IV. Beautiful Beaches

The other logical location for wind farm development in North Carolina is along the Atlantic coast due to the five and six power class winds which are found a mere fifty meters above sea level near North Carolina's Outer Banks and in parts of the Pamlico Sound.136  Additionally, class four winds are found at the same height along the entire coast and above parts of the Albemarle, Core, Croatan, Pamlico, and Roanoke Sounds.137  The noteworthy wind speeds found along the coast create the potential for offshore wind farms, as well as inshore wind farms located in the region's extensive shallow estuaries.  However, like the mountains, the coast is renowned for its pristine natural beauty, its breathtaking scenery, and its ecological significance,138 and North Carolina statutes seek to protect the natural beauty of the region by limiting development.139  These potentially limiting factors present questions that complicate the development of wind farms along the coast in eastern North Carolina.

North Carolina will not be the first state to address the legal issues surrounding coastal wind farm development.  A heated controversy arose in 2002 over the proposed Cape Wind project to be located in Nantucket Sound, off the coast of Massachusetts.140  Litigation ensued in which a primary issue was whether the Commonwealth of Massachusetts had jurisdiction over the proposed wind farm.141  In Ten Taxpayers Citizens Group v. Cape Wind Associates,142 the judge found that the submerged lands four miles offshore on which the proposed wind farm was expected to be built were under federal jurisdiction.143  

Ten Taxpayers cites two other important cases in determining the jurisdiction of coastal states over adjacent waters:  United States v. Maine (Maine I)144 and United States v. Maine (Maine II).145  These cases establish exclusive federal jurisdiction over territorial waters more than three miles from the coastline of a state, with Maine II clarifying federal jurisdiction over Nantucket Sound.146  The three-mile rule limits a state's jurisdiction to three miles seaward147 from the coastline and is codified in Title 43 of United States Code section 1312.148  This statute was interpreted by the Supreme Court in United States v. California,149 in which the Court defined “inland waters,” which are exempt from the three-mile rule.150  Concerning jagged coastlines, the Court held that:

1. In localities where the coast line is deeply indented and cut into, or if there is a fringe of islands along the coast in its immediate vicinity, the method of straight baselines joining appropriate points may be employed in drawing the baseline from which the breadth of the territorial sea is measured.

2. The drawing of such baselines must not depart to any appreciable extent from the general direction of the coast, and the sea areas lying within the lines must be sufficiently closely linked to the land domain to be subject to the regime of internal waters. 151

This determination leads to the conclusion that North Carolina's barrier islands would form the baseline of the state's coast.  From the barrier islands, the State can exercise jurisdiction three miles seaward, as well as over inland waters behind the baseline, which, in North Carolina, includes the sounds.  Thus, any wind farm development located in the Atlantic Ocean within three miles of North Carolina's barrier islands or located in any of the sounds would be subject to state law.

North Carolina's coastal counties152 are subject to the Coastal Area Management Act of 1974 (CAMA).153  CAMA generally provides a context for local governments to work with the State in protecting areas of environmental concern along North Carolina's coast.154  CAMA is a comprehensive Act, regulating all facets of development along the coast as well as adjacent lands and wetlands, and a few sections of CAMA are relevant to the potential for wind farm development.  

CAMA applies to lands adjacent to waters in North Carolina, as well as certain other areas of concern.  On initial reading, it appears CAMA's application will be limited to wind farm projects located onshore or directly associated with waterfront parcels.155  CAMA requires permits for coastal development, stating in North Carolina General Statutes section 113A-118, “every person before undertaking any development in any area of environmental concern shall obtain (in addition to any other required State or local permit) a permit pursuant to the provisions of this Part.”156  Section 113A-118 explicitly addresses the generation of power:

If, within the meaning of [North Carolina General Statutes section 113A-103(5)(b)(3)], the siting of any utility facility for the development, generation or transmission of energy is subject to regulation under this Article rather than by the State Utilities Commission or by other law, permits for such facilities shall be obtained from the Coastal Resources Commission rather than from the appropriate city or county. 157  

When considering the regulations put forth in section 113A-118, it is crucial to look to the definitions.  Section 113A-103 defines a “person” as “any individual, citizen, partnership, corporation, association, organization, business trust, estate, trust, public or municipal corporation, or agency of the State or local government unit, or any other legal entity however designated.”158  This definition, not unlike the definition used in the Mountain Ridge Protection Act, works as a catchall.  “Area of environmental concern”159 is defined in detail in its own code section, North Carolina General Statutes section 113A-113.  In the statute, there are many situations which would constitute “areas of environmental concern,”160 including some that would make likely sites for the situation of wind farms.  Most notably, the definition includes “areas such as waterways and lands under or flowed by tidal waters or navigable waters, to which the public may have rights of access.”161  Therefore, the sounds, tidal rivers, and the Atlantic Ocean within three miles of the beach, are covered under “areas of environmental concern.”162  This means that almost all likely sites for wind energy development in coastal counties will be subject to CAMA, including both waterfront parcels and tidal waters under State jurisdiction.

