Frederick Cnty. v. Legore Bridge Solar Ctr.

FREDERICK COUNTY, MARYLAND v. LEGORE BRIDGE SOLAR CENTER, LLC, et al.

No. 1249

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

November 24, 2020

Circuit Court for Baltimore City

Case No. 24-C-18-002189

UNREPORTED

Wells, Gould, Eyler, James R. (Senior Judge, Specially Assigned), JJ.

Opinion by Eyler, J.

Dissenting opinion by Gould, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

In this appeal, Frederick County (the "County"), appellant, challenges a decision by the Maryland Public Service Commission (the "PSC" or the "Commission"), appellee, to approve a Certificate of Public Convenience and Necessity ("CPCN") for a 20 megawatt solar energy generating system ("SEGS") proposed by LeGore Bridge Solar Center, LLC ("LeGore"), appellee. While LeGore was seeking to build this solar facility (the "Project") on land zoned for agricultural use, two legislative enactments and one appellate case impacted LeGore's application, as follows:

• First, the County, responding to an influx of private proposals to build SEGS on agricultural land, changed its criteria and procedure governing special exceptions for commercial SEGS, by enacting an ordinance designated as Bill 17-07.

• Second, the General Assembly, responding to concerns of local jurisdictions about the development of generating systems, amended the statute governing approval of CPCNs, Md. Code (2010 Repl. Vol & Supp. 2019), § 7-207(e)(3) of the Public Utilities Article ("PU"), to add requirements that the PSC must give "due consideration" to "the consistency of the application with the comprehensive plan and zoning of" the county where the proposed system would be located and to "efforts to resolve any issues presented" by that county.

• Third, both this Court and the Court of Appeals decided that the statutory scheme granting the PSC regulatory authority over SEGS impliedly preempts local zoning regulation of such facilities, in Bd. of Cty. Comm'rs of Washington Cty. v. Perennial Solar, LLC, 464 Md. 610 (2019), aff'g, 239 Md. App. 380 (2018).

In reviewing the PSC's approval of a CPCN for the LeGore Project, we are called upon to consider how the timing and substance of these changes affected, first, the proposed order issued by the Public Utilities Law judge ("PULJ"); next, the order of the PSC; and then, the order affirming the PSC's decision by the Circuit Court for BaltimoreCity. The County challenges the legal reasoning in these decisions, presenting two questions:

1. Did the Public Utility Law Judge and the Public Service Commission err when they failed to apply the law in effect at the time their respective decisions/orders were issued?; and

2. Did the Public Service Commission err in its application and interpretation of the doctrines of "vesting" and "due process"?

Because we must "look through" the circuit court's decision, to determine whether the PSC erred, our focus is on the PSC's record and reasoning. See Md. Ofc. of People's Counsel v. Md. Pub. Serv. Comm'n, 246 Md. App. 388, 400 (2020) (citing Md. Ofc. of People's Counsel v. Md. Pub. Serv. Comm'n, 461 Md. 380, 391 (2018); Accokeek, Mattawoman, Piscataway Creeks Communities Council v. Md. Pub. Serv. Comm'n, 451 Md. 1, 11 (2016). As we understand the County's contentions in context, we must decide whether the PSC erred in failing to give due consideration to the County's comprehensive plan, zoning, and efforts to resolve issues concerning the Project, as required by PU § 7-207(e)(3), and whether the PSC erred in approving the LeGore CPCN based on the reasoning articulated in its order.

Although the administrative record reflects some consideration of the statutory factors by the PULJ, the prevailing majority of the PSC expressly declined to consider those factors. Likewise, they elected not to exercise the PSC's preemptive authority over the County's regulations and concerns. Instead, they determined that it would be "unfair" to deny the CPCN because LeGore "acquired a vested right in" a special exception issued by the County before changing its zoning regulations for commercial SEGS, so that"retroactive application of" those new standards and procedures would violate LeGore's right to due process.

For reasons that follow, we hold that the PSC erred in concluding that LeGore "acquired a vested right in its special exception[.]" Because the PSC expressly predicated its decisions not to give due consideration to the statutory factors under PU § 7-207(e)(3), and not to exercise its preemptive authority, on its erroneous treatment of LeGore's special exception as a vested right, we cannot affirm the PSC's order based on the reasons stated in that order. Nor may we substitute alternate grounds for the PSC's decision. Consequently, we shall vacate the judgment and remand for further proceedings that reflect the significant changes in the legal and factual landscape on which this Project is situated.

