Renewable Energy Law Alert: Washington Supreme Court Affirms State Siting Council's Authority to Permit Alternative Energy Facilities

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The "welcome" sign to continued alternative energy development in the State of Washington is out. The Washington State Supreme Court yesterday affirmed the primacy of the Energy Facility Site Evaluation Council's (EFSEC) authority to process applications for site certification of alternative energy facilities that choose to "opt in" to EFSEC, and upheld Governor Chris Gregoire's approval of the Kittitas Valley Wind Power Project (KVWPP). As a result of the decision, KVWPP will be built on the windy slopes of the Cascade Mountains in central Washington. Once complete, the 65-turbine, 130-MW project will generate clean renewable power for over 30,000 homes each year. The project developer, Horizon Wind Energy, was represented at the local, adjudicative and appellate levels of the KVWPP proceedings by Stoel Rives attorneys Timothy McMahan and Erin Anderson, with the support of a team of Stoel attorneys over the six years that culminated in this precedent-setting wind energy decision.

In a unanimous, 59-page opinion authored by Justice Susan Owens, the court said: "The stakes in this case are high, pitting the jurisdiction of a multidepartment state council against county jurisdiction over siting energy facilities. The winner gets control over the siting of energy facilities."

In upholding EFSEC's preemption and the Governor's decision to approve KVWPP, the court clarified several important energy siting issues. It recognized the broad implications of its interpretation of the state's Energy Facility Site Locations Act (EFSLA). Moreover, the court's rulings on state energy facility siting preemption and mitigation of visual impacts will likely have precedential value for similar disputes in other states.

1.     Process for Certifying Energy Facility Siting Appeals to Supreme Court Upheld

The EFSLA certification review process is unique among Washington statutes. It directs an appeal to the Superior Court, which may certify the case to the Supreme Court if it makes the requisite findings. However, the Superior Court may conduct fact-finding to ascertain whether the record is complete. Arguments were made on appeal that (a) the Superior Court was obligated to conduct evidentiary hearings upon an allegation of procedural impropriety below and (b) the EFSLA appeal framework was an unconstitutional attempt to confer original jurisdiction on the Supreme Court. Both contentions were rejected.

The Supreme Court iterated that just as Superior Courts assert appellate jurisdiction when they review administrative decisions, so the certification of a petition for review of an administrative decision to the Supreme Court appropriately invokes its appellate jurisdiction. Moreover, the Supreme Court clarified that it will interpret the use of the word "shall" in RCW 80.50.140, which mandates the Supreme Court's review of a certified case, as permissive, holding that "we may determine whether or not to accept certification." Residents Opposed to Kittitas Turbines v. Energy Facility Site Evaluation Council, No. 81332-9, slip op. at 26 (Wash. Nov. 20, 2008).

The Supreme Court also found that the Superior Court judge acted appropriately in reviewing the record for completeness prior to certification. Appellants were allowed to conduct depositions and submit additional declarations to support their allegations of procedural irregularity below. Upon reviewing that evidence, the Superior Court found that no material issue of disputed fact had been brought to light that necessitated further hearings, yet added the additionally developed record to the materials transmitted to the Supreme Court. In finding that the Superior Court acted appropriately in limiting the quantum of testimony it would receive, the Supreme Court held that "RCW 80.50.140(1) did not require the superior court to conduct an evidentiary hearing or to allow Petitioners' [sic] to conduct in-court interrogation of witnesses." Id. at 29. The question of whether the conduct demonstrated by the additional evidence constituted a violation of the laws was a purely legal question properly resolved by the Supreme Court.

2.     Scope of Judicial Review Includes Agency Proceedings

EFSLA provides that judicial review be conducted on the "final decision" made on a site certification application, pursuant to procedures under the Administrative Procedure Act (APA). RCW 80.50.140(1). In Washington, the final decision on any application made to EFSEC rests solely with the Governor. RCW 80.50.100(2). However, EFSLA contains no provisions to guide the Governor's decision-making process, and requires no findings or conclusions to support her decision. Consequently, review of the "final decision" under EFSLA leaves little, if anything, to review. The Washington Supreme Court looked to the APA for guidance, and concluded that for purposes of reviewing final siting decisions under EFSLA, the approval of a site certification was most analogous to the definition of a "license" found at RCW 34.05.010(9(a). Under EFSLA, it is EFSEC that conducts the adjudicative proceeding to review the "license." Consequently, EFSEC's rules and actions are subject to review under APA provisions found at RCW 14.05.570(3)(a)-(f), (h)-(i).

