Appalachian Voices v. State Corp. Com'n

• Decision Date: 17 April 2009
• Docket Number: Record No. 081433.
• Citation: 277 Va. 509,675 S.E.2d 458
• Parties: APPALACHIAN VOICES, et al. v. STATE CORPORATION COMMISSION, et al.
• Court: Virginia Supreme Court

675 S.E.2d 458

277 Va. 509

APPALACHIAN VOICES, et al. v. STATE CORPORATION COMMISSION, et al.

Record No. 081433.

Supreme Court of Virginia.

April 17, 2009.

Caleb Jaffe (Southern Environmental Law Center, on briefs), for appellants.

John F. Dudley, Counsel to the Commission (William H. Chambliss, General Counsel; Glenn P. Richardson, Senior Counsel, on brief), for appellee State Corporation Commission.

E. Duncan Getchell, Jr. (Edward L. Flippen; Joseph K. Reid III; Erin M. Sine; James C. Roberts; Donald G. Owens; Thomas C. Walker, Jr.; Pamela J. Walker; Karen L. Bell; McGuireWoods; Troutman Sanders, on brief), Richmond, for appellee Virginia Electric and Power Company.

Present: HASSELL, C.J., KOONTZ, LEMONS, GOODWYN, and MILLETTE, JJ., and CARRICO and LACY, S.JJ.

OPINION BY Justice DONALD W. LEMONS.

In this appeal, we consider whether certain provisions of Code § 56-585.1(A)(6) violate the Commerce Clause of the United States Constitution. For the reasons stated below, we will affirm the order of the State Corporation Commission holding that there is no such violation.

I. Facts and Proceedings Below

On July 13, 2007, Virginia Electric and Power Company ("Dominion") applied to the State Corporation Commission ("Commission") for "approval, certification, and rate adjustment under § 56-585.1, § 56-580(D), and § 56-46.1 of the Code of Virginia with regard to a carbon capture compatible, clean-coal powered electric generation facility to be located in the coalfield region of the Commonwealth in Wise County, Virginia." In its application, Dominion asserts that the proposed coal plant will cost approximately "$1.62 billion including the interconnection facilities necessary to interconnect the Plant." Dominion also contends in its application that

[t]he coal plant will be a "carbon capture compatible, clean-powered" 585 megawatt (nominal) coal-fueled generating plant. The Plant's design will incorporate clean-coal powered mechanisms from its in-service date in 2012. It will use circulating fluidized bed ("CFB") technology, which is recognized by the Department of Energy as a Clean-Coal Technology. The Plant will also be built so that it is compatible with carbon capture technology when such technology becomes commercially available, and the site in Wise County has been designed to accommodate future installation of such equipment.

After receiving Dominion's application, the Commission gave notice of a public hearing on the application for January 8, 2008. Thereafter, the Virginia Committee for Fair Utility Rates, the Southern Environmental Law Center, the Sierra Club, Chesapeake Climate Action Network, Southern Appalachian Mountain Stewards, Appalachian Voices, the Attorney General's Division of Consumer Counsel, Competitive Bidding Group, Apartment and Office Building Association of Metropolitan Washington, and MeadWestvaco Corporation all gave notice of participation as respondents.

Dominion then filed a motion to continue the hearing from January 8, 2008 until the week of January 21, 2008 and suggested either February 5, 6, or 7, 2008 for evidentiary hearing dates. By an order, the Commission set a hearing on January 8, 2008 "for the sole purpose of receiving testimony of public witnesses" and then reconvene on February 5, 2008 "to receive evidence on the application of [Dominion]."

During the January 8, 2008 hearing, the Commission heard testimony from over 100 public witnesses. On February 5, 2008 through February 8, 2008 the Commission reconvened to hear evidence on Dominion's application. The Commission, after hearing testimony and evidence, requested post-hearing briefs. The Competitive Bidding Group, Staff of the State Corporation Commission, Southern Environmental Law Center (on behalf of itself, the Sierra Club, Chesapeake Climate Action Network, Southern Appalachian Mountain Stewards, and Appalachian Voices), Dominion, the Office of the Attorney General Division of Consumer Counsel, and the Virginia Committee for Fair Utility Rates all filed post-hearing briefs in support of their positions.

Upon consideration of the evidence including public witnesses and post-hearing briefs, the Commission approved Dominion's application, subject to some requirements not germane to the appeal. Significantly for this appeal, the Commission rejected the argument that Dominion's application was premised upon statutory provisions that violated the Commerce Clause of the United States Constitution. The Commission held that because Code § 56-585.1(A)(6) "does not require that the Coal Plant use only Virginia coal, and the Commission's approval of the application herein is not subject to such an exclusive requirement," the provision of Code § 56-585.1(A)(6) passes constitutional scrutiny. Additionally, the Commission held that because Code § 56-585.1(A)(6) establishes that a coal-fueled generating facility that utilizes Virginia coal and is located in the Commonwealth "is in the public interest" the Commission was not required independently to analyze whether the proposed coal plant was in the public interest.