STATUTORY SCHEME GOVERNING CPCNs

In Perennial Solar, the Court of Appeals summarized the statutory framework governing applications for approval of a solar generating facility like the one proposed by LeGore, as follows:

In response to the growing concern over climate change, the Maryland General Assembly enacted legislation intended to reduce Maryland greenhouse gas emissions. The legislation included a specific intent to move the Maryland energy market away from historical reliance on fossil fuels and enacted a Renewable Energy Portfolio Standard ("RPS"). See Maryland Code, Environment Article ("EN") § 2-1201, et seq.; PU § 7-701.

The RPS statute, PU § 7-701, et seq., was originally enacted in 2004 to facilitate the State's transition to renewable energy sources. The objective of the RPS statute is to recognize and develop the benefits associated with a diverse collection of renewable energy supplies to serve Maryland. As part of its enactment, the General Assembly specifically determined that: "the benefits of electricity from renewable energy resources, including long termdecreased emissions, a healthier environment, increased energy security, and decreased reliance on and vulnerability from imported energy sources, accrue to the public at large;" and that the State needed to "develop a minimum level of these resources in the electricity supply portfolio of the State." PU § 7-702(b). The RPS includes specific targets for the share of electricity coming from solar electric generation. PU § 7-703.

In 2009, the Maryland General Assembly enacted the Greenhouse Gas Emissions Reduction Act of 2009 ("GRRA"), a law that requires the State to reduce greenhouse gas emissions from a 2006 baseline by 25% by 2020 and by 40% by 2030. EN §§ 2-1204, 2-1204.1; PU § 7-701, et seq. During the 2019 legislative session, the General Assembly adopted the Clean Energy Jobs Act, which increases the State's RPS target to 50% by 2030. Senate Bill ("S.B.") 516, 2019 Reg. Sess. (cross-filed as H.B. 1158). The Clean Energy Jobs Act also includes a significant increase in electricity sales derived from solar energy from 1.9% to 5.5% in 2019, and to 14.5% in 2028. Id.

The General Assembly has delegated to the PSC the authority to "implement a renewable energy portfolio standard" that applies to retail electricity sales in the State by electricity suppliers consistent with the specific timetable established by the statute. PU § 7-703(a). On an annual basis, the PSC is required to report to the General Assembly on the status of the implementation of the RPS program, including the availability of Tier 1 renewable sources such as solar energy. PU § 7-712.

Consistent with the PSC's duties to ensure compliance with the RPS, including the specific targets for the share of electricity coming from solar electric generation, the General Assembly has also delegated to the PSC the exclusive authority to approve generating stations in Maryland. Unless exempt by the statute, a generating station cannot be constructed unless the PSC issues a CPCN, which is only issued after a detailed application and approval process. PU § 7-207.

The PSC's review process of a generating station is extensive. Upon receipt of an application, the PSC provides notice of the application to: (i) the Maryland Department of Planning; (ii) the governing body, and if applicable, the executive of each county or municipal corporation in which a portion of the generating station is proposed to be constructed; (iii) the governing body of any county or municipal corporation within one-mile of the proposed location of the generating station; (iv) each member of the General Assembly representing any part of the county in which any portion of the generating station is proposed to be constructed; (v) each member ofthe General Assembly representing any portion of each county within one-mile of the proposed location of the generating station; and (vi) all other interested persons. PU § 7-207(c)(1). A copy of the application is also provided to each appropriate State unit and unit of local government for review, evaluation, and comment regarding the significance of the proposal to the State, area wide, and local plans or programs (see PU § 7-207(c)(2)), and to each member of the General Assembly who is provided with the statutory notice pursuant to PU § 7-207(c)(1). Id.

The statute requires that the PSC coordinate with and include the local governing body of the county or municipality in the CPCN public hearing process, and establishes a public hearing framework designed to ensure input and public comment from interested persons in the geographic area within which the generating station is being proposed:

(d) Public hearing. - (1) The Commission shall provide an opportunity for public comment and hold a public hearing on the application for a certificate of public convenience and necessity in each

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