In re Petition of Stowe Cady Hill Solar, LLC, 2017-189

Decision Date12 January 2018
Docket NumberNo. 2017-189,2017-189
CourtVermont Supreme Court
PartiesIn re Petition of Stowe Cady Hill Solar, LLC

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made before this opinion goes to press.

On Appeal from Public Utility Commission

James Volz, Chair

William J. Dodge and Joshua D. Leckey of Downs Rachlin Martin PLLC, Burlington, for Appellant.

Stephanie B. Hoffman, Department of Public Service, Montpelier, for Appellee.

PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

¶ 1. CARROLL, J. Stowe Cady Hill Solar (Cady Hill) applied to the Public Utility Commission1 for a certificate of public good to construct a group net-metered solar array in the Town of Stowe. The Commission dismissed Cady Hill's application after finding that the application was incomplete because two adjoining landowners were not given notice that the application had been filed contemporaneous with that filing. We hold that Cady Hill's application meets the completeness requirement as that requirement has been applied in the Commission'sprior decisions and, therefore, the application should not have been dismissed. We reverse and remand to the Commission for further proceedings in accord with this opinion.

¶ 2. We begin with an overview of background information important to this appeal. A net-metered system is an electricity producing system of up to 500 kW powered by a renewable energy source that operates alongside an existing electricity distribution network. 30 V.S.A. § 8002(16). The energy produced by the net-metered system is fed into the existing distribution network and serves to offset the cost of the electricity used by the owner of the net-metered system. A group net-metered system is a system in which multiple customers of a single electricity company combine their electric meters and use the electricity produced by the net-metered system to offset their group electric costs. Id. § 8002(10). Because a net-metered system connects with the existing electric grid, the Commission must grant a net-metered system a certificate of public good (CPG) before it may be constructed. 30 V.S.A. § 231(a) (stating Commission has authority to grant CPG); id. § 248(a)(2) (stating CPG is required before site preparation begins on electricity generating facility except for facilities designed for entirely onsite use).

¶ 3. The Legislature overhauled the statutory framework governing CPG approval for net-metered systems in 2014, with an effective date of January 1, 2017. 2013, No. 99 (Adj. Sess.), § 2. This legislative overhaul required the Commission to amend Public Utility Commission Rule 5.100, which implements the statutory CPG approval process and sets out the specific standards and procedures that apply to issuance of a CPG for a net-metered system. Like the revised statutory framework under which it was promulgated, the new Commission Rule 5.100 became effective on January 1, 2017.

¶ 4. The new rule includes two provisions that are especially relevant in this case. First, under new Rule 5.100, a net-metered system between 150 and 500 kW must be located on a "preferred site" to obtain a CPG. Construction and Operation of Net Metering Systems § 5.103, Code of Vt. Rules 30 000 5100, http://www.lexisnexis.com/hottopics/michie/ [hereinafter Rule5.100]; Rule 5.100 § 5.104. The rule lists the specific kinds of locations that qualify as preferred sites, including brownfields, landfills, and sites previously used for mineral extraction and upon which all required reclamation activities are complete. Rule 5.100 § 5.103. The prior version of Rule 5.100 did not include a comparable siting limitation.

¶ 5. The new rule also provides that the Commission will review "pre-existing" net-metered system applications according to the version of Rule 5.100 in place at the time the application is filed. Rule 5.100 § 5.125(B). To qualify as a pre-existing application, the application must "have a complete CPG application filed with the Commission prior to January 1, 2017." Rule 5.100 § 5.125(A)(1); see also 2013, No. 99 (Adj. Sess.), § 10(f) ("30 V.S.A. § 219a and rules adopted under that section shall govern applications for net metering systems filed prior to January 1, 2017."). Thus, the Commission will review a CPG application for a new net-metered system under the prior version of Rule 5.100 if the application was filed before January 1, 2017, and the application is "complete" under the agency's own definition of that term. In turn, an application filed before the new rule became effective can qualify for a CPG if it meets the criteria of the old rule even if it would not qualify under the new rule.

¶ 6. The agency's definition of completeness is derived from the interplay of two separate Commission rules. The old version of Rule 5.110(C), which would apply to an application filed before the end of 2016, provides as follows:

Upon receiving an application under this subsection, [Commission] staff will review the application for completeness. If the application does not substantially comply with the application requirements set forth herein, the Clerk of the [Commission] will inform the applicant of the deficiencies. Upon submission of all information necessary to address the deficiencies, the Clerk of the [Commission] shall notify the applicant that the filing is complete.

