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###### Department of Agriculture

###### Rural Utilities Service

###### Rural Housing Service

###### Rural Business-Cooperative Service

          - [Docket No. RUS-24-AGENCY-0035]

# AGENCY:

Rural Utilities Service, Rural Housing Service and Rural Business-Cooperative Service, Rural Development, USDA.

# ACTION:

Notice.

# SUMMARY:

Rural Development (RD), a mission area within the United States Department of Agriculture (USDA) announces its adoption of seven Categorical Exclusions (CEs) from the United States Department of Energy (DOE) under the National Environmental Policy Act (NEPA) to use in RD programs and funding opportunities. This notice describes the categories of proposed actions for which RD intends to use the DOE CEs and describes the consultation between the agencies.

# DATES:

This action is effective upon publication.

# FOR FURTHER INFORMATION CONTACT:

                        Alan Hachey, Environmental Protection Specialist, Environmental and Historic Preservation Division, Rural Utilities Service, 1400 Independence Avenue SW, Mail Stop 1548, Room 4004, Phone: (202) 205-5381; Email:                         *alan.hachey@usda.gov.*

# SUPPLEMENTARY INFORMATION:

## Background

RD's mission is to increase economic opportunity and improve the quality of life for all rural Americans. This mission is met by providing loans, grants, loan guarantees, and technical assistance through a multitude of programs aimed at creating and improving infrastructure, businesses, and housing throughout rural America. RD is divided into three agencies, the Rural Utilities Service, Rural Business-Cooperative Service, and Rural Housing Service, each with unique programs that play an important role in helping RD reach its goals.

                    RD's programs must comply with NEPA, 42 U.S.C. 4321-4347, which requires Federal agencies to consider the environmental effects of their proposed actions in their decision-making processes and inform and engage the public in those processes. Congress enacted NEPA to establish a national policy for the environment, provide for the establishment of the Council on Environmental Quality (CEQ), and for other purposes as detailed on                     *NEPA.gov*                     (                    *ceq.doe.gov*). CEQ issued regulations implementing NEPA, 40 CFR parts 1500 through 1508 (CEQ regulations).                

To comply with NEPA, agencies determine the appropriate level of review of any major Federal action—an environmental impact statement (EIS), environmental assessment (EA), or CE. It is the agency's responsibility, in accordance with NEPA and the CEQ regulations, to prepare documentation that supports their level of review.

Section 109 of NEPA, enacted as part of the Fiscal Responsibility Act of 2023, allows a Federal agency to adopt and use another agency's CEs for a category of proposed agency actions (42 U.S.C. 4336c). To use another agency's CEs under section 109, the adopting agency must identify the relevant CEs listed in another agency's (“establishing agency”) NEPA procedures that cover the adopting agency's category of proposed actions or related actions; consult with the establishing agency to ensure that the proposed adoption of the CE to a category of actions is appropriate; identify to the public the CE that the adopting agency plans to use for its proposed actions; and document adoption of the CE (40 CFR 1501.4(e)(2024)). This notice documents RD's adoption of seven DOE CEs under Section 109 of NEPA for future use in RD programs and funding opportunities.

## II. Identification of the Categorical Exclusions and Additional Conditions for Application

                    RD provides loans, grants and technical assistance to build critical infrastructure like electric, broadband, water systems, and hospitals. The programs expand access to electric, telecommunications, and transportation infrastructure, and support business growth, healthcare, education, housing, and other community essentials.                          ( print page 95171)    

RD has identified the following CEs for adoption, which are listed in DOE's NEPA procedures as CEs B4.1, B4.4, B4.8, B4.13, B4.14, B5.1, and B5.16 of 10 CFR part 1021, subpart D, Appendix B. The final rule establishing or revising CEs B4.13, B4.14, and B5.16 was published by DOE on April 30, 2024 (89 FR 34074-01). The DOE text of each CE has been included in quotations following each identified CE. RD intends to apply these CEs to projects undertaken directly by RD, requiring an approval by RD, or financed in whole or in part through Federal funds made available by RD programs.

RD will review each action and require the preparation of an environmental review document to ensure the following: (1) Consistency with the DOE's NEPA procedures at 10 CFR 1021 Subpart D, Appendix B which require an evaluation of “integral elements” to confirm the proposal will have no significant impacts on the resources identified in DOE environmental procedures; (2) Compliance with RD's NEPA procedures at 7 CFR 1970.52 which address extraordinary circumstances; and (3) Confirmation that the action has not been segmented as required by DOE's NEPA procedures at 10 CFR 1021.410(b)(3). The evaluation of integral elements and segmentation is further described in this section. The evaluation of extraordinary circumstances is further described in Section III.

## B4.1 Contracts, Policies, and Marketing and Allocation Plans for Electric Power

“Establishment and implementation of contracts, policies, and marketing and allocation plans related to electric power acquisition that involve only the use of the existing transmission system and existing generation resources operating within their normal operating limits.”

