies to demand avoidance and mitigation measures, because they’re unwilling to enforce the laws as written,” Audubon’s Lynes said.

Fish and Wildlife Director Chuck Bonham told a Senate committee that without a permit process to allow harm to fully protected species, project developers are left with little recourse if their projects could disrupt these animals. As a result, “every project proponent faces an unnecessary risk for project planning, financing and construction.”

Three species would also lose their status as fully protected: the American peregrine falcon, brown pelican and a fish called the thicktail chub. The falcon and pelican had been listed as endangered species but are now considered recovered, largely due to the 1972 ban on the pesticide DDT; the chub is considered extinct (PDF).

“We certainly don’t want to be reducing protections for pelicans and peregrine falcons, but it’s also understandable to be looking to transition them off the list,” Lynes said.

The latest version overhauls Newsom’s original proposal to scrap the “fully protected” designation entirely, which environmentalists worried would significantly weaken protections for these species. Delta communities were especially concerned, seeing it as one of several moves to push the Delta tunnel project forward by targeting the greater sandhill crane, which winters in the region.

The new version of the bill explicitly says that a Delta tunnel project would not qualify for permits to take the crane or any other fully protected species.

Will this actually streamline projects?

The multibillion-dollar question is whether these regulations will actually help California build big things faster.

The Newsom administration said they are critical to bolster California’s chances when competing against other states for $28 billion in discretionary funds from the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

“It’s going to be extremely difficult if not impossible to draw a straight line that if you pass judicial streamlining, we get the federal dollars here in California,” said Adam Regele, a vice president at the California Chamber of Commerce. “But what it does do is it makes us more competitive.”

The Natural Resources Defense Council’s Pettit is skeptical that this will in fact streamline lengthy and litigious approvals under CEQA. He pointed to the loophole establishing a nine-month time limit for court challenges only “to the extent feasible.”

“How do we know that this package will actually speed things up? Because I’m not seeing it,” Pettit said.

Newsom’s deputy communications director, Alex Stack, said he couldn’t name any specific projects that would benefit or ones that had been specifically denied federal funding because of California’s existing laws.

But he said he expects the bills to cut the timeline for major builds in California by up to almost a third. That includes for transit projects, wind and solar installations, semiconductor plants and water storage projects like Sites reservoir.

“It’s climate denial to preserve the status quo — to delay these projects is to delay climate action, clean energy, safe drinking water, and put millions more Californians at risk of devastating climate impacts,” Stack told CalMatters last week.