Application of Nebraska Public Power Dist. for a Permit to Construct and Operate Proposed Mandan Nominal 500 KV Transmission Facility, s. 14008

• Citation: 354 N.W.2d 713
• Decision Date: 24 September 1984
• Docket Number: Nos. 14008,s. 14008
• Parties: In the Matter of the Application of NEBRASKA PUBLIC POWER DISTRICT FOR A PERMIT TO CONSTRUCT AND OPERATE the PROPOSED MANDAN NOMINAL 500 KV TRANSMISSION FACILITY. to 14010.
• Court: Supreme Court of South Dakota

Page 713

354 N.W.2d 713

In the Matter of the Application of NEBRASKA PUBLIC POWER DISTRICT FOR A PERMIT TO CONSTRUCT AND OPERATE the PROPOSED MANDAN NOMINAL 500 KV TRANSMISSION FACILITY.

Nos. 14008 to 14010.

Supreme Court of South Dakota.

Argued Sept. 13, 1983.

Decided Aug. 8, 1984.

Rehearing Denied Sept. 24, 1984.

Joe Nadenicek, Asst. Atty. Gen., Pierre, for appellant South Dakota Public Utilities Com'n in No. 14008. Mark V. Meierhenry, Atty. Gen., Pierre, on the brief.

Jeff Masten of Masten, Myrabo, Irons & Kunstle, P.C., Canton, for appellant Safe Energy Alternatives of South Dakota in No. 14009. Benjamin Stead, Des Moines, Iowa, on the brief.

Lloyd C. Richardson, Jr. of Richardson, Groseclose, Kornmann, Wyly, Wise & Klinkel, Tom Watson of Crowell & Moring, Washington, D.C., for appellant Nebraska Public Power Dist. in No. 14010. Charles B. Kornmann of Richardson, Groseclose, Kornmann, Wyly, Wise & Klinkel, Aberdeen Gene N. Lebrun of Lynn, Jackson, Shultz & Lebrun, Rapid City, for amicus curiae Basin Elec. Power Co-op. and Rushmore Elec. Power Co-op., Inc.

and Jeffrey J. Davidson of Crowell & Moring, Washington, D.C., on the brief.

Warren W. May of May, Adam, Gerdes & Thompson, Pierre, for amicus curiae Otter Tail Power Co.

DAVIS, Circuit Judge.

FACTS

On January 14, 1981, Nebraska Public Power District (NPPD) applied for a permit to construct the proposed MANDAN Trans-State Transmission Facility pursuant to SDCL Chapter 49-41B. ¹ Public hearings were held in March 1981. One year later, the South Dakota Public Utilities Commission (PUC) denied NPPD's request for a permit to allow the MANDAN Project access through South Dakota. The trial court reversed the PUC's denial of access, but affirmed a number of terms and conditions the PUC would have imposed on NPPD if the permit had been granted. We affirm the trial court in part and reverse in part.

The MANDAN Project is an international and interstate electric transmission facility extending from an existing Canadian substation in Manitoba to unbuilt substations in North Dakota, South Dakota, and Nebraska. MANDAN would provide seasonal diversity exchange of electricity between summer and winter peaking service areas. Seasonal diversity exchanges allow each utility fuller utilization of its existing generating capacity rather than building new plants and transmission lines to meet peak season demands.

Utilities which serve South Dakota or North Dakota could participate in any quantity up to the total amount of seasonal diversity exchange available to all participants. Because prospective participants need only be interconnected with another utility which is connected to MANDAN, it is unnecessary to build a new transmission facility that directly connects to MANDAN.

Prior to July 1, 1981, a transmission facility applicant was required to establish four standards. NPPD's studies, documents and statements were completed in compliance with the four standards.

Effective July 1, 1981, the South Dakota Legislature amended SDCL 49-41B-22 to include a fifth standard. Even though this requirement became effective more than five months after NPPD filed its application, the PUC required NPPD to establish the fifth standard. The PUC further ordered NPPD to deposit an additional $55,963.50 on December 28, 1981. This amount was in addition to the initial deposit pursuant to SDCL 49-41B-22, which was based on the PUC's estimate of the cost of processing the application but limited to a specified percent of the estimated "construction cost." In assessing the additional deposit, the PUC included finance and interest cost, land acquisition cost, administrative and general overhead cost and engineering cost as "construction cost." The PUC denied NPPD's request for refund one year later.

The PUC entered its order with findings of fact, reserved rulings and conclusions of law on January 14, 1982. Included within the 222 findings of fact were 70 terms and conditions that would be imposed if NPPD's permit was granted. Since only two of those 70 terms and conditions were appealed from, only those will be discussed. First, the PUC directed NPPD to utilize H-frame pole structures instead of the lattice steel towers which NPPD had selected, at an increased cost of $13 million. This condition was justified for three reasons: 1) farming inconvenience, 2) visual impact, and 3) the amount of land taken out of crop production.

