Coronavirus Impact on Construction of Energy Projects

17 April 2020 Blog
Authors: Darin M. Lowder R. Thomas Hoffmann Jeffery R. Atkin Sunita Paknikar Natalie S. Neals Annie Y. Tsai
Published To: Coronavirus Resource Center:Back to Business Renewable Energy Outlook

(UPDATED as of April 15, 2020 at 5:30 PM ET)

The U.S. Renewable Energy Industry, including its construction market, like every sector of the economy, is being affected by the outbreak of coronavirus. A number of announcements have been made beginning mid-March imposing some local and state restrictions on commercial activities, which in some cases have included limitations on construction activities. While no one knows how long these orders will remain in place, it is clear that the situation is changing constantly. However, the energy industry is a critical infrastructure industry for the nation, and was designated as such by the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA) on March 19, 2020.  

On March 28, CISA updated the guidance regarding essential services (the CISA Advisory). Under the updated guidance, the definition of essential critical industry workers includes “[w]orkers supporting the energy sector through renewable energy infrastructure (including, but not limited to wind, solar, biomass, hydrogen, ocean, geothermal, and/or hydroelectric), including those supporting construction, manufacturing, transportation, permitting, operation/maintenance, monitoring, and logistics” as well as the same categories of workers for renewable energy infrastructure. The updated CISA Advisory followed a March 23 update which clarified that essential workers within the electricity industry included “[w]orkers who maintain, ensure, or restore, or are involved in the development, . . . expansion, or operation of the generation, transmission, and distribution of electric power. . .”  

On March 29, New York’s Governor issued a modification to its previous Order, which reverses the initial position that all construction is essential, and only certain construction is now deemed essential. The New York Empire State Development Corporation was tasked with determining which construction projects are deemed “essential.”  It had already issued Guidance as to what qualifies as an “essential business” on March 27, and an updated FAQ addressing whether construction on energy projects are considered essential was recently provided. The updated guidance clarifies that operational and maintenance work for existing power generation and some construction on new and existing energy projects (including renewable energy) are essential business activities. These guidelines are reiterated in Guidance issued by NYSERDA on March 31, and on a webinar discussion held April 3, NYSERDA indicated that the exceptions would be very narrowly construed. All non-essential construction must be shut down.  At this point, while the new guidance expanded the definition of essential projects beyond utility projects, it is still very restrictive, and hte guidance should be consulted before determining whether an individual project would be considered essential under the New York guidelines.

On April 9, Michigan’s Governor issued Executive Order 2020-42, which extends and modifies the Stay Home / Stay Safe order. The new Order is in effect from April 9, 2020 at 11:59 PM through April 30, 2020 at 11:59 PM, and while the Order continues to exempt Critical Infrastructure Workers, which includes energy workers, it specifically does not adopt any subsequent CISA guidance released after March 19. By limiting the reference to the CISA Advisory as of March 19 (before numerous clarifying updates), the order appears to narrow the list of those in the energy industry that are considered to be critical infrastructure workers in Michigan. Those previously engaged in energy-related construction efforts should review the order closely, as described below.

As a result, at the moment, two things remain clear:

First, operations and maintenance of energy infrastructure, including renewable energy, have not been limited anywhere in the country.

Second, with significant exceptions, very few local governments or states have attempted to limit construction in the energy industry, because it is federally designated as a critical infrastructure industry, and its workers are designated as essential critical infrastructure workers.   

The following resource is meant to track state-level orders that could impact construction in the renewable energy industry, and does not include local orders unless specifically noted. Our updates will serve as a resource for owners, contractors, laborers, suppliers, and financing parties attempting to understand the current landscape. We are planning to monitor many states of special interest to the renewable energy industry, and will seek to stay abreast of developments in those states.

We provide links to government orders and guidance. Every reader should understand that these orders are being drafted quickly to address a national emergency. They may not have the precision of carefully crafted legislation, and many of them leave room for interpretation. However, their intent is generally clear.  If a state wanted to prohibit construction in the energy industry, which appears significantly to have happened in only two states (Pennsylvania and New York) as of today, we anticipate it would be addressed clearly. The decisions are made at the state level, but every state should be aware of the CISA Advisory’s designation of the energy industry as a critical national industry and the updated guidance regarding essential services that specifically defines essential workers as workers who maintain, ensure, or restore, or are involved in the development of electric power.  If you review an order for a particular state, and you are in any doubt, you should call a state government regulatory body, or your legal counsel, for clarification.

