DHR, HNWD, and SCC File Briefs

As stipulated by Virginia State Corporation Commission (SCC) Hearing Examiner Alexander Skirpan on December 22, briefs were filed January 4 in support of and in opposition to the Virginia Department of Historic Resources (DHR) complaint against Highland New Wind Development (HNWD).

A “Complainant’s Brief in Support of Its Complaint” was submitted on behalf of DHR by Assistant Attorney General Steven Owens.

A “Brief in Opposition to the Department of Historic Resources Complaint” was submitted on behalf of HNWD by Mark Obenshain, counsel for HNWD.

In addition, a “Staff Brief” was submitted on behalf of the staff of the State Corporation Commission by SCC General Counsel William Chambliss.

Following is my effort to decipher where things stand.

DHR Makes Five Arguments

SCC Can’t Now Accept an Argument it has Already Rejected.

During the proceedings leading up to the issuance of the Final Order on December 20, 2007, HNWD claimed that in working with Highland County to obtain a Conditional Use Permit (CUP), all actions that could be taken with respect to historic resources had been taken, that Camp Allegheny would not be adversely impacted, and that placing any further requirements on the developer would create unacceptable financial burdens. HNWD asked that the requirement to “coordinate with DHR” be deleted from the Final Order.

The SCC specifically rejected HNWD’s position and retained the requirement for coordination with DHR in the Final Order. Yet, despite the SCC’s rejection of HNWD’s position, the developer has continued to make this same argument over and over. Mr. Owens asks the Commission to once again reject HNWD’s position, just as they did in 2007, and find in favor of DHR.

HNWD Can’t Take a Position that Contradicts a Prior Position.

Mr. Owens notes that HNWD was obligated to raise all legal issues it wanted considered by the Commission during the proceedings leading up to the issuance of the Final Order.

HNWD did not during those proceedings allege that Camp Allegheny should not be considered because it is located in West Virginia. DHR asserts that since HNWD did not raise this objection during the proceedings in chief (in fact, the company didn’t raise this objection until December, 2009) HNWD can’t raise it now, as a bar to enforcement of the terms of the Final Order.

Further, Owens argues that according to the doctrine of “Judicial estoppel,” HNWD cannot take a position that is inconsistent with or contradictory to its prior positions. During the course of the prior proceedings HNWD raised objections to claims of Camp Allegheny’s significance and of the negative impact of the wind turbines on the site, but never said Camp Allegheny wasn’t a legitimate issue. All of the company’s actions have been consistent with their acceptance of Camp Allegheny as a legitimate issue to be considered by Highland County and by the Commission. It would be inconsistent for the Commission to now allow HNWD to advance the argument that Camp Allegheny should not be considered at all.

The Final Order Must be Interpreted so that it Has Meaning.

Mr. Owens advances the argument that, while the SCC acknowledged in the Final Order that the prior actions of Highland County imposed a limiting effect on their authority, the Commission nonetheless included the specific requirement that HNWD coordinate with DHR.

Including such a provision makes no sense unless the Commission intended the coordination with DHR to go beyond what HNWD had already done to obtain the CUP from Highland County. Yet, HNWD has continued to argue that they don’t have to take further actions related to “viewshed” or the visual impact of their project on historic resources, because the CUP resolved all such issues.

If HNWD’s argument is accepted, then the Commission issued a Final Order devoid of meaning, at least with respect to DHR. Owens states: “It is impossible to interpret the plain language of the Final Order regarding coordination with DHR to have any meaning if HNWD’s argument is accepted.”

HNWD’s position that the only thing the Final Order requires is that they identify affected historic assets, but not take any action to minimize and mitigate the impact of the project on those assets, strips the Commission’s directive of any practical meaning.

Protecting Resources Adjacent to Virginia is in the Commonwealth’s Interest.

For reasons both practical and expedient, the Commonwealth routinely works with adjacent states to protect natural resources. Mr. Owens sites the Potomac River, the Chesapeake Bay, and the Great Dismal Swamp as examples.

He notes HNWD’s tacit understanding of this concept, in that by agreeing to protect various species of bats and birds, HNWD did not argue that they should only protect those originating in Virginia. Nor was this a concern of the Commission, “since the resource to be protected was the wildlife, not wildlife from a particular place.”

Mr. Owens argues that when a project located in the Commonwealth is adjacent to an historic asset located in another state, DHR may well be the only governmental entity in a position to protect it, since the project is not subject to the jurisdiction of the state where the asset is located. He states: “Resources that otherwise deserve protection should not suffer simply because they are located across a boundary line, particularly resources that have been afforded national level protection and recognition.”

He makes the additional point that preserving the good will of neighboring states is a legitimate strategy for protecting historic resources located in the Commonwealth. The underlying question is implied: What if the tables were turned? What if the wind project were located in West Virginia and Camp Allegheny in Virginia?

