Washington Supreme Court Establishes Important Energy Siting Precedent

by Stoel Rives LLP
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We’re very pleased to report on a significant energy siting victory achieved by our client SDS Lumber Co. and its subsidiary, Whistling Ridge Energy LLC, at the Washington Supreme Court yesterday. We believe the decision sets an important precedent for energy facility siting in Washington. The case is Friends of the Columbia Gorge, Inc. and Save our Scenic Area vs. State Energy Facility Siting Council and Governor Gregoire, et. al., No. 88089-1.

At issue was the approval of a wind energy project to be sited near the Columbia River Gorge National Scenic Area. Then-Washington Governor Christine Gregoire had approved the project in March 2012 following recommendation by the State of Washington's Energy Facility Site Evaluation Council (EFSEC). Two environmental groups, Friends of the Columbia Gorge, Inc. and Save our Scenic Area, then sued in an attempt to get the site approval overturned.

On August 29, 2013, the Supreme Court ruled there was "no basis" to reverse the EFSEC's recommendation or the Governor's approval, and dismissed the appeal. In so doing, the Court gave an unequivocal affirmation for an objective, criteria-based process for the approval of energy projects. The Court confirmed that it will defer to EFSEC and the Governor when the siting decision demonstrates consideration of the entire record and sound application of regulatory standards.

Stoel Rives represented Whistling Ridge Energy, LLC, throughout the three-year approval process, and prevailed in demonstrating the project's compliance with a host of federal, state and local regulatory standards. As the Court noted (quoting EFSEC), the comprehensive approval process "set a record for length, volume, and number of issues addressed." We subsequently represented Whistling Ridge throughout the trial and appeals process.

Review of the Court’s Decision

In its ruling, the Court emphasized that EFSEC operates in “unique statutory framework,” with the legislature granting much discretion to both EFSEC and the Governor. EFSEC conducts the project review process, based on statutory and regulatory standards, and makes a recommendation to the Governor. The framework “requires the involvement of various stakeholders, including environmental groups, throughout the process, and in EFSEC’s ultimate decision.” Further, the EFSEC statute is fundamentally based on the legislature’s recognition of the “importance of increasing the State’s energy output.” Consequently, the Court held that its review of EFSEC decisions will be deferential and “necessarily limited.”

The Court found that the opponents’ challenge focused on “technical” alleged deficiencies and an “extreme reading” of RCW Ch. 80.50 and EFSEC’s administrative rules, ignoring “the broader framework of the application process” and “misunderstand[ing] EFSEC’s role in balancing competing interests.” The Court found that the EFSEC application “is the starting point of a longer process,” where “specific decisions are addressed throughout the process.” Minor deficiencies in applications of the complexity of those involved in EFSEC proceedings “are to be expected and do not warrant reversal.” The Court added that “invalidation of the completed review and recommendation would also defeat the purpose of extended hearings and ongoing oversight of the project.”

The opponents further contended that EFSEC failed to render a final decision regarding Whistling Ridge’s voluntary offer to conserve a mitigation parcel to address potential wildlife impacts, contending that EFSEC lacked authority to defer consideration of this offer. The Court brushed aside the opponents’ attack on this issue, finding that “would be impractical” to achieve complete resolution of all mitigation issues “in the planning stage” due to the “complicated nature of [EFSEC] projects and the likelihood that additional issues will arise later.” Finding that EFSEC has the discretion to seek public comment and conduct adjudications later, if necessary, the Court dismissed this and similar issues as being “not ripe” for resolution.

Finally, breathing additional life into its prior holding in Residents Opposed to Kittitas Turbines v. State Energy Facility Site Evaluation Council, 165 Wn.2d 275, 197 P.3d 1153 (2008), the Court punctuated EFSEC’s authority to preempt conflicting regulations in order to allow energy facilities to move forward. Without question, projects like Whistling Ridge which are allowed by local zoning codes may be approved, notwithstanding alleged minor discrepancies with local comprehensive plans and other regulations. Moreover, locally adopted moratorium ordinances are subject to EFSEC’s preemptive authority, and may not interfere with EFSEC’s authority to approve energy facilities.

The Court found that the opponents could not prove that they were “substantially prejudiced” by the claimed (and unproven) “shortcomings,” holding that Whistling Ridge “substantially complied” with all of EFSEC’s regulatory standards. Reviewing a host of alleged deficiencies, the Court held that “EFSEC properly considered the conflicting evidence and made its recommendation in light of the entire record.” Consequently, the Court held that the opponents failed to meet their burden to prove error justifying reversal of Governor Gregoire’s decision.

The Right Decision Was Reached

We are pleased to have played our part in the evolution of the siting process, and we congratulate the EFSEC and the Governor for conducting open, public processes, where the “goal posts” are clearly and fairly defined for all parties, up front, and consistently throughout the siting process.

We also applaud our client for standing up against a significant environmental group challenge, and consistently “doing the right thing.” "The Siting Council, the Governor and now the state's Supreme Court have all recognized that this project is outside the National Scenic Area, and that all impacts have been appropriately mitigated," said Jason Spadaro, president of Whistling Ridge Energy, LLC. "We look forward to finally proceeding with the business of securing markets for our energy and creating local jobs."

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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