Appalachian Voices, Chesapeake Climate Action Network, Sierra Club, and Southern Appalachian Mountain Stewards ("Appalachian Voices") appeal as matter of right, pursuant to Code § 12.1-39, upon three assignments of error:

1. The Commission Erred As A Matter of Law In Rejecting Petitioners' Claim That Va.Code § 56-585.1(A)(6) Is Per Se Unconstitutional; The Statute Violates The Commerce Clause of The United States Constitution, U.S. CONST. Art. I, § 8, cl. 3.

2. The Commission Erred As A Matter of Law In Considering The Application of Virginia Electric and Power Company, Which Was Prematurely Filed Before The Expiration of Capped Rates; The Application Was Not Properly Before The Commission And Should Have Been Dismissed.

3. The Commission Erred As A Matter of Law In Relying On Va.Code § 56-585.1(A)(6) To Rule That The Proposed Coal-Fired Electricity Generating Station Would Be In The Public Interest And Refusing "To Make a Separate Public Interest Determination."

II. Standing Challenge

Initially, we observe that Dominion challenges the standing of Appalachian Voices to oppose the application and to maintain this appeal. However, Dominion did not raise the issue of standing during the proceeding before the Commission. In Martin v. Ziherl, 269 Va. 35, 607 S.E.2d 367 (2005), we held that "[a] basic principle of appellate review is that, with few exceptions not relevant here, arguments made for the first time on appeal will not be considered." Id. at 39, 607 S.E.2d at 368. Accordingly, we need not consider Dominion's challenge to Appalachian Voices' standing for the first time on appeal.

Furthermore, "[w]hile we will not entertain a standing challenge made for the first time on appeal, the Court will consider, sua sponte, whether a decision would be an advisory opinion because the Court does not have the power to render a judgment that is only advisory." Id. at 40, 607 S.E.2d at 369. The record of this case clearly presents a real controversy, the resolution of which does not constitute an advisory opinion.

III. Constitutional Challenge

A. Standard of Review

When an appeal is from the Commission, we have stated:

It is firmly established that a decision by the Commission

comes to this court with a presumption of correctness. The Constitution of Virginia and statutes enacted by the General Assembly thereunder give the Commission broad, general and extensive powers in the control and regulation of a public service corporation. The Commission is charged with the responsibility of finding the facts and making a judgment. This court is neither at liberty to substitute its judgment in matters within the province of the Commission nor to overrule the Commission's finding of fact unless we can say its determination is contrary to the evidence or without evidence to support it.

Campbell County v. Appalachian Pow. Co., 216 Va. 93, 105, 215 S.E.2d 918, 927 (1975). Additionally, the Commission's decision "is entitled to the respect due judgments of a tribunal informed by experience," and we will not disturb the Commission's analysis when it is "`based upon the application of correct principles of law.'" Lawyers Title Insurance Corp. v. Norwest Corp., 254 Va. 388, 390-91, 493 S.E.2d 114, 115 (1997) (quoting Swiss Re Life Co. Am. v. Gross, 253 Va. 139, 144, 479 S.E.2d 857, 860 (1997)). However, the Commission's decision, if based upon a mistake of law, will be reversed. First Virginia Bank v. Commonwealth, 213 Va. 349, 351, 193 S.E.2d 4, 5 (1972).

Northern Virginia Elec. Coop. v. Virginia Elec. & Power Co., 265 Va. 363, 368, 576 S.E.2d 741, 743-44 (2003). We have "frequently said that the practical construction given to a statute by public officials charged with its enforcement is entitled to great weight by the courts and in doubtful cases will be regarded as decisive." Commonwealth v. Appalachian Elec. Power Co., 193 Va. 37, 45, 68 S.E.2d 122, 127 (1951). However, "constitutional arguments are questions of law that we review de novo." Shivaee v. Commonwealth, 270 Va. 112, 119, 613 S.E.2d 570, 574 (2005).

B. Constitutional Analysis

Appalachian Voices asserts a challenge to Code § 56-585.1(A)(6) based upon the Commerce Clause, which declares that "The Congress shall have power ... To regulate Commerce with foreign nations, and among the several states." U.S. CONST. art. I, § 8, cl. 3. The United States Supreme Court has expressed a corollary rule known as the "dormant" or "negative" Commerce Clause, providing implicit restraints upon the states. "The bounds of these restraints appear nowhere in the words of the Commerce Clause, but have emerged gradually in the decisions of this Court giving effect to its basic purpose." City of Philadelphia v. New Jersey, 437 U.S. 617, 623, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978). The doctrine of the dormant Commerce Clause is intended to prevent the various states from...