Renewable Energy

By: Peggy Kirk Hall, Friday, September 08th, 2023

The road to building a 175 MW 1,200 acre solar development project in Greene County just became a bit longer for Vesper Energy, the company behind the project.  On September 6, the Ohio Supreme Court dismissed the company’s appeal of a ruling by the Ohio Power Siting Board (OPSB) that denied a certificate of approval for the project.  The Supreme Court dismissed the case for “lack of jurisdiction.”

The Ohio Power Siting Board denied the Kingwood Solar application last December on grounds that the project would not serve the “public interest, convenience, and necessity” due to general opposition from the community, and especially the clear opposition of the Greene County commissioners and the three townships where the project would locate.  As permitted by Ohio law, Kingwood Solar and several other parties to the case requested a rehearing on the OPSB’s decision. 

The OPSB granted the rehearing request on Feb. 7 “for the purpose of affording more time to consider the issues raised.”  However, Kingwood Solar appealed the board’s decision, stating that the OPSB failed to issue its decision on the rehearing request within the thirty days required by Ohio Revised Code 4903.10.  Kingwood Solar raised ten arguments against the OPSB’s denial of the project, asking the Ohio Supreme Court to declare that denial to be “unlawful or unreasonable.”

The OPSB asked the Court to dismiss the Kingwood appeal, arguing that until the OPSB issued a decision on the rehearing, the Court did not have jurisdiction to hear the case.  The Supreme Court granted the OPSB’s motion to dismiss.  The Court did not issue a full opinion in support of its decision to dismiss the case, but referred to a 1988 Ohio Supreme Court opinion holding that the Supreme Court does not have jurisdiction over a case while a rehearing request is pending with the OPSB,

What does the dismissal mean for Kingwood Solar?  Vesper Energy must now wait for the OPSB to make a decision on the rehearing requests.  The OPSB could affirm its earlier decision to deny the permit or could reverse that decision.  Currently, the OPSB has not scheduled a new hearing for the application.

Follow the Kingwood Solar application on the OPSB website.

Post-it notes with insurance coverage questions.
By: Jeffrey K. Lewis, Esq., Friday, August 25th, 2023

With just over a week left until echoes of “Hang on Sloopy” and chants of “O-H” and “I-O” can be heard from Buckeye faithful across the nation, we thought we would provide you with some light reading to hold you over until that long awaited 3:30 kick off. In this edition of our Ag Law Harvest, we focus on three recent Ohio Supreme Court cases that could potentially impact business owners, Northern Ohio landowners, and Ohio taxpayers. 

Assault and Battery: Is it Covered Under an Insurance Policy?
A victim of a stabbing at an Ohio adult care facility is unable to collect judgment from the facility’s insurance company after a recent decision by the Ohio Supreme Court. The victim was living at the facility when another resident stabbed him. The perpetrator was later indicted on criminal charges but found not guilty by reason of insanity. 

The victim then filed a civil lawsuit against the perpetrator and the facility to recover for damages resulting from the stabbing injuries. The victim ultimately dropped his lawsuit against the perpetrator and entered into a settlement agreement with the facility. As part of the settlement agreement, the victim agreed not to pursue the judgment against the facility, and instead, sought to collect his judgment from the facility’s insurance company.   

At the time of the stabbing, the adult care facility had a commercial general liability policy. When the victim sought judgment from the facility’s insurance company, the insurance company refused to provide coverage. The insurance company explained that the insurance policy contained a provision that specifically excluded coverage for any bodily injury resulting from an assault or battery. The specific provision at issue stated: 

 

The victim argued that because the perpetrator was found to be not guilty by reason of insanity in the criminal trial, the exclusion provision was nullified because the perpetrator lacked the subjective intent to commit any assault or battery. 

The Ohio Supreme Court disagreed. The Court explained that the plain language of the exclusion provision of the insurance policy at issue is clear – there is no intent requirement included in the exclusion language. Therefore, the Court held that coverage did not exist for the willful assault on the victim. The Court sympathized with the victim but ultimately could not interpret the insurance policy language to include a subjective intent requirement where none existed. 

This case demonstrates the importance of reading and understanding your business insurance policy. Insurance policies are, at the core, contracts between two parties and the language contained within the policy will usually govern that contractual relationship. What you assume is covered under your policy may not necessarily be the case. Furthermore, not all insurance policies are the same. We have seen Ohio cases where an insurance policy does require the presence of some subjective intent in order for an assault and battery exclusion to apply. Speak with your insurance agent and/or attorney to make sure you understand when and where coverage exists, knowing this can be critical to protecting you, your farm, and/or your business. 

Ohio Supreme Court Approves Northern Ohio Wind Farm. 
Residents of Huron and Erie Counties along with Black Swamp Bird Conservatory (the “Plaintiffs”) recently lost their battle in court to prevent the construction of a new wind farm in Northern Ohio. The Plaintiffs argued that the Ohio Power Siting Board (the “Board”) failed to satisfy Ohio law before granting the new wind farm its certificate of environmental compatibility and public need. Specifically, the Plaintiffs assert that the wind farm could “disrupt the area’s water supply, create excessive noise and ‘shadow flicker’ for residents near the wind farm, and kill bald eagles and migrating birds.” 

The Ohio Supreme Court found otherwise. The Court concluded that the Plaintiffs failed to establish that the Board’s granting of the certificate was unlawful or unreasonable. As approved, the new wind farm will consist of up to 71 turbines and cover 32,000 acres of leased land. To read more about the Ohio Supreme Court’s decision visit: In re Application of Firelands Winds, L.L.C.

