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Where to site a solar energy facility properly remains an ongoing struggle in Maryland. Many have concerns these facilities will take productive agricultural land out of production, or that neighbors may not want the new facility moving in next door. In Perennial Solar, the Maryland Court of Special ruled that a solar energy generating system such as a solar energy farm falls under the jurisdiction of the Maryland Public Services Commission, including approval of the site location, preempting local zoning ordinances.
Background
Perennial Solar filed for a special exception and a variance with the Washington County Board of Zoning Appeals. Perennial was looking to build and operate a solar farm in Cearfoss, Maryland on 86 acres of land zoned for agriculture. After a public hearing, the Board approved the special exception and variance. Perennial then applied to the state’s Public Services Commission (PSC) for a Certificate of Public Convenience and Necessity (CPCN). Neighboring landowners appealed the decision granting the exception and variance to the Circuit Court of Washington County.
On appeal before the circuit court, Perennial argued that the PSC and the Public Utilities Article of the Maryland Code provided sole jurisdiction for approving a solar farm, including the site location approval, and requested the appeal be dismissed. The neighboring landowners claimed that Public Utilities Article allowed for local regulation of solar farms, including siting of the farms. The circuit court agreed with Perennial and dismissed the appeal. The neighbors appealed.
Discussion
On appeal, the appeals court had to determine if the Public Utilities Article preempted local zoning ordinances and if the PSC was limited to regulating only public service companies, Perennial, which is not a public service company, argued that the Public Utilities Article § 7-207 grants PSC the powers to regulate power generating stations such as solar farms and preempts local zoning ordinances related to location and construction of the facilities.
I have posted before about what preemption is; you can find that post here. But to review, preemption can be either implied preemption or expressed. Preemption occurs when a state statute conflicts with a local ordinance on the same subject. In those cases, the state statute preempts the local ordinance.
On appeal, the court interpreted the comprehensiveness of the Public Utilities Article as a primary indicator of implied preemption. Construction could not begin until approved by the PSC and receipt of a CPCN, looking at § 7-207. When reviewing an application, the PSC must provide public notice to interested parties. Included in the definition of “interested parties” are local governments (municipalities and counties) where the solar farm will be constructed. The law also provides for county zoning and planning boards to review, evaluate, and comment on the applications. PSC must also consider recommendations of the county and municipal governments where the solar farm will be constructed, along with a list of other factors not included in the county zoning ordinances.
The conclusion that the Public Utilities Article preempts local zoning ordinances is in line with a prior decision of the Maryland Court of Appeals. In Howard County v. Potomac Electric Power Co., the court held that the previous version of § 7-207 preempted local land use and zoning ordinances when it came to location and construction of certain transmission lines. In that case, the court found the comprehensiveness of the laws regulating the PSC in approving generating stations and transmission lines and allowing for local governments’ involvement in the process demonstrated preemption of local laws.
Next, the court turned to the issue of Perennial being under PSC jurisdiction. The neighbors argued that § 2-113(a)(1)(i) of the Public Utilities Article only gives PSC the authority to regulate public service companies. Looking at the definition of public service companies, Perennial did not qualify.
The court rejected this argument. Looking at § 7-207(b)(1)(i), the law requires that a “person” not begin construction till receiving approval from the PSC. Perennial was a person under the definition of the law, and the PSC did have authority over Perennial. The decision of the circuit court was affirmed.
Why Care
This case highlights the fact that for many solar energy facilities proposed for the state, the PSC potentially has more authority in approving the proposed sites than do county zoning boards. According to the law, the PSC must seek recommendations from the county governments on approving the applications for CPCNs. PSC will then consider these recommendations along with other factors in the law to determine if the CPCN should be approved.
In this case, Perennial first received the special exception and variance from local zoning ordinances in Washington County, then filed for the CPCN. Accordingly after this ruling, Perennial would only need to apply for the CPCN and in the process, the county zoning authority would provide recommendations based on the application. The PSC would have sole authority to determine location, siting, and how the facility would be constructed.
If you are presented with a solar energy agreement to put a solar energy farm on your property, take a look at past blog posts to understand issues to consider in reviewing those agreements.
References
Bd. Of County Comm’rs of Washington County v. Perennial Solar, LLC, No. 1022, 2018 WL 4090873 (Md. Ct. Spec. App. Aug. 28, 2018).
Howard County v. Potomac Electric Power Co., 319 MD 511 (Md. Ct. App. 1990).