Construction of Power Facilities Is ‘Essential’ in California

Ahead of most of the U.S., California state and local officials in the first weeks of March adopted some of the earliest and strongest steps to restrict movement and close non-essential businesses in order to fight the spread of the COVID-19 disease. One of the key challenges in implementing these “shelter-in-place” orders was how to allow “essential personnel” to build, operate, and maintain critical infrastructure. It was clear that operating and maintaining power plants, transmission facilities, and utility infrastructure was critical to the state’s resilience in the face of the pandemic. What about construction of new power facilities?

At the state level, California has set up a coordinated system to identify, prioritize, and protect critical infrastructure in the face of threats from wildfires, earthquakes, and other natural disasters; terrorism and cyberattacks; and longer-term threats like climate change. State agencies—such as the Critical Infrastructure Protection Division of the Governor’s Office of Emergency Services, the California Department of Food and Agriculture, the California Energy Commission, and the Department of Water Resources—have thus been able to partner quickly to address the impact of COVID-19 on the power grid and other key infrastructure.

On March 4, 2020, California Gov. Gavin Newsom declared a public emergency as a result of the COVID-19 pandemic, and on March 19, 2020, in Executive Order N-33-20, Gov. Newsom directed Californians to stay home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors,” among other exceptions. With respect to the power sector, guidelines provided by the California State Public Health Officer, updated on March 22, 2020, in response to the Governor’s order, expressly permit essential personnel, among others, to continue their work, and to travel to and from workplaces. The document specifically lists “Workers who maintain, ensure, or restore the generation, transmission, and distribution of electric power, including call centers, utility workers, reliability engineers and fleet maintenance technicians” as “Essential Critical Infrastructure Workers.”

The state’s March 22 clarification as to what constitutes essential critical infrastructure workers includes, for the power sector, only operation and maintenance of existing power generation, transmission, and distribution facilities, along with manufacturing and supply of necessary equipment. Construction in other sectors (like communications, certain public works, and housing) is expressly deemed “essential,” but for the electric power sector the essentiality of construction work is only implicit in the March 22 statement.

The blanket exemption for other government operations and essential functions covers “Construction Workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects… [and] Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, construction material sources, and essential operation of construction sites and construction projects (including those that support such projects to ensure the availability of needed facilities, transportation, energy and communications…).” State officials have clarified informally that construction of new power plants—including the wind farms and solar power installations so crucial to the state’s goals of energy diversity and greenhouse gas reductions—is an essential activity.

To protect construction workers and public health, safety protocols (including social distancing) must be observed. For example, orders of the City of Los Angeles, most recently on April 7, 2020, require non-medical workers in businesses exempt from mandatory closures to wear face coverings (other than N95 respirators or medical grade masks, which are reserved for medical personnel and first responders) and to have access to frequent hand washing. Other local ordinances require essential workers to wear personal protective equipment and practice adequate spacing. Many job sites ban workers diagnosed with COVID-19 or showing symptoms.

An Order of the Health Officer of Santa Clara County dated March 31, 2020, which is typical, requires that “when people need to leave their place of residence for the limited purposes allowed in this Order, they must strictly comply with Social Distancing Requirements” except as otherwise provided therein, and “All individuals must strictly comply with Social Distancing Requirements, except to the limited extent necessary to provide care (including childcare, adult or senior care, care to individuals with special needs, and patient care); as necessary to carry out the work of Essential Businesses, Essential Governmental Functions, or provide for Minimum Basic Operations; or as otherwise expressly provided in this Order.”

State and local ordinances may differ on the specific mandates for social distancing, limited movement, and business closures. As a general rule, if a local ordinance is stricter than a state ordinance, individuals and businesses must comply with the stricter local ordinance. However, if the state carves out certain facilities and related activities as “essential” and the local ordinance does not contain such carve-outs, the local ordinance should be interpreted in light of the exemptions set forth in the state ordinance. Local ordinances should be viewed as illustrative and not exhaustive, unless otherwise stated, and they may implicitly or explicitly incorporate state categories of essential infrastructure and related activities. That said, local public health officials do have legal authority under the California Health and Safety Code to impose limitations on non-residential activity that are more restrictive than the baseline set out in the Governor’s orders.

More broadly, some local and state ordinances incorporate federal recommendations provided by the Cybersecurity and Infrastructure Security Agency (CISA) of the U.S. Department of Homeland Security, in its “Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response.” If not made binding through state or local orders, the CISA categories serve only as recommendations and are not mandates or binding on their own. CISA recommends that essential critical infrastructure workers be exempt from stay-at-home orders adopted by states and localities. Some states “include” or “encompass” the federal categories in their orders without making them exhaustive. Workers employed in the energy sector “through renewable energy infrastructure (including, but not limited to, wind, solar, biomass, hydrogen, ocean, geothermal, and hydroelectric)” or “supporting the energy sector, regardless of the energy source (including, but not limited to, nuclear, fossil, hydroelectric or renewable),” or “providing services related to energy sector fuels (including, but not limited to, petroleum [crude oil], natural gas, propane, liquefied natural gas [LNG], compressed natural gas [CNG], natural gas liquids [NGL], other liquid fuels, nuclear, and coal)” are all identified in the CISA recommendations as essential critical infrastructure workers.

With California’s early, expansive and exacting implementation of shelter-in-place protocols, and continuing and evolving guidance and coordination among agencies, California has set a useful template for other states balancing competing policy goals, such as maintaining the construction and operation of critical energy infrastructure, advancing environmental and economic goals, and protecting public health.

Allan T. Marks is a partner with Milbank LLP.