 

 State Issued Orders
Summary/Analysis 
 Arizona

•  On March 23, the Governor issued Executive Order 2020-12 which prohibits the closure of essential services.

  The order states that no county, city or town may make or issue an Order, rule or regulation that restricts or prohibits any person from performing any function designated as an essential function.

  Essential Infrastructure Operations are listed as an essential function. These operations include construction, operation and maintenance of utilities, electrical (including power generations and distribution).

No prohibition on construction work for renewable energy projects has been issued.
 California

  Order issued by Governor on March 19

  Order requires all persons to stay at home except as needed to maintain continuity of 16 infrastructure sectors, identified in the CISA Advisor, as vital to the security, public health and safety of the state.

  Energy is listed as one of the critical infrastructure sectors. 

  The federal guidance includes construction workers as workers that are “essential to continued critical infrastructure viability.” 

No state-wide prohibition on construction work for renewable energy projects has been issued.
 Connecticut

•  On March 20, the Governor issued an Order ordering all workers at “nonessential” businesses to stay home. On April 10, the Governor Extended its prohibition until May 20.

  The Department of Economic and Community Development (“DECD”) issued lawfully binding guidance on March 22, about which businesses are essential.

  The following construction categories are considered essential: (i) all skilled trades such as electricians, HVAC, and plumbers, (ii) general construction, both commercial and residential, (iii) other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes, (iv) planning, engineering, design, bridge inspection, and other construction support activities.

•  On April 7, the Governor issued Safe Workplace Rules for Essential Employers that includes rules specific to construction sites.

No prohibition on construction work for renewable energy projects has been issued, but construction operations should confirm compliance with new rules specific to construction sites.
 Florida

•  On March 24, the Governor issued Executive Order 20-83 implementing protective measures for vulnerable populations, gatherings of private citizens, and density of the workforce.

  The Order directs the State Surgeon General and State Health Officer to issue a variety of public health advisories including an advisory against all social or recreational gatherings of 10 or more people and urging those who can work remotely to do so.

•  On March 27, the Governor issued Executive Order 20-86, which requires individuals that enter the State of Florida from any area with “substantial community spread” to self-quarantine for a period of 14 days.  This requirement does not apply to individuals who enter the state for “infrastructure response, or persons involved in any commercial activity”.

•  On April 1, the Governor issued Executive Order 20-91, which requires all residents to stay home except as necessary to obtain or provide essential services or conduct essential activities. "Essential Services" means those listed on the CISA guidance published by the U.S. Department of Homeland Security, which includes workers in the energy industry, as discussed in more detail above. The Governor clarified in Executive Order 20-92 that Executive order 20-91 supersedes any conflicting action issued by local officials.

No prohibition on construction work for renewable energy projects has been issued.
 Georgia

  On March 23, 2020, the Governor issued an Executive Order that ordered: 1) the closure of bars; 2) that no businesses shall allow more than 10 persons to gather at a single location if such gathering requires persons to be within six feet of another person; and 3) certain at-risk populations to isolate, quarantine or shelter in place  This order will remain in effect for 14 days, beginning on March 24, 2020 and continuing until April 6, 2020.

  On April 2, 2020, the Governor issued an updated Executive Order mandating a stay-at-home order to take place.

o  An exception is made for critical infrastructure workers who are actively engaged in the performance of, or travel to and from, their respective employment.

Critical infrastructure shall refer to businesses, establishments, corporations, non-profit corporations, and organizations as defined by the CISA Advisory and suppliers which provide essential goods and services to the critical infrastructure workforce.  This includes the energy sector.

Critical infrastructure that continues in-person operation will abide by specific requirements, such as: screening and evaluating workers who exhibit signs of illness, requiring workers who exhibit signs of illness to not report to work or seek medical attention.

Order goes into effect on Friday, April 3, 2020 at 6:00 PM through 11:59 PM on Monday, April 13, 2020.

No prohibition on construction work for renewable energy projects has been issued.
 Illinois

•  Stay at Home Order issued by Governor on March 20, 2020 in effect until April 30, 2020.