Ohio Supreme Court Sets New Precedent on Interpreting Ohio Tax Law.
In Ohio, most retail sales are subject to sales tax unless a certain exemption applies. Ohio law does have a sales tax exemption for equipment used directly in the production of oil and gas. A fracking business recently challenged a decision by Ohio’s Tax Commissioner and Board of Tax Appeals that levied the sales tax on certain equipment purchased by the business. The fracking equipment at issue included: a data van, blenders, sand kings, t-belts, hydration units, and chemical-additive units.

The Tax Commissioner concluded that the fracking equipment was not used directly in the extraction of oil and gas, only indirectly, and therefore, did not qualify for the tax exemption. The Ohio Supreme Court felt differently. 

The Court found that all the equipment, except the data van, is used in unison to expose the oil and gas. Because the equipment is used to expose the oil and gas – a necessary part of fracking – the Court had little difficulty concluding that the equipment is being used directly in the production of oil and gas. 

In addition to the equipment’s direct use in the production of oil and gas, the Court also recognized that the fracking equipment may also have a storage or delivery function/purpose. However, the Court reasoned that a piece of equipment’s function must be viewed through the “primary purpose” lens. For example, the Court held that although the blender equipment in this case performs a holding function, the primary use of the blender is to mix “the critical ingredients in the fracking recipe seconds before the mixture is inserted into the well.” Therefore, the Court found that the blender’s holding function did not disqualify it from Ohio’s sales tax exemption. 

Additionally, in this case, the Court also issued an opinion on how Ohio courts should interpret tax law moving forward. Normally, courts use the ever-important legal principal of stare decisis to help it decide on new cases. Stare decisis is the principal that courts and judges should honor the decisions, rulings, and opinions from prior cases when ruling on new cases. Here, the Court took its opportunity to acknowledge that in the past the Court interpreted tax exemptions against the taxpayer, favoring tax collection. But the Court made clear that from here on out, the Court “will apply the same rules of construction to tax statutes that [it applies] to all other statutes” without a slant toward one side or the other. The Court concluded that its task “is not to make tax policy but to provide a fair reading of what the legislature has enacted: one that is based on the plain language of the [law].” 

To read the Ohio Supreme Court’s decision visit: Stingray Pressure Pumping, L.L.C. v. Harris

Aerial view of a field of solar panels in Ohio
By: Peggy Kirk Hall, Thursday, August 03rd, 2023

A long process to update Ohio’s regulations for solar energy facility development has nearly reached its end.  On July 20, the Ohio Power Siting Board (OPSB) adopted new rules that include revisions to rules that apply to solar facilities under its jurisdiction—those that have a nameplate capacity of 50 megawatts or more.  The rules will next go to the Ohio legislature’s Joint Committee on Agency Rule Review (JCARR) for a final review before they can become effective.

The OPSB began the rules review in 2020.  The process included stakeholder meetings, public workshops, a draft proposal of revisions, and a review of comments to the draft rules.  Many parties and interested individuals followed the process, and the agency received formal input from 20 parties and over 400 informal public comments.  The OPSB recognized that the rules review “inspired a robust discussion from numerous interested stakeholders.”

What are the proposed changes?

OPSB summarizes the rule changes it adopted as follows:

  • Public information: Siting project applicants must host two public informational meetings for each standard certificate application. The first meeting will describe the scope of the project. The second meeting, held at least 90 days before an application filing, will focus on the specifics of the application. 
  • Site grading: Applicants must provide a preliminary grading plan that describes maximum graded acreage expectations.
  • Drainage and field tile: Applicants must describe and map field drainage systems and demonstrate how impacts to those systems will be avoided or mitigated, describe how damaged drainage systems including field tile mains and laterals will promptly be repaired to restore original drainage conditions and describe the data sources and methods used to obtain information for field drainage system mapping.
  • Vegetation management: Applicants must prevent the establishment and spread of noxious weeds within the project, including setback areas, during construction, operation, and decommissioning. Applicants must provide annual proof of weed control for the first four years of operation with the goal of weed eradication significantly completed by year three of operation.
  • Noise: Noise limits for renewable energy facilities cannot exceed the greater of 40 decibels (dBA) or the ambient daytime and nighttime average sound level by more than 5 dBA.
  • Surface water protection: Solar energy facility applicants must develop and implement a stormwater pollution prevention plan, a spill prevention control and countermeasure plan, and a horizontal directional drilling contingency plan, to minimize and prevent potential discharges to surface waters.
  • Fencing: Solar energy facility perimeter fencing must be small-wildlife permeable and aesthetically fitting for a rural location.
  • Setbacks: Solar energy facility panel modules must be setback at least 50 feet from non‑participating parcel boundaries, at least 300 feet from non-participating residences, and at least 150 feet from the edge of the pavement of any road within or adjacent to the project area.
  • Regulatory: Compliance monitoring and reporting requirements to ensure applicants meet the commitments and conditions contained in each OPSB certificate.

What happens next?

Parties have 30 days from the July 20 adoption date to file a request for a rehearing on OPSB’s decision to adopt the rules.  A rehearing request to OPSB must be based upon an argument that the rules are unreasonable or unlawful.  Absent a rehearing request, the OPSB will forward the rules package to JCARR, a committee consisting of five representatives and five senators from the Ohio legislature.  JCARR must hold a public hearing to hear comments on the rules between 31 and 45 days after receiving them, then must review the rules to ensure they don’t exceed OPSB’s authority, conflict with existing rules or legislative intent, and include analyses of fiscal and business impacts. The committee will next either approve the rules or recommend invalidation of some or all of the rules by the Ohio legislature, and both the House and Senate would have to pass resolutions to follow JCARR's invalidation recommendations.  If JCARR approves the rules, they’ll go into effect right away.

