UPDATES & ANALYSIS

5.13

Iowa Supreme Court upholds Utilities Board rule that eases regulation of wind farms

by Rox Laird | May 13, 2019

Is a wind farm with 170 windmills spread over 80 square miles a single power plant or a collection of separate power plants?

According to the Iowa Utilities Board, it is the latter, and the Iowa Supreme Court deferred to that statutory interpretation in a decision handed down May 3.

The Court, in a unanimous decision written by Justice Edward Mansfield, said in Mathis v. Iowa Utilities Board that 170 windmills on a Palo Alto County wind farm should be considered not a single power-generating “facility” for legal purposes but a smaller collection of windmills tied together by a single “gathering line.”

The distinction is important because defining the entire collection of windmills as a single power-generating facility would put the wind farm in the class of large power electric-generating facilities that require the Utilities Board to issue a certificate of public convenience, use, and necessity, which would have required an extensive study of the project’s impact on the environment and affected residents.

As a result, Palo Alto County, rather than the Iowa Utilities Board, has primary oversight over the proposed wind farm. The plaintiffs also sued the Palo Alto County Board of Supervisors for its action approving the wind farm, but the Supreme Court, in a separate ruling (Mathis v. Palo Alto County Board of Supervisors) also handed down May 3, held unanimously that the county properly acted within its authority in its approval process.

Taken together, the two rulings could have a significant impact on wind energy in Iowa in the future, the Iowa Utilities Board had argue in its brief filed with the Court that a decision against its longstanding precedents regarding certification of wind farms could have cast uncertainty on “billions of dollars in existing and planned wind energy development projects.”

“The issue whether most large wind farms, as currently designed, need to be certified by the IUB under Chapter 476A has been the subject of several rulings over the past 20 years, all coming to the same conclusion, that a certificate is not required,” Nyemaster Goode attorney Kathy Law told On Brief in our earlier post on this case.

Law, who represents wind energy developers, notes that “developers have relied on the interpretation of a ‘facility’ under Section 476A.1, and have invested billions of dollars in Iowa, creating good-paying jobs, a stable source of income for participating landowners, improving infrastructure in the counties in which the projects are built, and significant tax revenues from the counties from the taxation of the wind facilities.”

Palo Alto County residents and property owners Bertha and Stephen Mathis had petitioned the Iowa Utilities Board to classify the entire wind farm a single generating facility, but the board cited its regulatory stance that for more than two decades has used the common-gathering-line definition.

The question before the Court was whether the board properly interpreted Iowa Code chapter 476A, which regulates electric power generation and transmission. The Court ruled that the statute does not explicitly vest the Iowa Utilities Board with authority to define a “single site” in regulating power plants. Thus, the issue before the Court was whether the board reasonably interpreted the statute.

Although the language in the statute is vague, the Court said, it agreed with the board’s definition that a single site is “something less than an entire wind farm” because “we do not think ‘single site’ would ordinarily be associated with an expanse of some 80 square miles,” Mansfield wrote.

“Unlike a coal-fired plant, say, alternative energy facilities such as wind may have multiple points from which energy is generated that can be dispersed over a broad area,” Mansfield wrote. “At some point, a succession of wind turbines across an Iowa landscape ceases to be just one site and becomes multiple sites. To avoid repeated litigation of the issue, a clear rule that can be reconciled with the statutory language is needed. Focusing on the common gathering line provides such a standard.”

Moreover, the Court pointed out that the Legislature has declared in statute that it is “the policy of this state to encourage the development of alternate energy production facilities,” and it gave the Iowa Utilities Board authority to waive the requirement that any new electrical energy facility obtain a certificate of public convenience, use, and necessity if the public interest would not be adversely affected.

Thus, the Court favored a statutory interpretation that tends to minimize the Iowa Utilities Board’s regulatory burden on wind farms.

“As a court of generalists, not energy specialists, we are unable to say with confidence that the common-gathering-line standard is superior to all other tests for when a wind project should be deemed a single site or facility,” Mansfield wrote. “What we can say is that compared to the standard advanced by the Mathises, it is more consistent with the underlying statutory language and more in line with the legislature’s policy goals.”

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