In re Portland St. Solar LLC

• Citation: 264 A.3d 872
• Decision Date: 03 September 2021
• Docket Number: No. 21-024,21-024
• Parties: IN RE Petition of PORTLAND STREET SOLAR LLC
• Court: United States State Supreme Court of Vermont

264 A.3d 872

IN RE Petition of PORTLAND STREET SOLAR LLC

No. 21-024

Supreme Court of Vermont.

May Term, 2021

September 3, 2021

Kimberly K. Hayden of Paul Frank + Collins P.C., Burlington, for Appellant.

Eric B. Guzman, Special Counsel, Montpelier, for Appellee Vermont Department of Public Service.

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

ROBINSON, J.

¶ 1. Portland Street Solar LLC appeals an order of the Public Utility Commission denying Portland Street's petition for a certificate of public good (CPG) under 30 V.S.A. §§ 248 and 8010 to install and operate a 500-kW solar group net-metering system adjacent to a previously permitted solar array owned by Golden Solar, LLC.¹ Interpreting the definition of "plant" set forth in 30 V.S.A. § 8002(18), the Commission determined that the proposed Portland Street project would be part of a single plant along with the already-approved adjacent Golden Solar project and thus would exceed the 500-kW energy-generating-capacity limit applicable in the net-metering program. On appeal, Portland Street argues that the Commission's decision is inconsistent with this Court's controlling precedent, as well as prior Commission decisions involving similar cases, and that the Commission exceeded its statutory authority by expansively construing the component parts of § 8002(18) that define the characteristics of a single plant.

¶ 2. The central question before us is whether the Commission committed reversible error in concluding, based on its interpretation of the definition of "plant" set forth in § 8002(18), that the Portland Street facility is, along with the previously approved Golden Solar facility at the same location, part of a single plant and thus ineligible to benefit from a net-metering program limited to facilities with a 500kW maximum energy-generating capacity. Applying the appropriate deferential standard of review, we conclude that the Commission's self-described expanded and refined interpretation of what constitutes a single plant under § 8002(18) is not arbitrary, unreasonable, or discriminatory and does not amount to compelling error that would require this Court to intervene in matters the Legislature has delegated to the Commission's expertise. Accordingly, we affirm the Commission's decision denying Portland Street's petition for a CPG to install and operate its proposed facility under the net-metering program.

I. Facts and Procedural History

¶ 3. The following facts are drawn from the Commission's decision, which adopted the hearing officer's findings of fact. The Golden Solar and proposed Portland Street solar projects are situated on an 82.2-acre parcel of land along Portland Street in St. Johnsbury. The two facilities are owned by separate limited liability companies (LLCs). Norwich Technologies, Inc., also known as Norwich Solar, owns both LLCs, as well as the property on which the projects are sited. At different times, principals of the Golden Solar and Portland Street projects petitioned for CPGs under distinct programs aimed at promoting the development of renewable energy by benefitting small-to-moderately-sized renewable energy facilities.

¶ 4. Golden Solar is a solar-powered electric system with a standard-offer contract to deliver up to 2.2 MW of electricity.² In December 2017, Green Mountain Power (GMP) issued a Feasibility Study to Sunny Acres, the original holder of the standard-offer contract, for the Golden Solar facility. GMP required Sunny Acres to upgrade the existing distribution line along Portland Street with 4500 feet of new conductor to connect to the Golden Solar facility. In December 2018, Golden Solar filed a petition for a CPG to install and operate its facility, which would occupy 25.82 acres of the 82.2-acre parcel. In August 2019, the Commission granted a CPG to Golden Solar for its proposed facility, and in September 2019, the Commission extended to December 2020 Golden Solar's standard-offer contract deadline for commissioning the facility.

¶ 5. On June 27, 2019, seven weeks before the Commission approved a CPG for the Golden Solar facility, Portland Street filed its petition to install and operate a 500-kW group net-metering solar system on approximately seven acres of the same 82.2-acre St. Johnsbury parcel on which Golden Solar was to operate.³

¶ 6. After extensive proceedings focused on the question, in October 2020, the hearing officer filed a proposed decision recommending that the Commission deny Portland Street's CPG petition to operate a net-metering system because it would be part of a single plant along with the adjacent Golden Solar facility.⁴ On December 23, 2020, the Commission adopted the hearing officer's findings of fact and legal reasoning and denied Portland Street's petition, concluding that the Portland Street facility would be part of a single plant along with the adjacent, approved Golden Solar facility.