Regulations Pertaining to Construction and Operation of Net Metering Systems § 5.110(C), http://puc.vermont.gov/sites/psbnew/files/doc_library/5100-PUC-nm-adopted-2013_0.pdf [https://perma.cc/N5E3-HLUM] [hereinafter Prior Rule 5.100]. At the same time, Rule 2.208, whichremains unchanged from its 2016 iteration, reserves to the Commission the general authority to reject substantially defective or insufficient filings, stating that "[a] filing is substantially insufficient if, inter alia, it fails to include all material information required by statute or rule." Board Rules: Rules of Practice § 2.208, Code of Vt. Rules 30 000 2000, http://www.lexisnexis.com/hottopics/michie/.

¶ 7. This brings us to the facts of this case. Cady Hill sought a CPG for a 496 kW photovoltaic group net-metered system in the Town of Stowe and filed its application for the same on December 30, 2016—just two days prior to the new rule's effective date. The site of the proposed development is not one of the enumerated sites that qualify as preferred under new Rule 5.100, though the location is not a bar to a CPG under the prior version of the rule. For this reason, Cady Hill sought review under the old version of Rule 5.100 by means of the new rule's provision exempting pre-existing applications from the revisions to the rule.

¶ 8. The pre-2017 version of Rule 5.100 requires a developer to give adjoining landowners two kinds of notice that the developer is seeking a CPG for a net-metered system: advance notice and notice that an application has been filed. The developer must give advance notice to adjoining landowners, as well as municipal and regional entities and state agencies, that the developer intends to file a CPG application 45 days before filing the application. This advance notice must include "sufficient detail about the proposed project(s) to allow the parties receiving the notice to understand the impact of the project(s) on the interests of those parties." Prior Rule 5.100 § 5.110(C). A developer also must give adjoining landowners notice that the application has been filed at the time of the filing. Id.

¶ 9. On November 3, 2016, the project's then-developer, Cady Hill's predecessor, submitted advance notice of its intention to seek a CPG for the project to all of the entities required to receive such notice under the Commission's regulations, including adjoining landowners. All required recipients received this advance notice. Cady Hill's December application includedprefiled testimony, exhibits, site plans, a proposed order and findings of fact, certification that advance notice requirements were met, and a list of the names and addresses of all adjoining landowners. This list of names and addresses was correct and included each adjoining landowner. At the time of the December filing, Cady Hill also gave most adjoining landowners notice that it had filed an application for a CPG. Two adjoining landowners, who together owned a single adjoining property, were not given the required notice that Cady Hill had filed its application, though they were given the original notice of intent in November by Cady Hill's predecessor and were included on the list of adjoining landowners submitted with Cady Hill's December application.2 All other necessary entities received the advance notice and notice of filing that the rule requires.

¶ 10. On January 4, 2017, one of the landowners who did not receive notice of the filing contacted the Commission to inquire whether Cady Hill's CPG application had been filed. The landowner also asked for a copy of the application. Cady Hill confirmed that the landowner had not received notice and, the same day, sent digital and hard copies of the notice to the landowners omitted at the time of the December filing. Cady Hill also sent a digital and hard copy of a letter summarizing the notice omission and corrective measures to the Commission. This letter asked the Commission to lengthen the comment period for these two specific landowners by four days to make up for the delayed service of notice.

¶ 11. On January 19, 2017, the Department of Public Service submitted comments on Cady Hill's application. The Department noted that Cady Hill had filed documents after January 1 acknowledging omissions in its application under the notice...

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    ...up to 500 kW powered by a renewable energy source that operates alongside an existing electricity distribution network." In re Stowe Cady Hill Solar, LLC, 2018 VT 3, ¶ 2, 206 Vt. 430, 182 A.3d 53. "A developer of a new electric-generation facility in Vermont may not begin construction until......
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    ...up to 500 kW powered by a renewable energy source that operates alongside an existing electricity distribution network." In re Stowe Cady Hill Solar, LLC, 2018 VT 3, ¶ 2, 206 Vt. 430, 182 A.3d 53. "A developer of a new electric-generation facility in Vermont may not begin construction until......
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    ...is interpreted in a fashion inconsistent with the authorizing statute or if the regulation is "inconsistently applied." In re Stowe Cady Hill Solar, LLC, 2018 VT 3, ¶ 21, 206 Vt. 430, 182 A.3d 53. Here, there is no evidence that ANR applied the policy inconsistently.11 The Environmental Div......
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    ...is interpreted in a fashion inconsistent with the authorizing statute or if the regulation is "inconsistently applied." In re Stowe Cady Hill Solar, LLC, 2018 VT 3, ¶ 21, 206 Vt. 430, 182 A.3d 53. Here, there is no evidence that ANR applied the policy inconsistently.11 The Environmental Div......
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