Bd. of Cnty. Commissioners of Wash. Cnty. v. Perennial Solar, LLC

464 Md. 610

212 A.3d 868

BOARD OF COUNTY COMMISSIONERS OF WASHINGTON COUNTY, Maryland

v.PERENNIAL SOLAR, LLC

No. 66, Sept. Term, 2018

Court of Appeals of Maryland.

July 15, 2019

Argued by Kirk C. Downey, County Atty. (Kendall A. McPeak, Deputy County Atty., Office of the Washington County Atty., Hagerstown, MD), on brief and Christopher F. Drummond (Centreville, MD), on brief, for Petitioner.

Argued by Andrew F. Wilkinson (Wilkinson Law, Hagerstown, MD), on brief, for Respondent.

Christopher F. Drummond, Esq., Centreville, MD, for Amicus Curiae County Commissioners of Queen Anne’s County and County Commissioners of Kent County.

H. Robert Erwin, Jr., Esq., Gen. Counsel, Colin P. Glynn, Esq., Asst. Gen. Counsel, Maryland Public Service Commission, Baltimore, MD, for Amicus Curiae Maryland Public Service Commission.

Margaret M. Witherup, Esq., David W. Beugelmans, Esq., Gordon Feinblatt LLC, Baltimore, MD, for Amicus Curiae Utility Scale Solar Energy Coalition of Maryland.

Argued before: Barbera, C.J.,^* Greene, McDonald, Watts, Hotten, Getty, Booth, JJ.

Booth, J.

"Here comes the sun, and I say, It's all right."

-The Beatles, "Here Comes the Sun"

This case involves the intersection of the State's efforts to promote solar electric generation as part of its renewable energy policies, and local governments' interest in ensuring compliance with local planning and zoning prerogatives. In this matter, we are asked to determine whether state law preempts local zoning authority with respect to solar energy generating systems that require a Certificate of Public Convenience and Necessity ("CPCN") issued by the Maryland Public Service Commission.

This case began with an application by Perennial Solar, LLC ("Perennial") to the Washington County Board of Zoning Appeals ("Board") for a special exception and variance to construct a Solar Energy Generating System ("SEGS") adjacent to the rural village of Cearfoss in Washington County, Maryland. After the Board granted the variance and special exception, a group of aggrieved landowners sought judicial review of the Board's decision in the Circuit Court for Washington County. The Board of County Commissioners of Washington County, Maryland ("Washington County" or "the County") intervened in the case.

While the petition for judicial review was pending, Perennial filed a motion for pre-appeal determination challenging the subject matter jurisdiction of the Circuit Court for Washington County on the ground of state law preemption by implication. Prior to considering the merits of the Board's decision, a hearing was held on Perennial's motion. The circuit court granted the motion and determined that Maryland Code, § 7-207 of the Public Utilities Article ("PU") preempts the Washington County Zoning Ordinance and that the Public Service Commission ("PSC") has exclusive jurisdiction to approve the type of SEGS proposed by Perennial. Washington County appealed the case to the Court of Special Appeals. In a reported opinion, the intermediate appellate court affirmed the judgment of the circuit court. Bd. of Cty. Comm'rs of Washington Cty., et al. v. Perennial Solar, LLC , 239 Md. App. 380, 196 A.3d 933 (2018).

Washington County petitioned this Court for a writ of certiorari. We granted certiorari to consider the following question:¹

Does state law preempt local zoning authority with respect to solar energy generating systems that require a Certificate of Public Convenience and Necessity issued by the Maryland Public Service Commission?

For the reasons set forth herein, we answer in the affirmative and affirm the judgment of the Court of Special Appeals.

I. FACTUAL AND PROCEDURAL BACKGROUND

Perennial filed an application in September of 2015 with the Board for a special exception and variance² to construct a SEGS³ on two contiguous farms totaling 86 acres. The farms are adjacent to Cearfoss, a community designated as a Rural Village⁴ in the Washington County Comprehensive Plan. The proposed site is located in the Agricultural-Rural ("AR") zoning district⁵ in the Washington County Zoning Ordinance ("Zoning Ordinance"). The Zoning Ordinance permits SEGS as a land use in the AR zoning district by special exception. Perennial's SEGS is designed to produce ten megawatts of electricity, all of which is to be sold and transferred offsite to a wholesale electricity market. The electricity generated by the SEGS would be enough to power 2,100 homes.

The Board held a public hearing on Perennial's application in October of 2015. Testimony was given by witnesses in favor of and in opposition to Perennial's application.⁶ The Board also accepted written evidence from both sides relating to the application.