Follow the JCARR rules review process at https://www.jcarr.state.oh.us/.

Follow this link to read the OPSB Order adopting the rules, which contains the revised rules beginning on page 14.

The entire history of the rules revision is available in Case Record 21-0902-GE-BRO.

Statehouse lawn with row of Ohio flags
By: Peggy Kirk Hall, Thursday, June 22nd, 2023

Despite the arrival of summer and continuing disagreements over the state budget, Ohio legislators have been working on several pieces of legislation relevant to Ohio agriculture.  All of the proposals are at the committee level but may see action before the Senate and House after the budget bill process ends. Here’s a summary of the ag related proposals currently under consideration.

Senate Bill 111 – Urban Agriculture

Senator Paula Hicks-Hudson (D-Toledo) targets barriers for farmers in urban settings in SB 111, which has had three hearings before the Senate Agriculture and Natural Resources Committee. OSU Extension, the Ohio Municipal League, and several farmers have testified in support of the  proposal, which contains three components:

  • Establishes an Urban Farmer Youth Initiative Pilot Program to provide youth between the ages of six and eighteen living in urban areas with programming and support for farming and agriculture.  The bill would appropriate $250,000 over 2024 and 2025 for the pilot, to be administered by OSU Extension and Central State Extension.
  • Exempts temporary greenhouses, such as hoop houses, from the Ohio Building Code, consistent with Ohio law’s treatment of other agricultural buildings and structures. 
  • Codifies the Department of Taxation’s current treatment of separate smaller parcels of agricultural land under the same farming operation, which allows the acreages to be combined to meet the 10 acre eligibility requirement for Current Agricultural Use Valuation.

House Bill 64 – Eminent Domain

A proposal to make Ohio’s eminent domain laws more favorable to landowners remains on hold in the House Civil Justice Committee.  HB 64 is receiving more opposition than support, with dozens of parties testifying against it in its fourth hearing on May 23.  Read more about the proposal in our previous blog post.

House Bill 162 - Agriculture Appreciation Act

Rep. Roy Klopfenstein (R-Haviland) and Rep. Darrell Kick (R-Loudonville) introduced HB 162 on May 1 and the bill received quick and unanimous approval from the House Agriculture Committee on May 16.  The proposal would make several designations under Ohio law already recognized by federal law:

  • March 21 as "Agriculture Day."
  • October 12 as "Farmer's Day."
  • The week beginning on the Saturday before the last Saturday of February as "FFA Week."
  • The week ending with the second Saturday of March as "4-H Week."

House Bill 166 – Temporary Agricultural Workers

A bill addressing municipal income taxes for H2-A agricultural workers has met opposition in the House Ways and Means Committee.  HB 166, sponsored by Rep. Dick Stein (R-Norwalk) would subject foreign agricultural workers’ income to municipal income taxes.  The current municipal tax base in Ohio is based on federal tax laws that exclude foreign agricultural worker pay from Social Security and Medicare taxes since the workers cannot use those programs, and HB 166 would remove that exclusion and add H2-A income to the municipal tax base.  The bill would also require employers to withhold the taxes for the municipality of the workers’ residences. While municipal interests support the bill, Ohio Farm Bureau and other agricultural interests testified against it in its third hearing on June 13. Opponents argue that H2-A workers are not residents because they are “temporary,” that the proposal would have many potential adverse effects on how Ohio handles the H2-A program, and would hamper the ability of agricultural employers to use the H2-A program to hire employees.

House Bill 193 – Biosolid and biodigestion facilities  

Biosolid lagoons and biodigestion facilities would have new legal requirements and be subject to local regulation under a proposal sponsored by Rep. Kevin Miller (R-Newark) and Rep. Brian Lampton (R-Beavercreek).  HB 193 would grant county and township zoning authority over the lagoons and facilities, require a public meeting and county approval prior to seeking a facility permit from the Ohio EPA, require the Ohio EPA to develop rules requiring covers on new biosolid lagoons, and modify feedstock requirements for biodigestion facilities to qualify for Current Agricultural Use Valuation property tax assessment.  HB 193 had its first hearing before the House Agriculture Committee on June 13.

House Bill 197 – Community Solar Development   

A “community solar” proposal that did not make it through the last legislative session is back in a revised form.  HB 197 proposes to define and encourage the development of “community solar facilities,” smaller scale solar facilities that are directly connected to an electric distribution utility’s distribution system and that create electricity only for at least three “subscribers.”  The bill would establish incentives for placing such facilities on distressed sites and Appalachian region sites through a “Community Solar Pilot Program” and a “Solar Development Program.” Rep. James Hoops (R-Napoleon) and Sharon Ray (R-Wadsworth) introduced the bill on June 6, and it received its first hearing before the House Public Utilities Committee on June 21. “The goal of this legislation is to create a small-scale solar program that seeks to be a part of the solution to Ohio’s energy generation and aging infrastructure need,” stated sponsor Hoops.

House Bill 212 – Foreign ownership of property

Ohio joins a movement of states attempting to limit foreign ownership of property with the introduction of HB 212, the Ohio Property Protection Act.  Sponsored by Representatives Angela King (R-Celina) and Roy Klopfenstein (R-Haviland), the proposal would prohibit foreign adversaries and certain businesses from owning real property in Ohio. The bill was introduced in the House on June 13 and has not yet been referred to a committee for review.

