Maine PUC Solicits Renewable Energy Projects on PFAS-Contaminated Farmlands

Will There be Any Takers Re Development of Renewable Energy Projects on Maine PFAS-Contaminated Farmlands?

The Maine Public Utilities Commission has wasted little time in soliciting bids for renewable energy projects to be located on PFAS-contaminated farmland. Following the PUC’s August 12, 2024, order, the Commission opened a docket initiating the request for proposals (“RFP”) for development on PFAS-contaminated land. This docket is the next step in the process through which the Commission will solicit and select renewable energy projects to be developed on land contaminated with “forever chemicals” that can no longer be used for agricultural purposes. See my prior post for background.

Traditionally, once such a docket is open, the Commission will issue a formal RFP detailing the parameters of the solicitation for power purchase agreements. The RFP must adhere to the requirements of applicable laws and rules—here, that includes the Commission’s newly adopted Chapter 397 rule implementing the contaminated-lands procurement program. Deadlines for response can vary and are typically specified in each RFP.

After proposals are received, the Commission will begin proceedings involving review of the proposals and conferences with the proposed developers. The Commission has determined this docket will be a “secured case”—meaning that full access to the proposals and participation will be limited to parties and intervenors approved by the Commission. Some information or documents may be released by the Commission on a discretionary basis; typically, the Commission publishes information on winning bidders and their proposals following their selection.

While the Maine PUC has put the pieces in place to move this program forward, it remains to be seen whether there is any significant appetite within the renewable energy development sector to bite into this unique development opportunity. 

Maine Seeks to Grow Solar Farming on PFAS-Contaminated Farms

The Maine Legislature recently directed the Maine PUC to adopt rules that would require the Commission to initiate purchases of renewable energy from projects that are located on land contaminated with PFAS – the so-called “forever chemicals.”  The legislation was enacted in recognition of the fact that at least 60 farms in Maine have been rendered useless for farming due to the spreading of PFAS-contaminated sewage sludge as fertilizer – a practice that State regulators had encouraged for over a quarter century.

In 2022, amidst increased state and national scrutiny on PFAs, the Maine Legislature passed a law banning the use of sewage sludge as a soil amendment and requiring Maine DEP to investigate and conduct testing on farms across the state. Since then, Maine DEP has undertaken testing at hundreds of sites where septage or sewage sludge has been land-applied.  

PUC Rules Chapter 397: Procurement of Renewable Resources with a Preference for Projects Located on Contaminated Land is effective as of August 10, 2024. This new rule implementing the Legislative directive, establishes requirements for the procurement of energy and renewable energy credits (“REC”) and specifies that land contaminated with PFAS should be given preferential treatment in determining which projects to approve. After providing an opportunity for public comment, the Commission issued an order on July 24, 2024, responding to the comments and publishing the final version of Chapter 397. Under the final rule, the Commission must issue its first procurement RFP no later than November 10, 2024.

In reviewing proposals under this program, the Commission will first determine whether a project is an Eligible Class IA (i.e., renewable) resource project. If the project is eligible, the Commission will give preference to those located on PFAS-contaminated land that has been determined by the Maine Dept of Agriculture, Conservation & Forestry to no longer be useable for its current or historical agricultural purposes.

Further, projects eligible for selection must have a net positive value for Maine ratepayers. In particular, for the Commission to approve a project, the cost of the contract must be outweighed by the economic benefit to Maine ratepayers. Benefits may include renewable energy credits (“RECs”) sold below their market value to help the state meet its renewable energy goals, or, reduced transmission-related costs.

The possibility of renewable energy projects utilizing contaminated land may offer an alternative financial pathway for farmers and landowners whose means of livelihood have been taken away. Given the likely additional cost of developing such contaminated land and the strict project approval requirements put in place by Chapter 397, it is unclear whether solar developers will choose to engage in the RFP process. Hence, whether the intent of the Maine Legislature in setting up the framework for this program will be achieved is far from certain.

Maine DEP Issues PFAS in Products Concept Draft Rule

The Maine DEP’s PFAS in Products Program has released its long-awaited Chapter 90 concept draft language (the “PFAS in Products Rule”) for implementation of Maine’s recently-amended “PFAS in Products Law.” The concept draft provides additional details on sales prohibitions for products and product components containing intentionally added PFAS, along with criteria DEP will require as part of forthcoming Currently Unavoidable Use (“CUU”) proposals for products or product categories with upcoming sale prohibitions in the State.