                    RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions (                    *e.g.,*                     the implementation of or amendments to Power Purchase Agreements (PPAs) entered into by DOE). An example of a project type where this CE could be applied by RD includes, but is not limited to, the implementation of PPAs proposed for funding through the Empowering Rural America Program (NewERA) Program.                

## B4.4 Power Marketing Services and Activities

“Power marketing services and power management activities (including, but not limited to, storage, load shaping and balancing, seasonal exchanges, and other similar activities), provided that the operations of generating projects would remain within normal operating limits. (See B4.14 of this appendix for energy storage systems.)”

                    RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions (                    *e.g.,*                     advanced metering infrastructure, distribution automation, energy storage systems, load control). An example of a project type where this CE could be applied by RD includes, but is not limited to, the funding of grid modernization infrastructure through the Electric Infrastructure Loan & Loan Guarantee, NewERA, or Powering Affordable Clean Energy (PACE) Programs to integrate renewable energy generation projects.                

## B4.8 Electricity Transmission Agreements

“New electricity transmission agreements, and modifications to existing transmission arrangements, to use a transmission facility of one system to transfer power of and for another system, provided that no new generation projects would be involved and no physical changes in the transmission system would be made beyond the previously disturbed or developed facility area.”

                    RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions. (                    *e.g.,*                     new electricity transmission agreements or modifications to existing agreements). An example of a project type where this CE could be applied by RD includes, but is not limited to, modifications to existing agreements that enable the transmission of power from renewable energy projects proposed for funding through the Electric Infrastructure Loan & Loan Guarantee, NewERA, or PACE Programs.                

## B4.13 Upgrading and Rebuilding Existing Powerlines and Related Provisions

“Upgrading or rebuilding existing electric powerlines, which may involve relocations of small segments of the powerlines within an existing powerline right-of-way or within otherwise previously disturbed or developed lands (as discussed at 10 CFR 1021.410(g)(1)). Upgrading or rebuilding existing electric powerlines also may involve widening an existing powerline right-of-way to meet current electrical standards if the widening remains within previously disturbed or developed lands and only extends into a small area beyond such lands as needed to comply with applicable electrical standards. Covered actions would be in accordance with applicable requirements, including the integral elements listed at the start of appendix B of this part; and would incorporate appropriate design and construction standards, control technologies, and best management practices. This categorical exclusion does not apply to underwater powerlines. As used in this categorical exclusion, “small” has the meaning discussed at 10 CFR 1021.410(g)(2).”

The terms “small” and “small-scale” are defined in 10 CFR 1021.410(g)(2), and RD agrees to apply the adopted CEs in a manner consistent with DOE's definitions.

RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions (upgrading or rebuilding powerlines located in existing rights of way or within otherwise previously disturbed or developed lands). An example of a project type where this CE could be applied by RD includes, but is not limited to, the upgrading or rebuilding of an existing overhead or underground powerline relocating within an existing utility or transportation right-of-way or within otherwise previously disturbed or developed lands proposed for funding through the Electric Infrastructure Loan & Loan Guarantee Program. RD would not apply this CE to underwater powerline projects.

## B4.14 Construction and Operation of Electrochemical-Battery or Flywheel Energy Storage Systems

“Construction, operation, upgrade, or decommissioning of an electrochemical-battery or flywheel energy storage system within a previously disturbed or developed area or within a small (as discussed at 10 CFR 1021.410(g)(2)) area contiguous to a previously disturbed or developed area. Covered actions would be in accordance with applicable requirements (such as land use and zoning requirements) in the proposed project area and the integral elements listed at the start of appendix B of this part, and would incorporate appropriate safety standards (including the current National Fire Protection Association 855, Standard for the Installation of Stationary Energy Storage Systems), design and construction standards, control technologies, and best management practices.”

                    RD does not have an existing CE that addresses certain energy storage systems. Adoption of this CE would benefit RD by covering applications with these types of energy storage systems. RD intends to apply this CE in                           ( print page 95172)                        a manner consistent with DOE's application—to the same types of actions (energy storage systems located within a previously disturbed or developed area or within a small area contiguous to a previously disturbed or developed area). An example of a project type where this CE could be applied by RD includes, but is not limited to, the construction of battery energy storage systems within or adjacent to existing substation sites funded through the Electric Infrastructure Loan & Loan Guarantee, NewERA or PACE Programs.                