 

By: Peggy Kirk Hall, Wednesday, May 17th, 2023

Do you want to learn more about Ohio solar energy development?  If so, consider dropping in on our upcoming webinar series, where my colleague Eric Romich and I will discuss trends, procedures, and legal issues in Ohio solar development. The five-part webinar series covers solar development from start to finish and will take place May 23, 24, 25, 30, and 31 from 9 to 10:30 a.m. The series includes the following sessions:

May 23:  Solar Development Overview and Trends

  • Ohio solar development, industry and technology trends, dual use of land for solar energy and agriculture, community and regulatory issues.

May 24: Leasing Land for Solar Development

  • Pre-leasing considerations, solar lease phases, common legal terms, and best management practices for leasing.

May 25: Connecting to the Electric Grid

  • Overview of the electric utility system, regulatory jurisdiction, and interconnection procedures and timelines.

May 30:  Solar Project Approval in Ohio

  • Solar project application procedures, state oversight, and new laws allowing county and township oversight of solar development.

May 31:  Construction and Post-Construction

  • The construction process, common issues, regulatory oversight, and decommissioning a project in the future

Registration and additional information about the free Zoom webinar series is available at go.osu.edu/solarwebinars.   Those unable to attend can view webinar recordings on the Farm Office energy law library at https://farmoffice.osu.edu/our-library/energy-law.

Grain bin on country road with sign opposing solar development
By: Peggy Kirk Hall, Friday, January 20th, 2023

The solar energy “boom” in Ohio continues to encounter opposition from local communities that would be home to large-scale solar developments.  Yesterday, the Ohio Power Siting Board (OPSB) denied a solar project application in Defiance County due to “general opposition by local citizens and governmental bodies.”  Just before the holidays, a project in Greene County met the same fate.  The cases now bring the number of solar project rejections in Ohio to three. Each one highlights the role community opposition can play in project denial, particularly when local governments are part of that opposition.  

How does OPSB review a proposed solar project?

The OPSB is responsible for reviewing applications for solar energy projects that are over 50 MW in capacity.  Currently, the members of the OPSB include the chair of the Public Utilities Commission of Ohio, directors of the EPA and departments of Agriculture, Development, Health, and Natural Resources, and a public member, along with four non-voting legislators.  In the future, a county commissioner and township trustee will also join in the OPSB review process.

Ohio law requires the OPSB to analyze eight criteria when reviewing an application and deciding whether to grant a certificate to construct a major utility facility.  The law states in Ohio Revised Code 4906.10(A) that OPSB shall not grant a certificate unless it finds and determines all of the following:

(1) The basis of the need for the facility if the facility is an electric transmission line or gas pipeline;

(2) The nature of the probable environmental impact;

(3) That the facility represents the minimum adverse environmental impact, considering the state of available technology and the nature and economics of the various alternatives, and other pertinent considerations;

(4) In the case of an electric transmission line or generating facility, that the facility is consistent with regional plans for expansion of the electric power grid of the electric systems serving this state and interconnected utility systems and that the facility will serve the interests of electric system economy and reliability;

(5) That the facility will comply with Chapters 3704., 3734., and 6111. of the Revised Code and all rules and standards adopted under those chapters and under section 4561.32 of the Revised Code. In determining whether the facility will comply with all rules and standards adopted under section 4561.32 of the Revised Code, the board shall consult with the office of aviation of the division of multi-modal planning and programs of the department of transportation under section 4561.341 of the Revised Code.

(6) That the facility will serve the public interest, convenience, and necessity;

(7) In addition to the provisions contained in divisions (A)(1) to (6) of this section and rules adopted under those divisions, what its impact will be on the viability as agricultural land of any land in an existing agricultural district established under Chapter 929 of the Revised Code that is located within the site and alternative site of the proposed major utility facility. Rules adopted to evaluate impact under division (A)(7) of this section shall not require the compilation, creation, submission, or production of any information, document, or other data pertaining to land not located within the site and alternative site.

(8) That the facility incorporates maximum feasible water conservation practices as determined by the board, considering available technology and the nature and economics of the various alternatives.

Once all required elements of an application for a certificate are submitted and the application is complete, which can take many months, the OPSB staff and board begins its evaluation of the application to decide whether to grant the certificate.  The review process, which might include intervening parties and multiple hearings, can last for many months or even a year or more.  During that time, the OPSB must examine the application to determine if it meets the criteria in ORC 4906.10(A), relying on the expertise and recommendations of OPSB technical staff. 

Recently approved solar projects

In December, the OPSB approved the application of Springwater Solar, a 155 MW solar project proposed to be built on 1,085 acres in Madison and Franklin counties, holding that the project met all of the criteria in ORC 4906.10(A).  The decision brings the total of approved solar projects in Ohio to 34, representing 6,175 MW to be built on 63,554 acres, as illustrated on the map below.  The map also displays additional pending applications totaling 3,139 MW and 29,076 acres.

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Source:  Ohio Power Siting Board, available at https://opsb.ohio.gov/about-us/resources/solar-farm-map-and-statistics.

Recently denied solar projects

Two solar project applications recently reviewed by OPSB did not receive a green light from the board.  In December, the OPSB denied an application by Kingwood Solar that proposed to construct a 175 MW solar facility on 1,200 acres in Greene County.   And on January 18, the OPSB denied a Cepheus Energy proposal to construct a 68 MW solar project on 649 acres in Defiance County.  Before those two rejections, the OPSB had only previously denied one solar project application—the Birch Solar application rejected last October.  In all three instances, the OPSB based its denial on ORC 4906.10(A)(6), stating that the projects would fail to serve the “public interest, convenience, and necessity” due to general opposition.

