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Mathis v. Iowa Utilities Board

Supreme Court of Iowa

May 3, 2019

BERTHA MATHIS and STEPHEN MATHIS, Appellants,
v.
IOWA UTILITIES BOARD, Appellee, and PALO ALTO WIND ENERGY, L.L.C. and MIDAMERICAN ENERGY COMPANY, Appellees, and PALO ALTO COUNTY BOARD OF SUPERVISORS, Appellee.

          Appeal from the Iowa District Court for Palo Alto County, Nancy L. Whittenburg, Judge.

         Landowners appeal a district court order affirming a declaratory order issued by the Iowa Utilities Board. AFFIRMED.

          Wallace L. Taylor of Law Offices of Wallace L. Taylor, Cedar Rapids, and John M. Murray of Murray and Murray, Storm Lake, for appellants.

          Cecil I. Wright II, Assistant General Counsel, and Emily Willits, Assistant Attorney General, for appellee Iowa Utilities Board.

          Bret A. Dublinske and Brant M. Leonard of Fredrikson & Byron, P.A., Des Moines, for appellees Palo Alto Wind Energy, L.L.C. and MidAmerican Energy Company.

          Sheila K. Tipton and Haley R. Van Loon of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, PLC, Des Moines, and Peter C. Hart, Palo Alto County Attorney, for appellee Palo Alto County Board of Supervisors.

          MANSFIELD, JUSTICE

         In this case we are asked to review a longstanding Iowa Utilities Board (IUB) legal standard for when a series of wind turbines constitute an "electric power generating plant or combination of plants at a single site" within the meaning of Iowa Code section 476A.1(5) (2017). The statute itself does not provide an obvious answer. Each wind turbine on its own generates energy, but wind turbines are often combined into "wind farms" or "wind projects" dispersed over a wide geographic area. So what is "a single site"?

         Since 1997, in over twenty separate proceedings, the IUB has provided a consistent middle-path answer. It has ruled that for wind energy purposes all turbines connected to a single gathering line shall be considered a "single site" or "facility." Turbines connected to separate gathering lines are treated by the IUB as different sites or facilities. This ruling means that a large wind project may avoid the need for a certificate of public convenience, use, and necessity because it does not meet certain minimum power output requirements, although the IUB has authority to waive that requirement in some circumstances in any event.

         Here, landowners in Palo Alto County are challenging a large 170-turbine wind project. They contend the IUB should have exercised jurisdiction over it by treating it as one facility. The IUB declined to require a certificate for the facility because, under the common-gathering-line standard, it did not exceed the minimum power output requirements. This meant that the County, rather than the IUB, had primary oversight over the project. The district court upheld the IUB's position.

         On our review, we conclude the legislature has not clearly vested the IUB with authority to interpret Iowa Code section 476A.1(5). Nonetheless, after reviewing the chapter as a whole and considering other factors relevant to statutory interpretation, we cannot find fault with the IUB's interpretation of an inherently ambiguous term. For this reason, we affirm the judgment of the district court upholding the IUB's declaratory order.

         I. Facts and Procedural History.

         This case involves a wind energy project in Palo Alto County consisting of 170 wind turbines. Each turbine has a capacity of two megawatts; the overall capacity of the project is up to 340 megawatts of energy.

         Palo Alto Wind Energy, L.L.C. (PAWE) submitted a "site plan" to the County for the project. The project extends over a wide swath of farmland-approximately 50, 000 acres (about eighty square miles) in four separate townships.

         Each turbine would have a hub height of 95 meters and a rotor diameter of 110 meters. Thus, from the ground to the tip of the rotor would measure 150 meters.

         Bertha and Stephen Mathis live in Palo Alto County. On December 5, 2017, they filed a petition for declaratory order with the IUB. The Mathises sought a ruling that the project was a "facility" within the meaning of Iowa Code section 476A.1(5) for which a certificate of public convenience, use, and necessity from the IUB was required before the project could go forward.[1]

         Iowa Code section 476A.1(5) defines a facility as

any electric power generating plant or a combination of plants at a single site, owned by any person, with a total capacity of twenty-five megawatts of electricity or more and those associated transmission lines connecting the generating plant to either a power transmission system or an interconnected primary transmission system or both.