## B5.1 Actions To Conserve Energy or Water

“(a) Actions to conserve energy or water, demonstrate potential energy or water conservation, and promote energy efficiency that would not have the potential to cause significant changes in the indoor or outdoor concentrations of potentially harmful substances. These actions may involve financial and technical assistance to individuals (such as builders, owners, consultants, manufacturers, and designers), organizations (such as utilities), and governments (such as state, local, and tribal). Covered actions include, but are not limited to weatherization (such as insulation and replacing windows and doors); programmed lowering of thermostat settings; placement of timers on hot water heaters; installation or replacement of energy efficient lighting, low-flow plumbing fixtures (such as faucets, toilets, and showerheads), heating, ventilation, and air conditioning systems, and appliances; installation of drip-irrigation systems; improvements in generator efficiency and appliance efficiency ratings; efficiency improvements for vehicles and transportation (such as fleet changeout); transportation management systems (such as traffic signal control systems, car navigation, speed cameras, and automatic plate number recognition); development of energy-efficient manufacturing, industrial, or building practices; and small-scale energy efficiency and conservation research and development and small-scale pilot projects. Covered actions include building renovations or new structures, provided that they occur in a previously disturbed or developed area. Covered actions could involve commercial, residential, agricultural, academic, institutional, or industrial sectors. Covered actions do not include rulemakings, standard-settings, or proposed DOE legislation, except for those actions listed in B5.1(b) of this appendix.

(b) Covered actions include rulemakings that establish energy conservation standards for consumer products and industrial equipment, provided that the actions would not: (1) Have the potential to cause a significant change in manufacturing infrastructure (such as construction of new manufacturing plants with considerable associated ground disturbance); (2) involve significant unresolved conflicts concerning alternative uses of available resources (such as rare or limited raw materials); (3) have the potential to result in a significant increase in the disposal of materials posing significant risks to human health and the environment (such as RCRA hazardous wastes); or (4) have the potential to cause a significant increase in energy consumption in a state or region.”

                    RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions. (                    *e.g.,*                     providing financial assistance to organizations such as utility cooperatives). An example of a project type where this CE could be applied by RD to similar project types such as energy efficiency proposals that are funded through the Rural Energy for America (REAP) Program.                

## B5.16 Solar Photovoltaic (PV) Systems and Related Provisions

“The installation, modification, operation, or decommissioning of commercially available solar photovoltaic systems: (1) Located on a building or other structure (such as rooftop, parking lot or facility, or mounted to signage, lighting, gates, or fences); or (2) Located within a previously disturbed or developed area. (b) Covered actions would be in accordance with applicable requirements (such as land use and zoning requirements) in the proposed project area and the integral elements listed at the start of appendix B of this part and would be consistent with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity, and incorporate appropriate control technologies and best management practices.”

RD intends to apply this CE in a manner consistent with DOE's application—to the same types of actions (solar photovoltaic systems located in previously disturbed or developed areas). An example of a project type where this CE could be applied by RD includes, but is not limited to, the construction of a ground mount solar photovoltaic system within a previously disturbed or developed area being funded through the Infrastructure Loan & Loan Guarantee, NewERA, or PACE Programs. Adoption of this CE by RD would provide significant flexibility to approve solar photovoltaic projects without a predetermined size limit for projects proposed in previously disturbed or developed areas so long as applicable conditions are met. In its environmental review, RD will document how the application of this CE would be consistent with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity, and incorporate appropriate control technologies and best management practices.

*Additional conditions applicable to DOE's CEs:*                     DOE defines “Previously disturbed or developed area” as “land that has been changed such that its functioning ecological processes have been and remain altered by human activity,” and further clarifies that “[t]he phrase encompasses areas that have been transformed from natural cover to non-native species or a managed state, including, but not limited to, utility and electric power transmission corridors and rights-of-way, and other areas where active utilities and currently used roads are readily available.” 10 CFR 1021.410(g)(1). DOE's definition of “Previously disturbed or developed area” is substantially the same as the definition RD uses. RD defines “[p]reviously disturbed or developed area” as “land that has been changed such that its functioning ecological processes have been and remain altered by human activity,” which “encompasses areas that have been transformed from natural cover to non-native species or a managed state, including, but not limited to, utility and electric power transmission corridors and rights-of-way, and other areas where active utilities and currently used roads are readily available.” 7 CFR 1970.6(a).                

The DOE CEs include additional conditions referred to as integral elements (10 CFR part 1021 subpart D, Appendix B). In order to apply the CEs, the action must be one that would not:

(1) Threaten a violation of applicable statutory, regulatory, or permit requirements for environment, safety, and health, or similar requirements of USDA or Executive Orders;

                    (2) Require siting and construction or major expansion of waste storage, disposal, recovery, or treatment facilities (including incinerators), but the proposal may include categorically excluded waste storage, disposal, recovery, or treatment actions or facilities;                          ( print page 95173)    

(3) Disturb hazardous substances, pollutants, contaminants, or Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)—excluded petroleum and natural gas products that preexist in the environment such that there would be uncontrolled or unpermitted releases;