After considering the matter for two weeks, the Board met, deliberated, and granted the request for a special exception and a variance.⁷ The Board issued a written opinion in November of 2015 in which it determined, among other things, that the intended use conforms to the Washington County Comprehensive Plan and is compatible with the existing neighborhood. The Board found that the site is not located within a Priority Preservation Area, a Rural Legacy Area, or within the Antietam Overlay Zone, which are all areas where SEGS are prohibited under the Washington County Zoning Ordinance. After describing the evidence and testimony, the Board concluded that there was no probative evidence showing that the SEGS would have any greater adverse effects above and beyond those inherently associated with the special exception use irrespective of its location within the zone. The Board granted the variance from the minimum setback to allow the SEGS to be built over the common property line separating the two contiguous parcels, finding that strict compliance with the setback requirements would cause practical difficulty for the project and that a variance to a zero-foot setback would not cause any harm to public safety or welfare.

A group of aggrieved landowners sought judicial review of the Board's decision in the Circuit Court for Washington County. Washington County intervened in the case. While the petition for judicial review was pending, Perennial filed a motion for pre-appeal determination challenging the circuit court's subject matter jurisdiction on the ground of state law preemption by implication. Perennial argued that under PU § 7-207, the PSC has exclusive jurisdiction for approval of the proposed SEGS, including site location. Washington County and the aggrieved landowners opposed the motion, arguing that the legislative intent reveals that local regulation of SEGS, and particularly, their location, is not preempted by state law.

After a hearing, the circuit court granted Perennial's motion, holding that local zoning authority is preempted by PU § 7-207. The circuit court dismissed the petition for judicial review and remanded the matter to the Board with instructions to vacate its opinion and the grant of a special exception and variance. Washington County and the aggrieved landowners appealed the decision of the circuit court to the Court of Special Appeals. In a reported opinion, the intermediate appellate court applied Maryland case law outlining the applicable factors when considering the doctrine of implied preemption. Perennial Solar , 239 Md. App. 380, 196 A.3d 933. The Court of Special Appeals noted that "preemption by implication occurs when a local law ‘deals with an area in which the [General Assembly] has acted with such force that an intent by the State to occupy the entire field must be implied.’ " Id. at 386, 196 A.3d 933 (quoting Talbot Cty. v. Skipper , 329 Md. 481, 488, 620 A.2d 880 (1993) ). The Court stated that when undertaking a preemption analysis, its "inquiry is focused on ‘whether the General Assembly has manifested a purpose to occupy exclusively a particular field.’ " Id. (quoting East Star, LLC v. Cty. Comm'rs of Queen Anne's Cty. , 203 Md. App. 477, 485, 38 A.3d 524 (2012) ).

After reviewing the comprehensive statutory scheme associated with the PSC's review and approval process for generating stations, including the broad authority conferred by the General Assembly upon the PSC, the Court of Special Appeals held as follows:

Based on the comprehensiveness of [PU] § 7-207, local zoning regulations and comprehensive plans are impliedly preempted by state law for SEGSs requiring a CPCN. The statute grants the PSC broad authority to determine whether and where the SEGS may be constructed and operated. It is even more evident that the Legislature intended to have the state govern SEGS approval by requiring local government input into the state's final decision.

Perennial Solar , 239 Md. App. at 390, 196 A.3d 933. The intermediate appellate court noted that this Court reached the same conclusion in Howard County v. Potomac Electric Power Co ., 319 Md. 511, 573 A.2d 821 (1990). The Court of Special Appeals concluded its analysis in Perennial Solar by stating that "following the logic of the Court of Appeals in Howard County ... and the legislative intent discussed supra , we hold that the PSC preempts, by implication, local zoning regulation and thus affirm the circuit court."⁸

Perennial Solar , 239 Md. App. at 392, 196 A.3d 933. For the reasons set forth herein, we affirm the judgment of the Court of Special Appeals.

II. STANDARD OF REVIEW

This case involves a purely legal issue—whether PU § 7-207, which grants the PSC general regulatory powers over generating stations, including SEGS, preempts local zoning authority with respect to the location and construction of SEGS. As this determination involves a question of law, our standard of review is de novo . See Koste v. Town of Oxford , 431 Md. 14, 25, 63 A.3d 582 (2013) ("When an issue involves an interpretation and application of a Maryland constitutional, statutory or case law, an appellate court must determine whether the trial court's conclusions are legally correct under a de novo standard of review.") (internal citations omitted); ...