  Order requires all persons to stay home unless leaving for “essential activities,” including performing work providing essential products and services at Essential Businesses or Operations (which includes “Essential Infrastructure” and “Manufacturing” or supplying essential products and services for the energy industry). 

  Essential Infrastructure includes “construction (including, but not limited to, construction required in response to this public health emergency, hospital construction, construction of long-term care facilities, public works construction, and housing construction);”

  The Order notes that, “Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure, broadly defined.”

  Manufacturing includes companies, distributors, and supply chain companies producing and supplying essential products and services in and for industries such as energy.

No prohibition on construction work for renewable energy projects has been issued.
 Louisiana

  On March 22, the Governor issued Proclamation Number 33 JBE 2020, implementing a statewide Stay at Home Order.

  The Governor issued an Extension Order on April 3, 2020 extending the Stay at Home Order until Thursday, April 30, 2020 unless terminated sooner.

  The order makes reference to critical infrastructure workers outlined in the CISA Advisory, which includes energy industry workers.

  The Office of the Governor posted Illustrative Examples of Critical Infrastructure Businesses, which includes construction in connection with Critical Trade, Manufacturing, and Essential Infrastructure.  

No prohibition on construction work for renewable energy projects has been issued.
 Maryland

•  On March 23, the Governor issued Executive Order 20-03-23-01, to close all non-essential Maryland businesses, effective at 5 PM the same day, and to announce a $175 million business relief program for state business and workers. The Governor adopted the federal guidelines issued in the CISA Advisory about “critical infrastructure sectors” to define those businesses that would be deemed essential and not subject to closure.  

•  The “non-exhaustive” list of businesses, organizations and facilities in the Interpretive Guidance identified 89 industries/businesses in the fifteen sectors including Commercial Facilities, which includes commercial construction, and Energy.

  On March 30, the Governor issued a stay-at-home order requiring all persons living in Maryland to stay in their homes except for essential activities. The Order is effective on March 30 at 8:00 PM.

No prohibition on construction work for renewable energy projects has been issued.
 Massachusetts

  On March 15, 2020, the Governor issued an Order prohibiting the assemblage of people in groups of over 25 people.  

  The related Guidance issued with the Order specifies that the Order does not apply to normal operations at airports, bus and train stations, medical facilities, libraries, shopping malls and centers, polling locations, grocery or retail stores, pharmacies, or other spaces where 25 or more persons may be in transit. 

  On March 23, the Governor issued an Order requiring all businesses and organizations that do not provide “COVID-19 Essential Services” to close their physical workplaces and facilities to workers, customers and the public as of Tuesday, March 24th at noon until Tuesday, April 7th at noon.  

  The list of “COVID-19 Essential Services” includes construction related to critical or strategic infrastructure, which includes energy services.

•  The state has also published FAQs that address questions related to energy and expressly states that construction and development of electric generation, including residential solar, are considered essential.

  Boston and Cambridge have halted all construction in their respective cities. All projects must be stopped and the work zones secured for at least two weeks (until April 5). 

No prohibition on construction work for renewable energy projects has been issued other than local restrictions in Cambridge and Boston.
 Michigan

  The Governor issued a “Stay Home / Stay Safe” Order, effective on March 24, at 12:01 AM, which exempted Critical Infrastructure Workers as defined in the CISA Advisory, which includes energy workers. Previously on March 16, the Governor had issued an Order which temporarily prohibited large assemblages and events and school closures, but had exempted construction activities from the Order.

  The Stay Home/Stay Safe Order is in effect from March 24, 2020 at 12:01 AM through April 13, 2020 at 11:59 PM.

•  On April 1, the Governor issued Executive Order 2020-33, rescinding and replacing Executive Order 2020-4 which declared a state of emergency, but did not rescind or replace the Stay Home / Stay Safe Order. The new Order declares a state of emergency expansion and a state of disaster, and mandates the Emergency Management and Homeland Security Division of the Department of State Police to coordinate and maximize all state efforts to assist local governments and officials. The state of emergency and state of disaster will terminate when such conditions cease and appropriate recovery programs have been implemented.

•  On April 9, the Governor issued Executive Order 2020-42. The Order extends and modifies the Stay Home / Stay Safe order, and also rescinds Executive Order 2020-21. The new Order is in effect from April 9, 2020 at 11:59 PM through April 30, 2020 at 11:59 PM.