In the Cepheus application, the board focused on local public interaction and participation, reviewing public testimony and 600 pages of public comments on the project.  The board also noted that seven local governments had expressed concern or opposition to the project, including the Defiance Soil and Water Conservation District, Delaware and Sherwood Township trustees, Defiance County Economic Development Office, Defiance County Board of Commissioners, Delaware Township Fire Department, and Sherwood Area Economic Development Corporation.

The interests of these impacted local government bodies was “especially compelling” given that the organizations have the responsibility for preserving the health, safety, and welfare of their citizens, OPSB noted.  Stating that there was “general opposition from local citizens and governmental bodies” and that local impacts would outweigh the project’s benefits, the board concluded that the project would not serve the public interest, convenience, and necessity.

The Cepheus rejection is similar to the Kingwood Solar project denied by OPSB in December.  In that case, the board reviewed Kingwood’s assertions of the positive economic impacts and renewable energy choices the project would bring the community, then focused on local responses to the project.  About 76% of those testifying during a 6.5-hour hearing were opposed to the projects and expressed an overarching concern that the project was not compatible with local land use plans and would “unalterably change the rural nature of the community.”  The board also noted concerns by the Citizens for Greene Acres, a local group that intervened in the case, regarding the unique characteristics of the wildlife, parks, recreation, cultural, and historic areas that would be affected and the high density of residents that would reside within 500 feet of the project.

But once again, a critical concern for OPSB was the clear opposition of local governments impacted by the project.  Cedarville Township, Xenia Township, Miami Township, and the Greene County Commissioners had all intervened in the case and adopted resolutions opposing the project.  Although Kingwood Solar had agreed to address 39 conditions of development that it had offered in a Stipulation agreement, none of the local governments agreed to the Stipulation and instead opposed approval of the project.  OPSB concluded that local opposition, “especially as demonstrated by Greene County and the three townships affected by the project,” warranted a conclusion that the project would not serve the public interest, convenience, and necessity.

Now what happens?

It’s typical in a rejection of a utility application for the developer applicant to exercise the right to request a rehearing. That has already occurred for the Birch Solar and Kingwood Solar projects, and we can expect a rehearing request for the Cepheus denial that just occurred on January 19.  Interestingly, it was not just the solar developer that requested a rehearing of the Kingwood project application—Greene County, the affected townships, and the Citizens for Greene Acres also requested a rehearing.   While those parties stated support for the decision of the OPSB that denied the certificate, they argue that in its findings, OPSB failed to determine that there were many other grounds for denying the certificate such as incompatibility with local land use planning, incapacitation of 1,025 acres of productive farmland, and negative local economic impacts. 

Now we await the determinations by OPSB on the rehearing applications.  The projects are each on hold, and construction cannot move forward unless the OPSB reverses its decision and approves the applications. 

More questions

The recent decisions by OPSB leaves us asking a few questions.  Does three rejections establish a trend in solar project denials due to community opposition?  Did the communities involved in the 34 solar projects approved by OPSB oppose those projects?  Do the local communities in the projects that are still pending before the OPSB oppose or support the projects, and how will community voices affect the review of those projects?  While we don’t have the answers, we’ll keep monitoring developments in large-scale solar development as we consider these important questions.

Christmas ornament of Ohio capitol hanging on tree
By: Peggy Kirk Hall, Tuesday, December 20th, 2022

A new law giving local governments zoning authority over small-scale solar facilities may feel like a gift to counties and townships dealing with solar development conflicts.  The late amendment was one of a few surprises from the legislature as it wrapped up its lame duck session last week. 

Several other pieces of legislation affecting agriculture and natural resources that passed include local preemption of pesticides, loosening oil and gas drilling reviews on state lands, and new knowledge requirements for environmental health specialists that inspect retail food establishments. Here’s a summary of the agricultural related bills that now await the Governor’s action.

Zoning authority over small scale solar -- H.B. 501

An amendment to a township bill will grant counties, townships, and municipalities regulatory authority overthe location, erection, construction, reconstruction, change, alteration, maintenance, removal, use, or enlargement of any small solar facility, whether publicly or privately owned, or the use of land for that purpose.” The bill defines a “small solar facility” as one that has a single interconnection point to the grid and is under 50 MW. That number is important, because it addresses solar facilities that were not subject to S.B. 52, passed last year, which gave counties and townships new authority over wind and solar facilities that are over 50 MW. 

Agriculture – H.B. 507

This bill began as a simple provision reducing the number of poultry chicks that can be sold in lots from six to three.  Before it passed, however, the Senate Agriculture & Natural Resources Committee added six amendments, including these:

  • Local preemption of pesticides

Prohibits a political subdivision from regulating or banning the packaging, registration, labeling, sale, storage, distribution, use, or application of a pesticide registered with ODA on private property.

  • Environmental health specialists and food safety regulations

Requires ODA and ODH to adopt new rules for evaluating Environmental Health Specialists’ knowledge of food safety laws and to include the evaluations when assessing a board of health’s ability to license retail food establishments and food service operations.  Also revises several food safety laws to align them with state and federal laws.

  • Green energy in competitive retail energy laws

Defines “green energy” to be any energy that releases reduced air pollutants and cumulative air emissions or is more sustainable and reliable relative to some fossil fuels or is generated using natural gas, but excludes natural gas energy from renewable energy credits, except for gas from biologically derived methane.

  • Internet sales exemption from auction laws

Exempts from auctioneer and auction firm licensure requirements a person who, in any
calendar year, sells not more than $10,000 of personal property via an auction
mediation company (for example, eBay) if the company provides fraud protection to the buyer; and the property is the person’s own personal property, or the property is the personal property of another (sold without compensation).

  • Oil and gas drilling on state land

Requires a state agency to lease agency-owned oil and gas resources “in good faith” until new rules for nominating the development of resources are adopted by the Oil and Gas Land Management Commission.  The leasing party must demonstrate insurance and financial assurance and register with ODNR.