¶ 7. The Commission began its discussion by acknowledging and explaining its expanded and refined analysis of the single-plant issue. The Commission pointed out that the Legislature enacted the statutory definition of "plant," primarily with wind facilities in mind, to encourage the dispersed siting of energy-generating projects applying for financial incentives available only to smaller facilities. The Commission recognized that the recent proliferation of 500-kW net-metering projects and the advent of preferred siting constraints and grid concerns had driven uneven development, leading to a saturation of solar facilities in particular areas on particular types of sites. The Commission stated that it was faced with the task of applying the statutory single-plant test in the context of this shifting landscape and accompanying policy concerns.

¶ 8. The Commission observed that large projects otherwise too big to benefit from the standard-offer or net-metering programs were being proposed as independent smaller facilities to take advantage of those programs’ economic incentives intended for smaller projects. In the Commission's view, such proposals, if successful, would conflict with the purpose of the definition of "plant" in § 8002(18) —to ensure that larger projects do not take advantage of limited financial incentives intended for small and moderately sized projects. The Commission acknowledged that in this context, its analysis of what constitutes a single plant was evolving in order to adhere to the purpose underlying the statutory definition of "plant."

¶ 9. The Commission explained that its analysis under § 8002(18) consisted of two parts. First, it asked whether the facilities are part of the same "project," considering "common ownership, contiguity in time of construction, and physical proximity." Second, it asked whether the facilities "share common equipment and infrastructure." With respect to the argument that if the proposed facility is "an independent technical facility," it is not part of the same plant, the Commission explained, "a finding that a plant is ‘an independent technical facility’ is not a separate prong to the analysis; it is the conclusion."

¶ 10. As to the first factor within the first prong, the Commission rejected the "legal fiction" that facilities owned by two distinct LLCs do not have common ownership, and instead considered the "actors, operations, and contractual arrangements for each facility" in assessing common ownership. It concluded that the two facilities here were subject to common ownership. In assessing whether facilities shared contiguity in time of construction, the Commission construed "construction" to incorporate all steps in the process, from project planning and site reconnaissance and preparation to physical plant construction and interconnection. In this case, the Commission concluded that the facilities resulted from coordinated, simultaneous planning, and thus concluded that the "contiguity of construction" factor favored a determination that the facilities were part of a single project. Finally, in assessing physical proximity, the Commission held that the number of feet between the facilities was not dispositive, and looked to a number of additional considerations such as intervening buffers and topography. Considering these factors, the Commission concluded that the facilities would be viewed as a single plant from the perspective of the average person and concluded that the physical proximity of the facilities supports the conclusion that they are the same project.

¶ 11. As to the second prong, the Commission considered whether the facilities shared common equipment and infrastructure. The Commission rejected the argument that facilities were legally distinct unless they shared both common equipment and common infrastructure and concluded that it could consider infrastructure beyond where the facility first interconnects to the grid in evaluating whether the facilities use common infrastructure. It stated that its conclusion did not represent a departure from precedent, but also asserted that any evolution in its analysis was allowable given its authority as an administrative agency, and further that its analysis was supported by the legislative intent and policies. The Commission accordingly denied the CPG, and Portland Street appealed.

II. Analysis

¶ 12. Our standard of review on appeal is deferential. "When the [Commission] evaluates a CPG petition under 30 V.S.A. § 248, it is engaged in a legislative, policy-making process." In re Derby GLC Solar, LLC, 2019 VT 77, ¶ 18, 211 Vt. 144, 221 A.3d 777 (quotation omitted). "Out of respect for the expertise and informed judgment of agencies, and in recognition of this Court's proper role in the separation of powers, we accord agency decisions substantial deference." In re Conservation Law Found., 2018 VT 42, ¶ 15, 207 Vt. 309, 188 A.3d 667. Moreover, we employ a deferential standard of review to an agency's interpretation of statutes within its area of expertise. In re Acorn Energy Solar...