Finally, it is useful to consider the definition of “development”:163

[A]ny activity in a duly designated area of environmental concern (except as provided in paragraph b of this subdivision) involving, requiring, or consisting of the construction or enlargement of a structure; excavation; dredging; filling; dumping; removal of clay, silt, sand, gravel or minerals; bulkheading, driving of pilings; clearing or alteration of land as an adjunct of construction; alteration or removal of sand dunes; alteration of the shore, bank, or bottom of the Atlantic Ocean or any sound, bay, river, creek, stream, lake, or canal. 164

Under these definitions, it seems that any wind farm construction, most likely to be located in the shallow waters or adjacent shoreline protected by the Act, will constitute development and require a CAMA permit.  However, subsection (b) adds the following caveat:

The following activities including the normal and incidental operations associated therewith shall not be deemed to be development under this section:  

. . . .

(3) Work by any utility and other persons for the purpose of construction of facilities for the development, generation, and transmission of energy to the extent that such activities are regulated by other law or by present or future rules of the State Utilities Commission regulating the siting of such facilities (including environmental aspects of such siting), and work on facilities used directly in connection with the above facilities. 165

When considering section 113A-118(e) alongside section 113A-103(5)(b)(3), it seems that a CAMA permit is not required for the development of a coastal wind farm after all, assuming the activity would be regulated by the State Utilities Commission.  Therefore, even a wind farm set up by a private citizen of the scale of the proposed wind farm in Avery County, it would qualify for the exception via the phrase, “by any utility and other persons”166 if it were defined as coastal development under CAMA.  Under the breadth of the definition for “[p]erson,”167 any individual or any lawful business entity could qualify.

These definitions create two divergent paths.  As discussed below, the Public Utilities Act must be consulted to determine if a wind energy project will fall under its regulations.  If so, the Public Utilities Act will control “to the extent that such activities are regulated by other law.”168  Otherwise, and to the extent not covered by the Public Utilities Act, CAMA still governs.  Thus, it is necessary to look to the Public Utilities Act to determine what wind energy projects will fall under its regulations and to what extent.  

The Public Utilities Act provides the following definition:

'Public utility' means a person . . . owning or operating in this State equipment or facilities for:

1. Producing, generating, transmitting, delivering or furnishing electricity . . . provided, however, that the term 'public utility' shall not include persons who construct or operate an electric generating facility, the primary purpose of which facility is for such person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation. 169  

In addition, “person”170 is defined in a similarly comprehensive manner171 as in other sections of the North Carolina General Statutes.  These definitions suggest that only a larger wind farm, operating for-profit, would be exempt from acquiring a CAMA permit and, instead, subject to the Public Utilities Act.  Separate from a public utility, a “small power producer,”172 is defined in subsection (27a) of the definition section of the Public Utilities Act.  This definition does not apply in the wind energy context, as it is explicitly limited to hydroelectric power.173  

Another section of the Public Utilities Act sets out guidelines for the construction of an electricity generating facility174 and exempts “an electric generating facility primarily for that person's own use.”175  Based on these sections, it is relevant to note that the situation of a wind farm or singular wind turbine will be subject to the Public Utilities Act unless it is a smaller project, primarily for personal consumption, in which case it would be subject to the CAMA permitting process.  In the context of the Public Utilities Act, there will be no outright preclusion of a wind farm project as long as a wind energy entrepreneur follows the proper permitting procedure.

The Public Utilities Act sets forth some guidelines for the siting of transmission lines which concern the environmental impacts of such an activity.  First, a certificate of environmental compatibility is required for the siting of transmission lines.176  To acquire the certification, the operator of the transmission lines is required to obtain an environmental report setting forth, not only the impact of the project, but also potential mitigating actions and alternatives.177  Furthermore, the Public Utilities Act requires a public utility to show that the environmental impact is warranted, in view of other available technology and the economics thereof.178  These statutes suggest the findings set forth in CAMA pertaining to the importance of the environmental resources of the coastal estuaries179 would also apply in the siting of transmission lines under the Public Utilities Act.  These statutes would be especially pertinent to a wind energy project located in coastal waters because transmission lines connecting the turbines to the existing grid would be needed.

It is now necessary to turn back to the regulations of CAMA which apply to wind energy projects that generate electricity for personal use180 as well as some larger, for-profit wind energy projects, to the extent that they are not covered by the Public Utilities Act.181  As discussed above, a CAMA permit will be required for wind farm development in an “area of environmental concern.”182  The permitting process under CAMA is straightforward, with the process of obtaining a permit183 and reasons for denial of a permit application184 clearly codified.  In the case of a permit for development in estuarine waters, a permit can be denied if185 there will be significant adverse effects on water quality, public health, or wildlife as a result, or if “there will be significant adverse effect on the value and enjoyment of the property of any riparian owners.”186  This provision, unlike the others dealing primarily with environmental impact, implicitly speaks to the issue of aesthetics.  The clause, relating to a dredge and fill permit, was litigated in In re Broad & Gales Creek Community Association (“Gales Creek”).187  In Gales Creek, the North Carolina Supreme Court held that “the agency has the authority to deny a permit when there is evidence that the dredging will adversely affect [riparian] owners and when there is evidence that the end product of the dredging will adversely affect such owners.”188  From the Gales Creek holding, it is reasonable to conclude that the adverse affect on the value and enjoyment of riparian property owners by the end result of a project could be reason enough for the denial of a CAMA permit.  If a proposed wind turbine were to be located in estuarine waters, and the construction thereof would require dredging operations, an argument against the issuance of a permit could be that the value or enjoyment of the riparian owners would be adversely affected by the aesthetics or otherwise by the wind energy project.189  However, despite this potential obstacle to wind energy projects that need a CAMA permit, there is authority suggesting that only the dredging operation itself and not the end product need be evaluated.190  