Iowa Code § 476A.1(5) (emphasis added).

         Since 1997, in recognition of the "single site" language in the definition of "facility," the IUB has consistently taken the position that a wind project comprising multiple turbines and extending over a geographic expanse does not constitute a single "facility." Rather, in the context of a wind energy project," 'facility' refers to the wind turbines connected to a common gathering line." Zond Dev. Corp., Docket Nos. DRU-97-5, DRU-97-6, at 6 (November 6, 1997). Thus, in Zond, where the wind turbines were dispersed over 20 square miles (for one project) and 15 square miles (for another), but the subset of turbines connected to a common gathering line never exceeded twenty-five megawatts in power capacity, the IUB concluded that there was no covered "facility" for which a certificate of public convenience, use, and necessity was required. Id. at 5, 6. It is not disputed that the IUB has followed Zond in approximately twenty different regulatory proceedings since 1997.

         On December 22, 2017, the Palo Alto County Board of Supervisors (Board), MidAmerican Energy Company (MidAmerican), PAWE, the Environmental Law & Policy Center, and the Iowa Environmental Council were granted leave to intervene in the Mathises' declaratory order proceeding. Later, Interstate Power and Light was allowed to intervene.

         On February 2, 2018, the Iowa Utilities Board issued its declaratory order, finding,

The Board has ruled on the issue presented by Petitioners on several prior occasions, beginning with its order in Zond Development Corporation, Docket Nos. DRU-97-5 and DRU-97-6. In Zond, the Board found that "facility" "refers to the wind turbines connected to a common gathering line." Zond, "Declaratory Ruling" (November 6, 1997). On multiple occasions the Board has confirmed the gathering line standard as its interpretation of "facility." See e.g., MWW Holdings, LLC and Storm Lake Power Partners I, LLC, "Order Granting Waiver," Docket No. WRU-2015-0001-3700 (February 6, 2015) ("[I]f the capacity of turbines connected to a single gathering or feeder line is less than 25 MW of nameplate capacity, there is no facility as defined in Iowa Code § 476A.1(5)."); MidAmerican Energy Company, "Declaratory Order," Docker No. DRU-03-3 (June 6, 2003) ("[T]he term 'facility' refers to the wind turbines connected to a common gathering line at a single site.")
The Petitioners request that the Board reconsider its prior decisions on this issue and find that the Project meets the definition of a facility even though it will have less than 25 MW of capacity on any gathering line. However, Petitioners have presented no compelling justification to overturn this well-established Board precedent, nor have Petitioners distinguished the facts and circumstances surrounding the Project from any of the other wind energy projects that the Board has considered when finding that the term "facility" refers to the wind turbines connected to a common gathering line at a single site. Further, the Board issued the Zond decision on November 6, 1997. Since that decision, the Legislature has not taken action to modify the statutory language or otherwise addressed the Board's interpretation. Nor has any court addressed the issue.
For the foregoing reasons, the Board reaffirms its longstanding determination that the term "facility" is measured by the nameplate generating capacity of the wind turbines connected to a single gathering line.

         On February 5, the Mathises filed a petition for judicial review pursuant to Iowa Code section 17A.19 in the Iowa District Court for Palo Alto County. The IUB, PAWE, and MidAmerican answered. Subsequently, the Board intervened and answered as well.

         On July 3, the district court entered a ruling affirming the IUB's declaratory order. It concluded,

[T]he IUB's interpretation of the meaning of "facility" under Iowa Code § 476A.1(5) as referring to the wind turbines connected to a common gathering line at a single site was well within the grant of authority made by the legislature to the Board and the Court does not find substantial evidence or reason in this record why it should not give deference to the IUB's interpretation. Further, as is discussed herein below, on this record this Court is unable to conclude that the IUB's actions or decision have been irrational, ...

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