  • Towing authorizations for conservancy districts

 Authorizes a conservancy district police department to order the towing and storage of
a motor vehicle when the vehicle is an abandoned junk vehicle and when left on private or public property for a specified time.

Tax amnesty and appropriations – H.B. 66

H.B. 66 sets up the possibility of a tax amnesty program in 2023 and allocates $6 billion in one-time appropriations of COVID relief funds. And Medicaid draw down funds.

  • Tax amnesty

Allows a two-month tax amnesty program in 2023 for delinquent state taxes, local sales and use taxes, income tax withholding and more, but only if additional revenues from amnesty will be needed to meet General Revenue Fund obligations.

  • Ag-related appropriations

$4.5 million to Ohio Department of Agriculture for grants to county agricultural societies.

$250 million to Ohio Dept. of Development for water quality grants program.

Millions to Ohio Department of Natural Resources for state and local parks, and improvement, recreation, and conservation projects.

What proposals didn’t pass?

Since we’re at the end of the two-year session of the 134th General Assembly, any proposed legislation that did not pass is now dead.  Some of those proposals will be reintroduced next session, but we might never see others again.  The two most notable ag-related bills that died include:

Many solar developers were hoping this bill would pass, as it provides incentives for smaller scale subscription-based solar projects and solar projects on brownfield sites.  Landowners considering leases with solar developers who stated they were doing community solar projects must note that, because the bill did not pass, there is currently no legal authority to construct a community solar project in Ohio.

This proposal would have streamlined the process for landowners challenging compensation for property taken by eminent domain, increased the burden of proof by an agency using eminent domain, and expanded attorney fee and expense rewards for property owners.  It would also prohibit takings of property for recreational trails, an issue that has plagued northeast Ohio.  Sponsors say they will reintroduce next session.

What packages will the new year bring?

We’ll be keeping an eye on the new General Assembly, which will likely include new committee members and leadership on both the House Agriculture and Conservation and Senate Agriculture and Natural Resources Committee.  Our quick wish list for next session starts with:

  • Revisions to the agricultural and agritourism exemptions in county and township zoning law.
  • Mowing date and procedural revisions to the noxious weeds law
  • Updates and clarifications to the partition fence law
  • Streamlining and clarification of home-based and farm-raised food licenses

Follow the Ohio legislature at https://www.legislature.ohio.gov/.

 

Posted In: Food, Renewable Energy, Zoning
Tags: legislation
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Map of portion of Birch Solar 1 project at OPSB
By: Peggy Kirk Hall, Friday, October 28th, 2022

Highlighting a continuing trend in opposition to solar energy development across the state, the Ohio Power Siting Board has for the first time denied the application of a large-scale solar energy project.  After a string of 34 OPSB-approved projects since 2018, the Birch Solar 1 project became the board's first denial when the OPSB determined the project would not serve the public interest.  

The proposed project.  The Birch Solar application proposed a 300 MW facility in Allen and Auglaize counties with solar panels on 1,410 acres and a total project area of 2,345 acres.  Of the total, 2,132 acres are currently in agricultural use. The project would also include 22.5 miles of gravel access roads, an operations and maintenance building, underground and aboveground electric collection lines, meteorological towers, weather stations, inverters and transformers, a collector substation, a point of interconnection switchyard, and a 345-kilovolt generation interconnection electric transmission line. A six-foot cedar post perimeter fence would secure the project, evergreen fencing would limit impacts to neighboring viewsheds, and solar panels would be setback a minimum of 300 feet from adjacent non-participating residences and roadways.

OPSB’s review.  The OPSB had the duty of reviewing the project application to determine whether it satisfied the legal criteria in Ohio Revised Code 4906.10(A) for siting a major utility in Ohio.  For a solar project, the criteria includes parts (A)(2) through (8):

  1. The nature of the probable environmental impact;
  2. That the facility represents the minimum adverse environmental impact, considering the state of available technology and the nature and economics of the various alternatives, and other pertinent considerations;
  3. That the facility is consistent with regional plans for expansion of the electric power grid of the electric systems serving this state and interconnected utility systems and that the facility will serve the interests of electric system economy and reliability;
  4. That the facility will comply with Chapters 3704., 3734., and 6111. of the Revised Code and all rules and standards adopted under those chapters and under section 4561.32 of the Revised Code;
  5. That the facility will serve the public interest, convenience, and necessity;
  6. What its impact will be on the viability as agricultural land of any land in an existing agricultural district established under Chapter 929. of the Revised Code that is located within the site and alternative site;
  7. That the facility incorporates maximum feasible water conservation practices as determined by the board, considering available technology and the nature and economics of the various alternatives.

The “public interest” factor and public opposition.  OPSB focused most of its analysis of the Birch Solar application on part (A)(6), that the facility “will serve the public interest, convenience, and necessity.” The board explained that the question of whether an application serves the public interest “must be examined through a broad lens and in consideration of impacts, local and otherwise, from the Project.”  The OPSB acknowledged that there can be potential public benefits to a proposed solar facility such as energy generation, economic benefits from employment and tax revenues, air quality and climate improvements, protecting landowner rights, and preserving agricultural land use.  But the board stated that it must weigh a project’s benefits against its impacts, especially impacts to those living near it.  To do so, the board reviewed the application, evidence, and comments on Birch Solar and identified a primary concern:  uniform and consistent public opposition to the project. 