•  The Order continues to exempt Critical Infrastructure Workers, which includes energy workers, but does not adopt any subsequent CISA guidance released after March 19.

o  By narrowing the CISA reference to the guidance in place as of March 19 in the latest order, references in the current CISA Advisory that specify that workers involved in the expansion and development of power projects (and
No specific prohibition on construction work for renewable energy projects
has been issued. However, updates contained in the April 9 order that limit the reference to the CISA Advisory that specify that workers involved in the expansion and development of power projects (and renewable energy projects specifically) are not included in Michigan’s definition of critical or
essential industries and their workers. As a result, only the manufacture of energy materials and products, and the operation, maintenance and restoration of energy facilities for the generation, transmission and distribution of electric power are clearly included at this time.

o   In an undated FAQ related to the April 9 order, construction generally is restricted to construction needed to maintain and improve roads, bridges,
telecom and public health infrastructure.

No specific prohibition on
construction work for
renewable energy projects
has been issued. However,
updates contained in the
April 9 order that limit the
reference to the CISA
Advisory to the version of
March 19 (before
numerous clarifying
updates) appear to narrow
the list of those in the
energy industry that are
considered to be critical
infrastructure workers.
Those previously engaged
in energy-related
construction efforts should
review the order closely.
 New Jersey

  On March 21, the Governor issued an Order ordering all residents to stay home and all nonessential retail businesses to close by 9 PM on March 21. 

  To the extent a business or non-profit has employees that cannot perform their functions via telework or work-from-home arrangements, the business or non-profit should make best efforts to reduce staff on site to the minimal number necessary to ensure that essential operations can continue.

  Examples of employees who need to be present at their work site in order to perform their job duties include construction workers.

No prohibition on construction work for renewable energy projects has been issued.
 New York

  The Governor issued an Order mandating that 100% of the workforce must stay home, but excludes those providing essential services from the order. 

  A previous order had defined essential services generally, and further Guidance provided additional detail on what constitutes an “Essential Service,” which specified that Construction, including skilled trades such as electricians and plumbers and other related construction firms and professionals for infrastructure or for emergency repair and safety purposes are included as essential services. 

  On March 29, the Governor issued a modification to the previous Order, which reverses the initial position that all construction is essential.  At this time, only “certain construction” is deemed essential, and the New York Empire State Development Corporation is tasked with determining which construction projects are deemed “essential”.

•  The Empire State Development Corporation issued Guidance as to what qualifies as an “essential business” on March 27.  The guidance states that the operation of public and private utilities including power generation constitute essential infrastructure, and that “essential construction… includes…utilities.” All non-essential construction other than emergency construction must be shut down.  In addition, any construction sites that remain in operation must maintain appropriate social distancing. 

The Empire State Development Corporation recently issued an updated FAQ addressing whether construction on energy projects are considered essential. The FAQ’s clarify that operational and maintenance work for existing power generation, and construction on existing or expanding grid or other critical infrastructure are essential business activities, as are new renewable energy projects that are necessary to the continued operation of any of the above. Specifically, construction on energy projects servicing transit facilities, health care facilities, affordable housing and homeless shelters are explicitly identified as being essential, as are utility scale new power generation for projects with an in-service date of September 1 or sooner. A process for appealing to be considered an essential project is provided in the guidance.

o  These guidelines were reiterated in guidance issued by NYSERDA on March 31, and on a webinar discussion held on April 3, NYSERDA indicated that the exceptoins would be very narrowly construed.

Updated guidance clarifies that operational and maintenance work with respect to existing power generation, and construction activities related to existing or expanding grid or other critical infrastructure are essential business activities, as are new renewable energy projects that are necessary to the continued operation of any of the above, and utility scale projects expected to be placed in service by September 1. NYESRDA has suggested that these exceptions would be very narrowly interpreted.  All other new power generation and new construction is considered non-essential and must be suspended.
 North Carolina

  On March 23, the Governor issued an Order limiting mass gatherings. The Order is effective at 5:00 PM on Wednesday, March 25, 2020, and shall remain in effect for 30 days unless rescinded or superseded.

  On March 27, the Governor issued an Order requiring all individuals in the state to stay at home and to leave only for essential activities, essential government operations, or to participate in or access COVID-19 essential businesses and operations, including businesses operating in critical infrastructure sectors. The Order also requires non-essential businesses and operations to cease. The Order is effective March 30, 2020 at 5:00 PM and shall remain in effect for 30 days unless repealed, replaced, or rescinded.