The Final Order has Expired.

The sunset provision in the Final Order requires HNWD to begin construction within two years of the date of the Order, or December 20, 2009.

While HNWD has obtained a grading permit, and has begun road building activities, the company has not pulled a building permit nor requested an extension of the sunset date. As a consequence, Owens asserts that HNWD “is no longer entitled to pursue this project.”

So far so good, right? But then things get very strange.

An Odd Either/Or Request

Mr. Owens asks EITHER that HNWD be ordered to engage in mitigation efforts acceptable to DHR in an amount not less than ¼ the amount committed to Department of Game and Inland Fisheries mitigation (regarding bird and bat mortality) in the Final Order, OR that HNWD’s certificate of public convenience and necessity granted the developer by the Final Order be terminated.

Now, obviously, I’m not an attorney, and so my interpretation of what this means might be off base. But here goes:

In issuing their Final Order, the SCC found that risk to bats and birds fell within “the required statutory analysis of environmental impact and the public interest.” As such, the Commission directed HNWD to comply with a monitoring and mitigation plan set forth in Attachment A to the Order.

On page 17 of the Final Order, the Commission finds that the mitigation cost cap shall be the higher of $50,000 or 0.85% of the prior year’s gross revenues. The plan explicitly does not require annual expenditure of funds up to the caps. However, the Commission notes that: “The mitigation cost cap could prove insufficient if the cap is routinely met, yet the bird and bat carnage continues to exceed target levels.”

Now, it is my understanding that mitigatory measures, and thus the costs of such measures, will be entirely based on the results of the monitoring of bird and bat mortality. In other words, the more out-of-line with DGIF targets the bird and bat carnage is found to be, then the more complex and costly the mitigation that DGIF will impose—up to the cap.

Owens asks for mitigation efforts “in an amount not less than ¼ the amount committed to DGIF mitigation.”

Does that mean ¼ of $50,000 or ¼ of 0.85% of the prior’s year’s gross revenues, every year, regardless whether or not HNWD is required by DGIF to pay for mitigation?

Or does it mean ¼ of whatever HNWD is actually required by DGIF to spend? In other words, the fewer bird and bat deaths, the less money HNWD would be required to spend on mitigation for Camp Allegheny? The more bird and bat carnage, the more money HNWD would be required to spend on mitigation for Camp Allegheny?

Talk about a devil’s bargain.

And, what sort of “mitigation efforts acceptable to DHR” would these indeterminate and fluctuating sums buy? What does DHR have in mind?

Simple logic would indicate that, in the case of negative visual impact, money does not and cannot equal mitigation. Yet, DHR has steadfastly declined to require any modification in location, design or construction of the wind project.

If HNWD were forced to choose between this option and the termination of their certificate, no doubt they would choose it in a flash. Termination of their certificate would require the company to start the application process all over again. Seven years down the line, it’s hard to imagine even HNWD having the resources or the stomach for it. Then again, one never knows.

The question is most likely academic. Right now, the odds of the Hearing Examiner ruling in favor of DHR look pretty slim.

SCC Brief Aligns with HNWD

Writing for the Staff, Mr. Chambliss states: “The sole question for the Examiner is whether HNWD is in compliance with the Final Order. Staff submits that HNWD is in such compliance, has fulfilled the requirements of the Final Order, and that this matter should be dismissed.”

Mr. Chambliss would seem to be in complete agreement with the arguments set forth by Mr. Obenshain when he asserts that the CUP issued by Highland County fully considered the matter of viewshed and therefore the Commission is prohibited, by Virginia statute, from imposing any additional requirements in relation to it. “Since Highland County considered all matters conceivably addressing the visual impact of the project on the environment, the Commission is without authority to impose any additional related condition.”

In regards to the specific issue of visual impact on Camp Allegheny, Chambliss states that DHR has not established that it has jurisdiction over the site, but regardless whether or not the department has such authority, it must exercise whatever authority it believes it possess over HNWD directly. In short, the SCC can't require HNWD to do what DHR wants.

Mr. Chambliss concludes: “The law is quite clear that the Commission has no authority to impose any additional condition in these regards, as the Final Order properly finds. Whether or not one agrees with the wisdom of the legislation that limits the Commission from imposing additional conditions on matters considered by other agencies, the plain fact is that this is unquestionably the state of the law. Since the Commission can effect no relief on the Department's complaint, it should be dismissed.”

Given the fact that this conclusion is precisely Obenshain’s, I’ll spare you the blow by blow. You get the picture.

Something about this situation reminds me of the Emerson quote: “A foolish consistency is the hobgoblin of little minds.” I recognize that the law has limits. However, if proof exists—and I would argue that in this instance it does exist—that adherence to the letter of the law subverts the spirit of the law, and in so doing fails to serve the public interest, maybe its time to change the law.

There’s more to consider, but I’ll stop here for now.