Justice Exum's dissent in Gales Creek takes this position, concluding the Marine Fisheries Commission191 exceeded its statutory authority by considering the effect of the end product.192  This potential hurdle for wind energy projects, while certainly cumbersome, does not act as an outright preclusion of such projects, as, even under the majority opinion in Gales Creek, it would be necessary for the riparian landowners to show adverse affects to merit the agency's denial of the permit.193

The Coastal Resources Commission, as established under CAMA,194 has the authority to promulgate guidelines195 which take the form of administrative rules.196  These rules give some insight as to how CAMA should apply to energy providers.  The rules first set forth a policy statement denoting the benefits of reliable energy and the need for planned development to help protect coastal resources.197  To further this policy objective, the rules go on to require the following:

[P]roposals, plans and permit applications for major energy facilities to be located in or affecting any land or water use or natural resource of the North Carolina coastal area [to] include a full disclosure of all costs and benefits associated with the project.  This disclosure shall be prepared at the earliest feasible stage in planning for the project and shall be in the form of an impact assessment prepared by the applicant as defined in [the definition section of these rules]. 198

The definition of a “major energy facility”199 includes larger facilities with the potential to impact the surrounding land and water of the coastal area.200  The definition includes, but is not limited to, “electric generating facilities 300 [megawatts] or larger.”201  This definition presumably intends to encompass those energy producers that would be considered “public utilities”202 under the Public Utilities Act, as it is unlikely that 300 megawatts would be used at the site on which it was generated.  Thus, the rule extends supplemental requirements under CAMA for those wind energy projects that also fall under the Public Utilities Act.203

Potential wind energy developers also need to consider both the aesthetic and environmental ramifications of a project through an “impact assessment.”204  An impact assessment addresses a variety of concerns, ranging from the impact on wildlife and necessity of a site to be located in an area of environmental concern, to the economic ramifications affecting the community and “a full discussion of potential significant adverse impacts on recreational uses and scenic . . . resources.”205  Like the possible impediment raised by Gales Creek, this requirement of aesthetic harmony is not fatal to any wind energy project.  In fact, the regulation only requires discussion of “significant adverse impacts,”206 insinuating that minor adverse impacts may be overlooked.

With these definitions in mind, it is necessary to once again analyze some of the additional requirements stated in the rules.  Also included in the rules promulgated by the Coastal Resources Commission is a preference for inland sites as opposed to waterfront sites, unless the waterfront location is necessary and proper mitigating steps are taken to reduce both impact to areas of environmental concern and the public's right of access.207  This preference does not greatly vary from the legal framework discussed above; the rule provides for waterfront siting if needed,208 which allows the possibility of waterfront wind energy projects.  The rules also contain a provision stating, “[t]he scenic and visual qualities of coastal areas shall be considered and protected as important public resources.”209  The rule continues, “[e]nergy development shall be sited and designed to provide maximum protection of views to and along the ocean, sounds and scenic coastal areas . . . .”210  Though aesthetic concerns are emphasized, this statute does not preclude projects simply because they will mar a waterfront vista.  Instead, it requires a mitigating effort on the part of the major energy facility to protect views by requiring “maximum protection,”211 not complete protection.  A few additional rules are promulgated concerning the siting of energy facilities,212 but none which pose the dilemma of preclusion to a wind energy project.  However, the additional rules listed would need to be taken into consideration in siting a wind energy project.  Further, although there are some limits to possible locations, the rules allow some leeway in choosing an appropriate site that would not be in conflict with the rule.

Section 146-12 of the North Carolina General Statutes provides for the granting of easements of submerged lands to adjacent landowners.213  This statute requires compliance with any necessary CAMA regulations, among other things.214  There is an exception for “structures constructed by any public utility that provide or assist in the provision of utility service.”215  While this exception may prove helpful for a large-scale project, if a wind energy entrepreneur does not qualify as a “public utility,”216 it may be necessary to obtain an easement, depending on the proposed location of the wind farm.

When considering CAMA, its relation to the Public Utilities Act, and the rules espoused by the Coastal Resources Commission, it is clear that, regardless of the size and purpose of a wind energy project, if it is located in a CAMA regulated area, it will be subject to CAMA, at least to the extent of siting of wind turbines.  The examination of CAMA and the corresponding administrative rules relating to energy production show that although receiving a permit is a multi-faceted and complex process, CAMA does not completely prohibit a wind energy project.  As illustrated in the Gales Creek dissent, even concerns over aesthetics may not prove to be quite the legal threat that they may seem.