Blown Away

By Daniel Richardson

In re Joint Petition of Green Mountain Power Corp., 2012 VT 89.

Today’s case is one of the first in what will likely be a series of cases sparked by the spate of wind turbine construction throughout Vermont by various utilities and private companies.  As we have previously seen, challenges to overturn the decisions of the Public Service Board face an uphill battle, and today’s case is no exception.

This is because the Board is really a quasi-adjudicative body.  It is primarily a regulatory agency, and as such, its decisions are given deference by the SCOV, who is usually more than happy to leave the policy or fact-finding portions of the decision intact short of overwhelming evidence to the contrary. 

In theory this is neither good nor bad.  We expect administrative proceedings to be different—a little stilted, and focused on a particular area of specialization. 

In practice, this framework tends to favor the developers of projects who gain a great deal of experience and sophistication before the Board and as a result are able to navigate its regulatory process better than the random opponent who may or may not have competent counsel.  On top of this is the traditional regulatory problem of proof.  Often the burden of proof falls upon the applicant to show no harm will come from a project, but with Board matters, the issue is public good. 

A project can have all kinds of problems coughvermontyankeeahem.  But if its public good outweighs the problems, the project will be approved.  Moreover, the harm is usually potential future harm, and the Board often grants applicants the benefit of the doubt if they can make a basic showing.  In other words, the applicant has the burden, but the floor is low.  Once the burden is met, the opposition carries the difficult burden of trying to prove that it will not be as rosy as the applicant says it will.

Trying to oppose such an argument is often like trying to follow three-card monte.  There is the harm.  There is the benefit.  There is the standard of proof.  But they keep moving around.  You prove the harm, but then you have to prove that it outstrips the public good.  Now you are trying to nail down the public good.  Whoops, you are speculating about the factual issues and the applicant has established the limits of the harm through expert opinions in its application. 

The result is you lose more than you win.  To be fair, though, the Board is not like court.  It is not about winning and losing.  It is about regulating utilities for the public benefit.  Sometimes that means a project needs to be approved that has some cost to the environment.  Usually, it means approving a project with conditions in place to assure that the harm is minimized and the benefit maximized.  In this way, a Board proceeding often resembles an Act 250 hearing where only the opponent is trying to shut the project down, and everyone else—including the regulating body—is trying to figure out how to make it work. 

Let that be prologue to the present action, which is the first major cut for the SCOV at the Lowell Mountain Wind Turbine Project that GMP recently installed.  For those that have not followed the extensive coverage of this issue, go read about it on Vermont Digger. 

For more than three years, Green Mountain Power sought to install 21 wind turbines along the Lowell Mountain ridge.  While some supported the project, others did not.  These opponents included various citizen groups, neighbors and at least two towns located within the ridge’s view shed.  It is the appeal of these two towns that concerns the SCOV’s review. 

More specifically, it is the certificate of public good that is under the SCOV’s scrutiny.  What make today’s case interesting is that GMP admits and the Board accepts out front that the project includes a number of negative environmental impacts.  There is no doubt that installing 400-foot wind turbines will affect the aesthetics of the ridge line, the habitat of birds, bats, and other indigenous creatures.  There is no dispute that the long blades spinning in the wind will create ice issues, noise issues.  And there is no dispute that the wide road and blasting that the project requires will fragment animal habitats.

The critical difference for GMP is that it had secured the cooperation of the Agency of Natural Resources and agreed to various conditions to monitor and maintain the turbines to specific levels.  This understanding was reduced to a Memorandum of Understanding (MOU).  This agreement with ANR mixed with GMP’s willingness to allow permit conditions and to make additional compromises on late emerging problems proved to be a winning tri-parte strategy and basis for GMP to earn a CPG from the Board. 

On appeal, it appears that the oppositional Towns took several issues to the SCOV for review.  Unfortunately, none of them proved particularly persuasive or effective to dislodge the tri-parte reasoning underlying the Board’s decision.  Let us, like the SCOV, take them one at a time.

First up is the issue of noise.  The Towns argued a few points here.   First, they argued that GMP’s modeling (noise projection model) was wrong.  Second, they argued that the PSB’s noise limits (45-db outside and 30-db inside) would be impossible to meet and were not the proper measurements.   Third, they argued that GMP needed to do additional, site-specific modeling that would give a more accurate picture of the “worst-case scenario” noise. 

