"Infused in the Board's decision is the unauthorized concept that the Board can jettison the legislature's clear directive that it make certain environmental findings, and replace that direction with an unarticulated, standardless methodology which balances environmental harm with the project's overall societal benefits"
MONTPELIER – The last challenge facing the Sheffield wind project may well come down to of the most hallowed principles in a regulated marketplace.
Is the public getting a good deal? That question was front and center at a haring last week before the state Supreme Court. ln fact, it’s a question that has dogged the project ever since it was proposed by UPC Wind in February 2006.
The case has landed in the Supreme Court because opponents, a citizens’ group organized as the Ridge Protectors, believe the public good is not being well served by the project. And they are willing to put their money where their mouth is.
Their attorney, Daniel Hershenson, argued before the high court last Thursday, May 15, that a decision allowing the project to go forward should be overturned.
UPC Wind wants to site 16 towers standing 400 feet tall on ridge lines and mountains within the town of Sheffield. If it succeeds, it will sell not just electricity, but electricity produced by a renewable source of cheap energy at a time when states are cutting their reliance on fossil fuel.
In its brief to the court, UPC, which is also known as Firstwînd, argued the Legislature has concluded that “renewable energy projects, in particular, promote the general good of the state.”
Last August the Public Service Board (PSB) granted a certificate of public good to the wind company. Essentially the three-member board concluded that the economic benefits of the project outweigh the adverse impacts it would have on the environment and the region’s orderly development.
As the words imply, the public good can be an elusive concept. And in the case of the Sheffield project, the board may have made it even mare so by adding a condition to the company’s certificate of public good (CPG).
“For the project to promote the general good, we must include a requirement that UPC seek to negotiate stable priced contracts with Vermont utilities that would benefit Vermont ratepayers,” said the board in an order that ran to more than 100 pages.
But just how far the board meant to go with that requirement is now in the court’s hands to determine.
Over the last several months UPC had been unable to reach a stable priced contract with any Vermont utility. But it has taken pains to let the board know it is trying.
In a letter to the board dated November 2, 2007, the company, after acknowledging that no contracts had been reached, said it believed “it has made substantial progress with several of the utilities on fashioning long-term power arrangements that would include stable pricing terms.”
The letter concluded by reiterating that it is UPC’S intent to sell 100 percent of the Project’s output to Vermont utilities.”
Contract negotiations are said to be ongoing, but the absence of any contract puzzled Chief Justice Paul Reiber as he listened to arguments from the bench.
In a brief submitted prior to the hearing, UPC attorney Ronald Shems listed economic benefits the project would bring to Sheffield and the state, including $400,000 to $550,000 in local property taxes and another $200,000 from leasing land.
But Justice Reiber wanted to know where the power contracts with the utilities were. “How could they measure the economic benefits without the contracts?”
Mr. Shems replied that the contracts were only one small part of the package, and that “reasonable efforts” were being made to secure them. The board, he noted, had not made them a requirement.
But in a brief filed by the opposition, Mr. Hershenson repeatedly challenged that interpretation, arguing at one point that UPC would not meet the “public good requirements absent stably priced contracts.”
And he suggested that “whether a good faith effort was made to obtain a stably priced contract” should be grounds for another hearing before fhe board.
Chief Justice Reiber seemed surprised that, given the time that has passed since the board’s decision, the contracts “seem very much up in the air.”
In its brief, UPC notes that contracts are a two-way street, and the declsion to conclude one does not rest solely with the company.
Yet, in granting the CPG last year, the board sought to add an incentive. If UPC entered into stably priced contracts with utilities, the board said it might give the company a break if lower production than expected threatened to shut the project down.
“If actual production falls below 65 percent of projected production during any consecutive two-year period, a decommissioning review is initiated,” ordered the board.
“However, if UPC demonstrates that it has entered into stably priced power contracts with Vermont utilities through which a substantial amount of power is to be sold at stable prices, the board may reduce the decommissionlng trigger to as low as 50 percent.”
The day before the appeal went to the Supreme Court last week, the PSB, over the objections of the Ridge Protectors, accepted UPC’S amended decommissioning plan.
Department of Pubic Service attorney Josh Cotter said Tuesday that the company had put up roughly $1.3-million to fund a decommissioning plan. The sum is tied to a financial index, he said, that will enable it to increase over the project’s 20-year life span. At today’s prices, it would cost about $83,206 to take down one tower.
As far as economic benefits go, the decision by PSB to grant the wind company a CPG was unequivocally supported by the Department of Public Service, which serves as the public’s watchdog in hearings before the board.
“The Public Service Board properly found, based on evidence of record, that the proposed Windfarm would result in an economic benefit to the State of Vermont independent of any questions surrounding the desirability of the proposed power purchase contracts,” wrote Mr. Cotter in the department’s brief to the court.
But not everyone at the hearing agreed that the evidence on record was conclusive. Mr. Hershenson repeatedly took the board to task for not giving either the regional plan or Sutton’s town plan more weight when considering how the project would impact the orderly growth of the Northeast Kingdom.
Among other contentions, he accused the board of refusing to permit the Northeastern Vermont Development Association to give testimony in the case. He also said it failed to give “due consideration” to town plans of communities that surround the project.
His arguments, however, may have only tweaked the court’s curiosity. Who was the attorney representing?
“You’re not them,” noted Justice John Dooley. “They’re not here.”
“I’m confused,” said Justice Marilyn Skoglund. “They’re not here telling us.”
Aesthetics was the third issue of contention before the court. The Ridge Protectors contend in their brief that the board had not played by the rules when it came to balancing the adverse impact on aesthetics with the project’s benefits.
Mr. Hershenson accused the board of ignoring accepted standards in the field, like the Quechee test, and basing its conclusions on “some amorphous concept of ‘societal benefits.'” In print it was his most scathing indictment.
“Infused in the Board’s decision is the unauthorized concept that the Board can jettison the legislature’s clear directive that it make certain environmental findings, and replace that direction with an unarticulated, standardless methodology which balances environmental harm with the project’s overall societal benefits,” wrote the Norwich attorney.
But in its support of the project, the Department of Public Service pointed to 14 findings in the record that supported the board’s conclusion the project would not have an undue adverse impact on its surroundings.
Writing in his brief, Mr. Cotter said that the “distance of the turbines in conjunction with the recreational activity in the foreground will tend to de-emphasize the view of the turbines from the Crystal Lake State Park.”
Oral arguments before the high court are commonly brief, while the time it takes the five justices to render a decision can be lengthy. Since 1988, the high court has heard 95 appeals brought against decisions issued by PSB, a state regulatory agency whose roots go back to the nineteenth century when it served as a railroad commission.
Of the 95 appeals, eight have prevailed – either reversed or remanded back to the board, according to Supreme Court Clerk Catherine Gattone. In some cases the decision took two years.
by Paul Lefebvre
May 21, 2008
The Barton Chronicle
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