The two counties and four townships where Birch Solar would locate all opposed the project.  Acting under new legal authority granted by Ohio’s legislature last year, Auglaize County has restricted large-scale solar development in all incorporated parts of the county and Allen County has established most of the county as restricted from solar development.  The Birch Solar application is unaffected by the designations since it was in process and grandfathered in before the new law, but OPSB noted that had the new law been in place, the county restrictions would have prohibited the project. 

OPSB also reviewed evidence submitted by Allen County officials stating that there would be 1,278 residences, four schools, and six churches within one mile of Birch Solar’s project area, and that the residents shared concerns about the project’s lack of dedicated local power; its impact on land use, property values, drinking water, groundwater, drainage, and roadways; its decommissioning plan; and negotiations on distributing “payment in lieu of taxes” revenue to local governments.

Of the hundreds of public comments submitted on the Birch Solar application, OPSB determined that approximately 80% of the comments were in opposition to the project and that opposition reasons were similar to those raised by the local governments.  Birch Solar argued that it had agreed to 40 stipulated conditions that would address opposition concerns and had offered to make “good neighbor” payments of $10--$50,000 and property value adjustments to adjacent landowners.  Even so, the OPSB concluded that Birch Solar would not serve the public interest, convenience, and necessity requirement because of “unanimous and consistent opposition to the Project by the government entities whose constituents are impacted by the Project.”

What’s next?  The battle may not be over.  Birch Solar has the right to request a rehearing and reconsideration of its application within 30 days of the OPSB decision.  For now, the board’s denial of the project might invigorate opposition groups that have formed in areas where projects are proposed.  But note that on the same day OPSB denied Birch Solar, it approved Pleasant Prairie Solar in Franklin County, a 250 MW facility with a 2,400 acre project area and Harvey Solar, a 350 MW project of 2,630 acres in Licking County.   And 15 more projects totaling 3,266 MW are currently pending before the OPSB.  Whether local opposition will prohibit any of those projects is an issue we’ll be watching.

Read more about the Birch Solar project in the OPSB case docket at https://opsb.ohio.gov/cases/20-1605-el-bgn.

Solar panels iand corn growing in a field in Ohio
By: Peggy Kirk Hall, Wednesday, August 31st, 2022

Solar and wind energy development is thriving in Ohio, and most of that development will occur on leased farmland.  Programs in the newly enacted federal Inflation Reduction Act might amplify renewable energy development even more.  The decision to lease land for wind and solar development is an important one for a farmland owner, and one that remains with a farm for decades.  It’s also a very controversial issue in Ohio today, with farmers and community residents lining up on both sides of the controversy.  For these reasons, when a landowner receives a “letter of intent” for wind or solar energy development, we recommend taking a careful course of action.  Here are a few considerations that might help.

Purpose and legal effect of a letter of intent.  Typically, a letter of intent for renewable energy development purposes is not a binding contract, but it might be.  The purposes of the letter of intent are usually to provide initial information about a potential solar lease and confirm a landowner’s interest in discussing the possibility of a solar lease.  Unless there is compensation or a similar benefit provided to the landowner and the letter states that it’s a binding contract, signing a letter of intent wouldn’t have the legal effect of committing the landowner to a solar lease.  But the actual language in the letter of intent would determine its legal effect, and it is possible that the letter would offer a payment and contain terms that bind a landowner to a leasing situation.

Attorney review is critical.  To ensure a clear understanding of the legal effect and terms of the letter of intent, a landowner should review the letter with an attorney.  An attorney can explain the significance of terms in the letter, which might include an “exclusivity” provision preventing the landowner from negotiating with any other solar developer for a certain period of time, “confidentiality” terms that prohibit a landowner from sharing information about the letter with anyone other than professional advisors, “assignment” terms that allow the other party to assign the rights to another company, and initial details about the proposed project and lease such as location, timeline, and payments.  Working through the letter with an attorney won’t require a great deal of time or cost but will remove uncertainties about the legal effect and terms of the letter of intent.

Negotiating an Option and Lease would be the next steps. If a landowner signs a letter of intent, the next steps will be to negotiate an Option and a Lease.  It’s typical for a letter of intent to summarize the major terms the developer intends to include in the Option and Lease, which can provide a helpful “heads up” on location, payments and length of the lease.  As with the letter of intent, including an attorney in the review and negotiation of the Option and Lease is a necessary practice for a landowner.  We also recommend a full consideration of other issues at this point, such as the effect on the farmland, farm business, family, taxes, estate plans, other legal interests, and neighbor relations. Read more in our “Farmland Owner’s Guide to Solar Leasing” and “Farmland Owner’s Solar Leasing Checklist”.

New laws in Ohio might prohibit the development.  A new law effective in October of 2021 gives counties in Ohio new powers to restrict or reject wind and solar facilities that are 50 MW or more in size.  A county can designate “restricted areas” where large-scale developments cannot locate and can reject a specific project when it’s presented to the county. The new law also allows citizens to organize a referendum on a restricted area designation and submit the designation to a public vote. Smaller facilities under 5-MW are not subject to the new law.  Several counties have acted on their new authorities under the law in response to community concerns and opposition to wind and solar facilities.  Community opposition and whether a county has or will prohibit large-scale wind and solar development are additional factors landowners should make when considering a letter of intent.  Learn more about these new laws in our Energy Law Library.

It's okay to slow it down.  A common reaction to receiving a letter of intent is that the landowner must act quickly or could lose the opportunity.  Or perhaps the document itself states a deadline for responding.  A landowner shouldn’t let those fears prevent a thorough assessment of the letter of intent.  If an attorney can’t meet until after the deadline, for example, a landowner should consider contacting the development and advising that the letter is under review but meeting the deadline isn’t possible.  That’s a much preferred course of action to signing the letter without a review just to meet an actual or perceived deadline.