3.     EFSLA Governs the Siting of Energy Facilities Using Exclusively Wind Power

In 2001, the Washington Legislature added "alternative energy resources" to energy facilities that may seek site certification under EFSLA regardless of the project's generation capacity. RCW 80.50.060(2). The definition of "alternative energy resources" includes wind, solar energy, geothermal energy, landfill gas, wave and tidal action, and biomass energy from solid organic fuels derived from wood, forest or field residues, or dedicated energy crops. See RCW 80.50.020(18). Appellants looked to the definition of "energy facility" under EFSLA and concluded that an alternative energy resource must meet that definition. At RCW 80.50.020(15)(a)-(e), energy facilities are defined by output generated and the source of power as being either thermal, natural gas or petroleum. This interpretation would preclude a wind energy facility from ever qualifying as an energy facility available for siting under EFSLA. Moreover, because the definition of alternative energy facilities did not establish output standards as called for by the definition of "energy facility," it was argued that wind must be beyond the scope of EFSEC's jurisdiction. The Supreme Court concluded that these interpretations would render the statutory framework meaningless, and instead upheld the Legislature's clear intent to include wind as an alternative energy resource subject to siting under EFSLA.

4.     The Growth Management Act Does Not Supersede the State's Siting Authority

Kittitas County forcefully argued that its local land use plans and regulations, including the multistep County ordinance under which KVWPP was reviewed and denied by the BOCC, was the sole and determinative law under which the project could be permitted. EFSLA dates back to the early 1970s, and is limited strictly to the topic of energy siting. When creating the siting legislation, the State appropriated the siting function to itself by "preempt[ing] the regulation and certification of the location, construction, and operational conditions of certification of the energy facilities included under RCW 80.50.060 as now or hereafter amended." RCW 80.50.110(2). In the early 1990s, the Legislature overhauled the statewide planning laws with passage of the Growth Management Act (GMA) at RCW 36.70A, essentially obligating jurisdictions such as Kittitas County to comprehensively plan from the bottom, or local, level upward. The GMA did not expressly repeal EFSEC's preemption of the field of energy facility siting. CTED , the agency charged with administering the GMA, itself concluded that its regulations "should accommodate situations where the state has explicitly preempted all local land use regulations, as for example, in the siting of major energy facilities under RCW 80.50.110." WAC 365-195-745(1). The Supreme Court recognized the long-standing legal principle that laws specific to a topic (EFSLA) govern over conflicting, but more general, laws on the same topic (GMA), and concluded that CTED's own ability to read the GMA in conformity with EFSLA "confirms our interpretation that the GMA does not supersede or repeal EFSEC's preemption powers under EFSLA." Id. at 41.

5.     The Final Environmental Impact Statement Adequately Considered Mitigation of KVWPP's Visual Impact

Appellants alleged that the Final Environmental Impact Statement (FEIS) was deficient because it did not analyze specific turbine setback distances as a mitigation measure for the visual impact of the turbines. However, the FEIS acknowledged the common fact that greater distances mitigate the visual impact of turbines, and performed voluminous analysis on the visual significance of turbines from numerous viewpoints. Additional testimony during the EFSEC adjudicative proceedings included expert witness testimony about a formulaic approach to determining the point at which an object is no longer dominant in a viewscape. Appellants contended that the FEIS was inadequate, and EFSEC's actions in reliance thereon erroneous, because the formulaic approach they required be used for setback calculations was not specifically discussed in the FEIS. In a ruling that provides significant clarity to energy facility siting and other land development activities, the Supreme Court held that "FEIS's are critical evaluative tools for decision makers, but nothing in SEPA requires decision makers to rely solely on the information contained in the FEIS's when making decisions. The FEIS here was adequate, and EFSEC used it properly." Id. at 42 (emphasis added) .

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