The release of the concept draft of the PFAS in Products Rule was made as part of an informal outreach process through which DEP is soliciting public input. Comments are due August 30, 2024; DEP plans to proceed with formal rulemaking later this fall.

“Currently unavoidable use” is defined in Maine’s PFAS in Products Law as a use of PFAS that DEP has determined by rule to be “essential for health, safety or the functioning of society and for which alternatives are not reasonably available.” See 38 M.R.S. § 1614.

Notably, under the concept draft the Department will only consider CUU proposals submitted between 18 and 36 months in advance of an applicable sales prohibition. Thus, absent an exemption to this timeframe, it does not appear DEP will entertain any CUU proposals for the following products or product categories containing intentionally added PFAS with sales prohibitions set to take effect on January 1, 2026:

• cleaning products
• cookware products
•  cosmetic products
• dental floss
• juvenile products
• menstruation products
• textile articles
• ski wax
• upholstered furniture

Similarly, it appears DEP would not begin to consider CUU proposals for artificial turn and outdoor apparel for severe wet conditions not otherwise accompanied by a PFAS disclosure—the next two product categories with sales bans set to take effect January 1, 2029—until January 1, 2026 at the earliest.  

Individuals with comments on or concerns regarding the concept draft are encouraged to e-mail DEP’s PFAS in Products Program at PFASproducts@maine.gov. 

Preti Flaherty's Environmental Practice Group is closely monitoring Maine DEP's efforts regarding PFAS-related matters. Contact Kevin Osantowski or David Van Slyke if you have any questions on this topic.

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Preti Flaherty attorneys David Van Slyke and Kevin Osantowski contributed to this article.

Biden Administration’s Intent to Designate PFOA and PFOS as CERCLA Hazardous Substances

On January 10, 2022, the U.S. Environmental Protection Agency took a significant step towards fulfilling a Biden Administration goal of bringing per- and polyfluoralkyl substances (“PFAS”) under the regulatory purview of the Comprehensive Environmental Response, Compensation & Liability Act (“CERCLA”) by submitting to the White House Office of Management and Budget a formal plan to designate two PFAS compounds – perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”) – as hazardous substances.

The EPA’s submittal of the proposed rule to the OMB comes after years of delay and several resets to its prior efforts to designate PFAS compounds as hazardous substances under CERCLA and triggers a 90-day review period. Provided the OMB does not take issue with EPA’s proposed rule, at the conclusion of the 90-day review period EPA can publish it in the Federal Register for public comment. Barring setbacks, the EPA could issue a final rule in the summer of 2023. This timeline matches what the Agency laid out in its October 2021 PFAS roadmap.[1] Once implemented, the final rule is likely to trigger a cascade of regulatory requirements including but not limited to release reporting. As the EPA noted in its Fall 2021 Statement of Regulatory Priorities, a hazardous substance designation “would require facilities across the country to report on PFOA and PFOS releases that meet or exceed the reportable quantity assigned to these substances [so as to] enable federal, state, tribal, and local authorities to collect information regarding the location and extent of releases.”[2] The final rule would also permit the EPA and other agencies to seek cost recovery or contribution for costs incurred in connection with cleanup of PFOA and PFOS contamination, as well as subject sites that are or were previously listed on the National Priorities List as Superfund sites to additional review for concerns related to PFAS contamination.

The recent action is yet another indication of the strong desire by the Biden Administration to implement an aggressive federal regulatory framework to address PFAS contamination. Time will tell whether and to what extent federal and state regulatory agencies are willing to utilize any forthcoming hazardous substance designations as a basis for re-engaging potentially responsible parties to fund and/or perform additional remedial measures at Superfund sites to address existing PFAS contamination.

PretiFlaherty attorneys Kevin Osantowski and Jeff Talbert contributed to this article.
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[1] See Office of Land and Emergency Management, PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024, U.S. EPA, https://www.epa.gov/pfas/pfas-strategic-roadmap-epas-commitments-action-2021-2024#olem (last visited Jan. 12, 2022).

[2] See Office of Information and Regulatory Affairs, Fall 2021 Unified Agenda of Regulatory Actions: EPA Statement of Priorities, Executive Office of the President, https://www.reginfo.gov/public/do/eAgendaMain (last visited Jan. 12, 2022).

Massachusetts Department of Revenue Finalizes Brownfields Tax Credit Regulations (830 CMR 63.38Q.1), Effective July 9, 2021

The Massachusetts Department of Revenue (DOR) has finalized brownfields tax credit regulations, effective July 9, 2021.