The SCOV goes straight up the middle.   The Board’s noises standards come from the World Health Organization and are standard and specific.  No error in adopting them.  GMP’s modeling (including various underlying assumptions about the wall of a house being able to reduce noise by 15-db) was sufficient to carry its burden.  To the extent that GMP’s models are insufficient, the CPG requires GMP to continue to monitor the noise and to modify the use to ensure compliance.  Basically, the SCOV says, “good enough,” and if it is not, then GMP has to fix it.  No error and no reversal here.

So let’s line up the second argument from the Towns about the turbines themselves.  The Towns attempted a little monte of their own here.  They note that the Board had approved this as a 63-megawatt project, but that it had also approved a type of turbine blade that the Towns noted would generate 64.575 megawatts.  The Towns suggested that the 63 MW limit controls, and that the Board should have only allowed 20 turbines (instead of 21) to keep GMP, just below the limit without going over.  The Towns further argued that the additional megawatts required an addendum and additional filing to the original application that GMP never made.

The SCOV does not buy it.  The turbine blades were among the various blades approved by the Board for the project.  It had also approved 21 turbines, and the resulting 1.575 MW difference was too insubstantial to merit an addendum.

So let’s move to the next category of state-significant natural communities.  The Towns argued that the project would create undue adverse impacts on these recognized natural habitats.  The SCOV notes that the ANR’s MOU takes care of this issue and cites to expert testimony from ANR that the impact while adverse will not be undue.  This is enough, and the Towns lose again.

This brings us to the Towns’ best argument and the lengthiest portion of the decision.  The Towns argued that the Board erred in allowing GMP to begin construction before it had secured habitat-fragmentation connective easements.  Basically, the MOU, which was incorporated into the CPG, required GMP to secure easements over surrounding forest land to ensure that the habitat of animals such as bears would not be fragmented due to the major road and blasting construction that GMP proposed.  In essence, this term required GMP to secure alternate routes for the wildlife to make up for the fact that it was cutting the forest in half.

The reason why this was a good issue for the Towns is that the Board initially agreed with them.  At the time of the CPG, the Board found that the purpose of the MOU and the easements would not be served unless GMP secured the connective easements prior to beginning construction.   Furthermore, since GMP needed the easements to meet its burden, it would not make sense to go forward with the project until this critical piece was secured.  

At the Board level, GMP had filed a motion for reconsideration asking to be allowed to start construction prior to securing the easements because it was running out of time (the towers had to be up and running before the end of 2012) to receive its federal tax credits. 

The Towns opposed this motion noting that this was GMP’s own mistake.  If it needed this change, it should have asked for it earlier.  Also it frustrated the purpose since the connective easements were needed to preserve the habitat before construction started fragmenting it.  Finally, it noted that the tax credit issue was unrelated to the condition and urged the Board to ignore it. 

Here is where it pays to have friends—or at least entities that are not set against you.  ANR stepped into this dispute and proposed a mid-point modification.  Instead of holding GMP to securing the easements before the start of construction, ANR proposed a December 31, 2011 deadline.  This let GMP start, but did not let them entirely off the hook.  The Board agreed and noted that it had not intended the condition as a project killer.  It modified the CPG accordingly.

The Towns appealed this issue and revived their arguments that the grant created a substantive problem with the wildlife habitat; that the Board improperly considered unrelated economic impacts; and that GMP was not entitled to a post-judgment modification on issues it could have raised.   The SCOV knocks these down quickly.  The economic considerations were properly part of the Section 248 process.  The motion for reconsideration was proper because it was timely, addressed issues that GMP had raised below but that the Board had failed to address; and that the modification limited the potential risk to the habitat by requiring GMP to secure the easements within four months of starting construction.  So despite a good set up, the Towns lose on this point too.

The next section of the SCOV’s decision moves us beyond the CPG to an incident that took place during construction.  GMP secured the necessary wildlife habitation connectivity easements, but in July 2011, GMP reported to the Board that the underlying owner had undertaken unauthorized earthwork and logging activities on the property.  This work effectively disrupted the habitats that the easement had created.  The Board ordered GMP to mitigate and repair the damage.  GMP did and reported that the habitat had been fixed and restored and 172 acres of additional conservation land had been added.

The Towns objected to this report and urged the Board to obtain more exacting proof of the repair and noted that the new land was not part of necessary habitat connectivity.  Underlying this was the assertion that GMP could not have effectively repaired the areas and that the habitats had been ruined. 