  The Order defines a mass gathering as any event or convening that brings together more than 10 persons (down from 100 and 50 in previous orders) in a single room or single space at the same time, such as an auditorium, stadium, arena, large conference room, meeting hall, or any other confined indoor or outdoor space. 

  A mass gathering does not include normal operations at airports, bus and train stations, medical facilities, shopping malls and centers. It also does not include office environments, factories, grocery stores, and child care facilities.

No prohibition on construction work for renewable energy projects has been issued. It is reported that local authorities are encouraging special safety measures at construction sites to minimize group interactions.
 Ohio

  On March 9, 2020, the Governor issued an Executive Order declaring a State of Emergency and ordered all citizens to heed the advice of the Department of Health.  

•  On March 22, 2020, the Ohio Department of Health issued a Director’s Stay At Home Order that requires businesses to cease all activities except minimum basic operations, and encourages all “Essential Businesses and Operations” to remain open.

  The Director’s Order defines construction and power generation and distribution as Essential Infrastructure, and Essential Infrastructure is a subset of Essential Business and Operations.

•  The Director’s Order went into effect on March 23, 2020 at 11:59 p.m. and will remain in place until April 6, 2020 unless it is rescinded or modified.

  Ohio’s Stay-at-Home order has been extended until May 1, 2020.

No prohibition on construction work for renewable energy projects has been issued.
 Oregon

  On March 23, the Governor issued Executive Order 20-12, ordering individuals to stay at their place of residence and avoid non-essential social and recreational gatherings, regardless of size, and requiring certain businesses to close, for which close personal contact is difficult or impossible to avoid.

  The order also requires all businesses to implement work-from-home strategies to the extent possible. If impossible, the business must establish appropriate social distancing policies.

No prohibition on construction work for renewable energy projects has been issued.
 Pennsylvania

  On March 19, the Governor issued an Order that prohibits operation of business that is not a “life sustaining business regardless of whether the business is open to members of the public”

  Order includes a list of life sustaining businesses that may remain open (updated on March 20, 2020)

  No construction industries are deemed life sustaining per such list, except that emergency repairs are permitted

  Enforcement actions will be taken against non-compliant businesses beginning March 23, 2020 at 8:00 A.M.

  On March 24, the Governor published a list of frequently asked questions regarding what constitutes a life-sustaining business.  The guidance suggests that any industry not included on the Governor’s prior list of life-sustaining businesses should suspend operations.  Any business that is not considered “life sustaining”, but is included in any “critical infrastructure category” on the CISA Advisory should submit a waiver to the Pennsylvania Department of Community and Economic Development to seek an exemption from the Governor’s order.

Construction work on renewable energy projects must be suspended until further notice. Construction of renewable energy projects may fall into a critical infrastructure category and may be entitled to a waiver from the state; however, construction should remain suspended until a waiver is obtained.

A Department of Community and Economic Development spokesperson has reported receiving over 15,000 such waiver requests (state-wide for all sectors) as of March 24.

 Texas

  On March 19, the Governor issued Executive Order No. GA-08 relating to COVID-19 preparedness and mitigation.

  The Order is effective on a statewide basis at 11:59PM on March 20, and continuing until 11:59PM on April 3, subject to extension.

  The order states that all critical infrastructure will remain operational.

No prohibition on construction work for renewable energy projects has been issued.
 Wisconsin

•  On March 24, the Governor issued an Order that requires the closure of all businesses in the state except those deemed “Essential Businesses and Operations.”

•  The Order defines energy as a critical infrastructure sector, and considers construction as an essential business.

•  The Order went into effect on March 25, 2020 at 8:00 a.m. and will remain in place until April 24 unless suspended by a subsequent order.

No prohibition on construction work for renewable energy projects has been issued.

For more information about recommended steps, please contact your Foley relationship partner. For additional web-based resources available to assist you in monitoring the spread of the coronavirus on a global basis, you may wish to visit the CDC and the World Health Organization.

Foley will continue to keep you apprised of relevant developments. Click here for Foley’s Coronavirus Resource Center for insights and resources to support your business during this challenging time. To receive this content directly in your inbox, click here and submit the form. 

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