The Massachusetts brownfields tax credit was established in 1998 by the “Act Relative to Environmental Cleanup and Promoting the Redevelopment of Contaminated Property” (Stat. 1998, c. 206). The “Brownfields Act,” as it is generally known, also included amendments to Mass. Gen. Laws Chapter 21E (the Massachusetts Oil and Hazardous Material Release Prevention and Response Act) and thus created financial incentives and liability relief for parties undertaking brownfields development projects. Now codified as M.G.L. c. 62 §6(j) and M.G.L. c. 63 §38Q, brownfields tax credits are based on “net response and removal costs” incurred by a qualifying taxpayer or nonprofit organization during the redevelopment of a qualifying “brownfield” site. Reflecting the close relationship between the credit and activities undertaken pursuant to Chapter 21E, “net response and removal costs” are defined as “expenses paid by the taxpayer for the purpose of achieving a Permanent Solution or Remedy Operation Status in compliance with Chapter 21E.”

Since 1998, DOR has issued numerous Technical Information Releases and Directives that have served as guidance for those seeking to obtain brownfields tax credits. These regulations are the first effort by DOR to codify its practices and are the culmination of a process begun in 2020 when DOR published a “working draft” of the regulations. In an email to stakeholders on July 8, 2021, DOR announced the effective date of the regulations (July 9, 2021) and also that it would be issuing “a revised administrative procedure for the program.”

DOR’s announcement also provided the following summary of the changes to the brownfields tax credit program:

Regulation

• Scope of Review on Appeal – For partial appeals, DOR will review only the denied portion of an application; the approved portion of an application will only be reviewed if there was a material misrepresentation or omission.
• Denial Explanation – DOR will provide an explanation for each credit denial.
• Asbestos Eligibility – DOR will deem asbestos removal costs to be generally eligible as long as the soil immediately under the building is contaminated and the building’s demolition was required in order to achieve a permanent solution.
• Multiple Releases – For purposes of determining whether an applicant’s costs equal or exceed 15% of the assessed value of the property (as is required to become eligible for the credit), an applicant may aggregate net response and removal costs over a 3-year period when there are multiple contaminated sites on one property.
• Effective Date of Regulation – By its terms, the regulation will go into effect when it is made public on July 9, 2021.

Subregulatory Guidance

• Intake Timeline – When an application is submitted, DOR will contact the applicant within 30 days to notify them of which examiner has been assigned to the case and to outline the application review process.
• Intake Narrative – To accelerate DOR’s initial review, applicants will be directed to provide a narrative explaining why submitted costs are eligible.
• Review Process Updates – Applicants will receive a status update from the examiner assigned to their case every 60 days.
• Expedited Timeline – An expedited process will be established for lower-dollar, less complex BTC projects, i.e. those worth $250K or less. Such applicants will be contacted within 7 days and will receive updates every 30 days.
• Appeals Timeline – DOR has established a timeframe for the processing of appeals. The stages of the process are as follows:

1. Appeal is initiated. This occurs when the Office of Appeals receives the appeal.
2. Initial Scheduling Letter sent. Within 30 days of Stage 1.
3. Complete Appeal filed by Applicant. Within 60 days of Stage 1.
4. Opening Conference held. Within 90 days of Stage 1.
5. Information and Document Requests (IDRs) issued and answered. These are to be issued by the Appeals Officer within 60 days of the Opening Conference (Stage 4) and are to be answered by the Applicant within 30 days after they were issued.
6. Formal Scheduling Letter sent (if no settlement has been reached). Within 60 days after all IDRs have been answered.
7. Formal Hearing held. No later than 60 days after the Formal Scheduling Letter has been issued.
8. Formal Letter of Determination issued. 60 days after the Formal Hearing. If the appeal is complex, this stage may be extended by an additional 90 days.

Many provisions in the proposed regulations reflected DOR practices that have challenged developers of brownfields properties in the past. The provisions that DOR highlighted in its announcement suggest that some, but not all, concerns expressed during the public comment process have been heeded. For example, while asbestos removal costs may now be eligible as an expense “paid for the purposes of achieving a Permanent Solution or Remedy Operation Status in compliance with Chapter 21E,” the new appeals procedure suggests that DOR may continue to attempt to “second guess” decisions made by a claimant’s LSP regarding the nature and scope of remediation. Nonetheless, brownfields tax credits will remain a significant incentive for developers of impacted properties. These new regulations only underscore the importance of considering brownfields credits eligibility in the initial stages of planning a brownfields development project.