Again, ANR weighed in on the matter providing a middle ground.  ANR noted that the logging work was serious and substantial, but it was nothing compared to the road work and blasting occurring at the ridge.  The repair was unlikely to completely restore the area, but the damage would not seriously compromise the area for the purposes of habitat.  Finally, ANR noted that the 172 acres were not adequate substitutes but that they were welcome conservation additions.

The Town responded by demanding a technical hearing on the repair work and mitigation allegedly done.

The Board rejected this request and issued a decision hewing closely to ANR’s position.  The additional land, while not serving the original purpose directly, did broaden the preserved habitat and rendered a benefit.  The logging did not defeat the purpose of the easements.  Finally, the Board denied the hearing because it determined that it did not need a hearing.  It had received statements from the parties and sworn affidavits from experts.  A post-CPG hearing is limited in scope and nature, and the Board believed it had no obligation to hold an expensive hearing where none was needed.  It found that the ANR’s expert had been the most credible, and the Towns’ expert had been the least.

On appeal, the SCOV takes the Town’s position apart in three stages. 

First it notes that the condition, on which the Towns appeal—condition 15—only required GMP to adhere to the MOU with the ANR, and in turn, secure habitat easements.  Neither the condition nor the MOU required GMP to keep the easements pristine or free of any and all logging.  So the Board had a lot of leeway in reviewing the issue.  This was more of an indirect violation than a direct one.

Second, the SCOV notes that there was no statutory or rule requirement binding the Board to have a technical hearing on the issue.  The Towns argued that they had a constitutional due process right to such a hearing. 

At the sound of this argument, out come the knives from SCOV’s law clerks.  Procedural due process is a law school graduate’s dream issue.  It is a difficult, conceptual legal determination that requires analysis, review, tests, and a bit of squinting.  Basically, procedural due process requires an agency or governmental body to follow certain procedures when taking an action affecting someone’s property or liberty interests.  The terms all come with tests and standards and various SCOTUS cases that lawyers enjoy raising far more than they should.  For example, the question here is a classic Matthews v. Eldridge issue, which would require the SCOV to balance between the private interest at stake; the risk of erroneous deprivation and the benefit that additional process would have to protect against it; and the governmental interest in the outcome. 

Unfortunately, the analysis never gets past Baltic Avenue because the Towns failed to identify either a property or liberty interest at stake for them in the PSB’s decision.   Without this basic interest, there is no process due as a matter of constitutional law.

The SCOV goes a step further, however, and notes that the procedure offered by the PSB: an opportunity to brief the issue and submit additional testimony was constitutionally sufficient and that the Board was under no additional obligation to hold a technical hearing on the matter, which would have been costly and not necessarily any more productive.  This is not an entirely unanimous conclusion from the SCOV, as the dissent below details, but it is enough to end the Towns’ due process dreams. 

Third, the SCOV notes that the record supports the contention that the damage was minor and the standard of repairs required were effective. 

Finally, the SCOV address a minor issue of starting dates.  Throughout the hearings, GMP claimed that it needed to start construction by August 1, 2011 to finish in time to be eligible for tax credits.  When August 1st came and went without construction, the Towns sought to cancel the CPG because GMP could no longer establish that the project was economically feasible due to the inevitable lost tax credits.  The SCOV affirms the Board’s denial on the basis that the tax credits were not a condition to the CPG.  Whether GMP did or did not get them, it did not affect the CPG, and if GMP started late, the CPG was still fine.

Two specially assigned trial court judges, Zonay and Eaton, dissent in part from this decision.  The Dissent agrees with the entire decision except for the need for technical hearing on the habitat easement destruction issue.  This is mainly a question of process.  When GMP and ANR presented testimony on the adequacy of the repair work, the Dissent argues that the Board should have called a hearing to give the Towns an opportunity to cross-examine the witnesses.  Where important questions of fact hinge on witnesses, notes the Dissent, due process requires an opportunity to cross-examine and confront the witness. 

The Dissent agrees that this is not a constitutional due process question, but it characterizes it as an abuse of discretion.  Under the Dissent’s reasoning, the Board erred in denying the hearing because it allowed substantive evidence to be accepted without an opportunity to test it through confrontation and cross-examination.  The Dissent would have ordered the issue remanded for such a hearing.

It is probably for the best in the end that the Towns lose on this final point.  By the time this appeal was decided, the towers were up, the blasting was done, and the project, for better or for worse, was in place.

Of course, now the hard part begins.  GMP, the Towns, and the other neighbors must live with each other for the rest of their lives. 

Who knew that Sartre’s No Exit was about renewable energy?