For more information about energy leases in Ohio, refer to our Energy Law Library on the Farm Office website at https://farmoffice.osu.edu/our-library/energy-law.

A group of ferrets laying next to each other.
By: Jeffrey K. Lewis, Esq., Thursday, December 30th, 2021

Did you know that a group of ferrets is called a business?  Ironically, we are in the business of ferreting out agricultural and resource law issues and providing you updates.  This edition of the Ag Law Harvest provides an update on recent court decisions from across the country that deal with the right to farm, food labeling, and conditional use permits for solar gardens. 

Right to Farm Act upheld in North Carolina.  Earlier this month, a three-judge panel on the North Carolina Court of Appeals upheld the constitutionality of North Carolina’s right to farm law.  In 1979, the North Carolina legislature enacted the Right to Farm Act (the “Act”).  In 2017 and 2018 the North Carolina legislature amended the Act by passing House Bill 467 and Senate Bill 711 (collectively referred to as “the Amendments”).  The Amendments sought to clarify and strengthen North Carolina’s right to farm law. The Plaintiffs argued that the Amendments violated North Carolina’s equivalent of the U.S. Constitution’s Fourteenth Amendment Due Process Clause and that the Act exceeded the scope of North Carolina’s police power.  The Court of Appeals disagreed.  The Court recognized North Carolina’s interest in promoting and preserving agriculture and that North Carolina has the authority to regulate such an interest. The Court found that the Act’s limitation on potential nuisance claims against those engaged in agriculture, forestry, and other related operations helps to protect North Carolina’s interest, and encourages North Carolina’s goal to encourage the availability and continued “production of food, fiber, and other products.”   The Plaintiffs also argued that the Amendments were “private laws” to specifically protect the swine industry in violation of North Carolina’s Constitution.  The Court found, however, that the Act and the Amendments are laws of general applicability that apply to all agricultural and forestry operations, not just swine producers.  Lastly, the Plaintiffs argued that because the language in House Bill 467 limited the amount of compensation that can be recovered in a nuisance action against agricultural and forestry operations, the Plaintiffs’ right to a trial by jury had been impaired and/or abolished.  The Court ruled, however, that North Carolina has the authority to “define the circumstances under which a remedy is legally cognizable and those under which it is not.”  The Court found that there are many examples where compensation and remedies are limited within North Carolina law and that House Bill 467 did not “impair nor abolish the right to a jury trial.” 

Where is the cacao?  A California man (“Plaintiff”) is suing Costco Wholesale Corporation (“Costco”) for allegedly mislabeling Costco’s “Chocolate Almond Dipped Vanilla Ice Cream Bars” (the “Product”).  Plaintiff argues that because of the Product’s packaging and name, he expected the Product’s chocolate would have been predominately derived from cacao beans.  Plaintiff asserts that chocolate is defined by the Food and Drug Administration (“FDA”) and California law “as prepared from ground roasted cacao bean” and that it must be “made chiefly from cacao beans with a small amount of optional ingredients.”  Based on this definition, Plaintiff claims that Costco’s packaging is misleading because the Product’s chocolate contains mostly vegetable oils and small amounts of ingredients derived from cacao beans.  In his Complaint, Plaintiff argues that federal regulations require Costco to label the Product as “milk chocolate and vegetable oil coating” rather than just “chocolate.”  However, the court found that neither of Plaintiff’s cited regulations support a viable theory of liability against Costco.  First, the court could not find Plaintiff’s definition of chocolate anywhere in the Code of Federal Regulations.  Secondly, the court held that there are no federal regulations that require a certain amount of cacao bean ingredients as opposed to vegetable oils to be used in “chocolate” and that there is no language mandating the labeling of Costco’s Product as “milk chocolate and vegetable oil coating almond dipped ice cream bars.” The court also dismissed Plaintiff’s claim that Costco engaged in consumer deception with its Product’s label.  The court found that a reasonable consumer would not have been deceived by the Product’s label and that if there were any questions about the ingredients of the Product, a consumer could have resolved those questions by looking for the ingredients list on the back of the Product’s packaging. 

Conditional use permits at the center of the Minnesota’s “solar system.”  Move over Sun because conditional use permits are at the center of attention in Minnesota, for now.  The Minnesota Court of Appeals has recently ruled against a county’s decision to deny two conditional use permits to build solar gardens in McLeod County, Minnesota.  Two subsidiary companies of Nokomis Energy LLC (“Plaintiff”) each applied for a conditional use permit (“CUP”) to build separate, one-megawatt solar energy facilities.  McLeod County considered the two CUP applications at public hearings.  Two neighboring landowners expressed concerns about stray voltage and the number of fetal deaths among their livestock.  The landowners claimed that the number of fetal deaths increased after other solar facilities were constructed nearby.  Plaintiff did not deny that solar gardens can produce stray voltage but proposed to alleviate those concerns by hiring only licensed professionals and to allow third-party oversight during construction.  Plaintiff also offered to conduct stray voltage testing before and after construction and indicated that it would accept any conditions set forth by county officials.  The county, however, denied both applications on the basis that the proposed sites are “prime farmland” and because the stray voltage would negatively affect livestock.  The court rejected the county’s assessment.  First, the court held that preserving prime farmland is not a sufficient legal basis for denying a CUP.  Second, the court ruled that the county cannot deny a CUP without first considering whether any proposed conditions would eliminate any concerns about the application.  Here, the court found that McLeod County’s failure to address Plaintiff’s proposals to eliminate the stray voltage concerns amounts to an unjust denial of Plaintiff’s CUPs.    

 

Thanks for reading and Happy New Year! 

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