(4) Have the potential to cause significant impacts on environmentally sensitive resources. An environmentally sensitive resource is typically a resource that has been identified as needing protection through Executive Order, statute, or regulation by Federal, state, or local government, or a federally recognized Indian tribe. An action may be categorically excluded if, although sensitive resources are present, the action would not have the potential to cause significant impacts on those resources (such as construction of a building with its foundation well above a sole-source aquifer or upland surface soil removal on a site that has wetlands). Environmentally sensitive resources include, but are not limited to:

(i) Property (such as sites, buildings, structures, and objects) of historic, archeological, or architectural significance designated by a Federal, state, or local government, federally recognized Indian tribe, or Native Hawaiian organization, or property determined to be eligible for listing on the National Register of Historic Places;

(ii) Federally listed threatened or endangered species or their habitat (including critical habitat) or Federally- proposed or candidate species or their habitat (Endangered Species Act); state-listed or state-proposed endangered or threatened species or their habitat; Federally-protected marine mammals and Essential Fish Habitat (Marine Mammal Protection Act; Magnuson- Stevens Fishery Conservation and Management Act); and otherwise Federally-protected species (such as the Bald and Golden Eagle Protection Act or the Migratory Bird Treaty Act);

(iii) Floodplains and wetlands;

(iv) Areas having a special designation such as Federally- and state- designated wilderness areas, national parks, national monuments, national natural landmarks, wild and scenic rivers, state and Federal wildlife refuges, scenic areas (such as National Scenic and Historic Trails or National Scenic Areas), and marine sanctuaries;

(v) Prime or unique farmland, or other farmland of statewide or local importance, as defined at 7 CFR 658.2(a), “Farmland Protection Policy Act: Definitions,” or its successor;

(vi) Special sources of water (such as sole-source aquifers, wellhead protection areas, and other water sources that are vital in a region); and

(vii) Tundra, coral reefs, or rain forests; or

(5) Involve genetically engineered organisms, synthetic biology, governmentally designated noxious weeds, or invasive species, unless the proposed activity would be contained or confined in a manner designed and operated to prevent unauthorized release into the environment and conducted in accordance with applicable requirements, such as those of the Department of Agriculture, the Environmental Protection Agency, and the National Institutes of Health.

The CEs being adopted will be used to determine whether each proposal, individually or cumulatively, will have a significant effect on the human environment. RD will ensure in its review of each action that: it has not been segmented as required by DOE regulations at 10 CFR 1021.410(b)(3); it has been reviewed for integral elements; and that RD is applying the appropriate level of environmental review to the action as required by the CEQ regulations at 40 CFR 1501.3.

## III. Consideration of Extraordinary Circumstances

RD's implementing procedures for extraordinary circumstances at 7 CFR 1970.52 will be used when evaluating projects where the adopted CEs will be applied because both agencies define extraordinary circumstances very closely (see 10 CFR 1021.410(b)(2)). RD procedures for extraordinary circumstances also direct the agency to consider “characteristics of the geographic area affected by the proposal,” and include a list of specific “[s]ignificant adverse environmental effects that the Agency considers to be extraordinary circumstances.” Because RD's definition of extraordinary circumstances includes DOE's definition in its entirety, but also includes additional details that address considerations relevant to RD's programs, RD will rely on the language found in RD's implementing procedures. RD's regulations include the same factors as DOE's regulations, and DOE also requires an evaluation for the integral elements defined in 10 CFR part 1021 Subpart D, Appendix B.

## IV. Consultation With DOE and Determination of Appropriateness

RD and DOE consulted on the appropriateness of RD's adoption of the CEs in February, April, October, and November of 2024. RD and DOE's consultation included a review of DOE's experience developing and applying the CEs, the types of actions for which RD plans to utilize the CEs, and consideration of extraordinary circumstances. These RD actions are similar to the type of projects that DOE undertakes or funds and therefore the effects of RD projects will be similar to the effects of DOE projects, which are not significant, absent the existence of extraordinary circumstances that could involve potentially significant effects. Therefore, RD has determined that its proposed use of the CEs as described in this notice would be appropriate.

## V. Notice to the Public and Documentation of Adoption

This notice serves to identify to the public and document RD's adoption of DOE's CEs, per 40 CFR 1501.4(e)(3) for contracts, policies, and marketing and allocation plans for electric power; power marketing services and activities; electricity transmission agreements; upgrading and rebuilding of existing powerlines, construction and operation of electrochemical-battery or flywheel energy storage systems; actions to conserve energy or water; and solar photovoltaic systems. The notice identifies the types of actions to which RD will apply the CEs, as well as the considerations that RD will use in determining whether an action is within the scope of the CEs.

Issued under authority delegated in 7 CFR 2.17.

Basil I. Gooden,

Under Secretary for Rural Development, U.S. Department of Agriculture.

[FR Doc. 2024-27790 Filed 11-29-24; 8:45 am]

BILLING CODE 3410-XY-P