Second, the PUC required NPPD to abandon its proposed method of soil restoration, which utilizes subsoiling and intensive surface tillage, and utilize the PUC's system of stripping, stockpiling and replacing The PUC also entered a number of reserved rulings concerning SDCL 49-41B-22(5). The PUC proceeded on the assumption that the statute was constitutional and left the determination of unconstitutionality to the courts. Further, the PUC concluded that Section 5 was a procedural rather than a substantive amendment and could be retroactively applied. As a result, the PUC found that NPPD was not substantially prejudiced by being required to submit evidence on the fifth requirement. Finally, the PUC determined that even if SDCL 49-41B-22(5) was substantive, it could be retroactively applied to NPPD since an intent to apply it retroactively plainly appeared from legislative history and circumstances surrounding its enactment.

topsoil in the construction path, at an increased cost of $4 million. Further, affected landowners would receive written notice of topsoil separation and stockpiling; landowners could, if they desired, require that NPPD utilize other specified topsoil preservation procedures on their land. The PUC topsoil removal and stockpile requirement would become effective automatically if the landowner had not responded within ten days.

The PUC entered 17 conclusions of law. Only four are contested in this appeal. First, the PUC did not grant NPPD's request for a 120 foot general variance from the precise centerline of the route to deal with unforeseen circumstances arising during construction. It reasoned that it did not have the authority and that the grant of a general variance would violate the PUC's route specific requirements, would deny parties an opportunity to assess the proposed route, and would place the PUC in a potential dilemma of granting a permit that was not route specific, which would violate its rules and precedents or violate SDCL 49-41B-36. Second, the PUC declined to preempt or supersede existing county, or municipal rules, regulations, resolutions or ordinances, again reasoning that such action was outside its authority. Third, the PUC determined that NPPD had conditionally met the first four standards of SDCL 49-41B-22; however, the PUC found that NPPD had failed to establish the fifth requirement. Fourth, the PUC denied NPPD's application for the proposed MANDAN project.

NPPD appealed the PUC's decision to the circuit court. The trial court reversed the PUC decision in part and affirmed it in part. Initially, the court reversed the PUC's denial of NPPD's permit; it reasoned that the PUC had unlawfully applied SDCL 49-41B-22(5) retroactively. However, the circuit court affirmed two PUC terms and conditions: the H-frame pole structure; and stripping, stockpiling and replacing all topsoil from the construction area to a depth of eighteen inches. The trial court found that these two conditions were supported by substantial evidence.

The trial court also clarified the PUC's authority and remanded two matters to the PUC. It directed the PUC to grant NPPD's requested general variance if the evidence in the record supported such a finding. Further, the court ordered the PUC to exercise its statutory authority to preempt or supersede local land use regulations if such a finding was warranted by the evidence in the record.

Finally, the court determined that the PUC had erred as a matter of law when it interpreted the term "construction costs" to include finance and interest costs, land acquisition costs, preliminary engineering costs, administrative and general overhead costs and ordered NPPD to deposit an additional $55,963.50. As a result, the trial court directed the PUC to return NPPD's additional deposit, together with interest at the judgment rate.

The PUC, NPPD and Safe Energy Alternatives of South Dakota (SEA) appealed the circuit court decision to this court. Otter Tail Power Company, Basin Electric Power Cooperative, and Rushmore Electric Power Cooperative, Inc. filed briefs as amicus curie. Seven issues are presented in this appeal: the constitutionality of SDCL 49-41B-22(5); the PUC's H-frame pole structure requirement; the PUC's topsoil

preservation procedures; the PUC's preemption of local land use provisions; the PUC's grant of a general variance from the centerline of MANDAN; the PUC's requirement of NPPD's additional deposit; and the PUC's Finding of Fact Number 10.

CONSTITUTIONALITY OF SDCL 49-41B-22(5)

Prior to July 1, 1981, SDCL 49-51B-22 required applicants to establish four conditions. In 1981 the statute was amended to include a fifth requirement, which states:

That the proposed trans-state transmission facility will be consistent with the public convenience and necessity in any area or areas which will receive electrical service, either direct or indirect, from the facility, regardless of the state or states in which such area or areas are located.

SDCL 49-41B-22(5).

A "trans-state transmission facility" is defined as

an electric transmission line ... which originates outside the state of South Dakota, crosses this state and terminates outside the state of South Dakota; and which transmission line and associated facilities delivers electric power and energy of twenty-five percent or less of the design capacity of such line and facilities for use in the state of South Dakota.

SDCL 49-41B-2(11).

Seven weeks after NPPD filed its application, the PUC required it to establish the additional...