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):
- The nature of the probable environmental impact;
- 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;
- 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;
- 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;
- That the facility will serve the public interest, convenience, and necessity;
- 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;
- 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.
The siting of renewable energy projects on Ohio farmland is a divisive issue these days, pitting neighbors against neighbors and farmers against farmers. Some support expanding renewable energy capacity while others oppose losing productive farmland or changing the rural landscape. A common question arising in this conflict is this: when can a county or township say “no” to a proposed renewable energy development? Several new laws, old laws, and recent court cases can help answer this question, although the answer is not always clear.
The “public utility exemption” from zoning. A long-standing provision of Ohio law that limits county and township land use power is the “public utility exemption” from zoning. Ohio Revised Code Sections 303.211(counties) and 519.211 (townships) specifically state that counties and townships have no zoning authority “in respect to the location, erection, construction, reconstruction, change, alteration, maintenance, removal, use, or enlargement of any buildings or structures of any public utilities.” The historical reason for this exemption is to keep local regulations from interfering with the provision of public utility services to Ohio residents. But what is a “public utility”? The exemption does not define the term, leaving Ohio courts to determine what is and is not a public utility on a case-by-case basis. More on that later.
New powers in Senate Bill 52. Effective in October of 2021, Senate Bill 52 gave new powers to county commissioners over certain renewable energy developments, setting aside the “public utility exemption” in those situations. The new law states that counties can designate restricted areas where wind and solar development is prohibited and can prohibit an individual proposed wind and solar facility or limit its size. These new powers, however, apply only to facilities with a single interconnection to the electrical grid and beyond a certain production size. For solar facilities, that size is 50 MW or more of energy production and for wind facilities, it’s 5 MW or more. Facilities that aren’t connected to the grid or are beneath those amounts are not subject to the new powers granted in S.B. 52. Additionally, facilities that had reached a certain point in the state approval process aren’t subject to the new law. Several Ohio counties have already established restricted areas or worked with townships to determine whether the county will approve individual projects as they come forward.
Authority over “small wind farms.” New wind power development in Ohio a decade ago led to the “small wind farm” provision in Ohio Revised Code Sections 303.213 (counties) and 519.213 (townships). This law allows counties and townships to use their zoning powers to regulate the location and construction of publicly and privately owned “small wind farms,” regardless of the public utility exemption. A “small wind farm” is any wind turbine that is not subject to Ohio Power Siting Board jurisdiction, meaning that it produces less than 5 MW of energy. Some counties and townships have utilized this provision of law to establish setback distances for wind turbines in residential areas.
The “bioenergy” exemptions. Yet another Ohio law limits county and township zoning authority over bioenergy facilities. Found in the “agricultural exemption from zoning” statute, Ohio Revised Code Sections 303.21(C) (counties) and 519.21(C) (townships) states that county and township zoning cannot prohibit the use of any land for biodiesel production, biomass energy production, electric or heat energy production, or biologically derived methane gas production if the facility is on land that qualifies as “land devoted exclusively to agricultural use” under Ohio’s Current Agricultural Use Valuation program and if, for biologically derived methane gas, the facility does not produce more than 5 MW or 17.06 million BTUs of energy. Ohio now has several facilities that fit within this exemption from zoning authority.
Two recent cases examine when a renewable energy facility a “public utility.” The “public utility exemption” from county and township zoning was at issue in two similar Ohio cases concerning biodigesters, facilities that process manure and other solid wastes into methane gas that is used to generate electricity. The most recent is Dovetail Energy v. Bath Township. The township claimed that the Dovetail biodigester located on farmland in Greene County was an “industrial use” that violated township zoning regulations. The owners argued that the biodigester was exempt from township zoning under both the “public utility” exemption and the “bioenergy” exemption.
The case reached the Second District Court of Appeals, which focused a large part of its analysis on the issue of whether the biodigester is a “public utility” that is exempt from township zoning under Ohio Revised Code 519.211. Relying on earlier cases from the Ohio Supreme Court, the court explained that an entity is a public utility if “the nature of its operation is a matter of public concern” and if “membership is indiscriminately and reasonably made available to the general public” as a public service.
The court analyzed the “public service” and “public concern” factors for the Dovetail biodigester, examining first whether Dovetail provides a public service, which requires a showing that the facility indiscriminately provides essential goods or services to the public, which has a legal right to demand or receive the goods or services, and that the goods or services can’t be arbitrarily withdrawn. Because Dovetail generates electricity that is sold into the wholesale energy market and used to provide energy to local utilities and customers and because Dovetail is also required to provide renewable energy credits that it cannot arbitrarily or unreasonable withdraw, the court concluded that the facility is a “public service.”
Factors determining whether Dovetail’s operation is also a matter of “public concern” that the court analyzed included whether Dovetail “serves such a substantial part of the public that its rates, charges and methods of operation become a public concern.” The court looked to Ohio’s incentives for renewable energy development, the lack of competition in the electric grid, the “heavy” regulatory environment for Dovetail, and its payment of public utility taxes as indications that Dovetail and the energy it produces are “public concerns.” Meeting both the “public service” and “public concern” components, the appeals court agreed with the lower court’s ruling that Dovetail is a public utility and is exempt from Bath Township zoning regulations.
The Dovetail decision echoes an earlier decision in the Fifth Appellate District, Westfield Township v. Emerald Bioenergy, where the appellate court examined a biodigester on farmland in Morrow County and found that the township could not regulate it because it is a “public utility.” The court cited factors such as Emerald’s provision of electric to the general public through interconnection agreements that distribute the energy to the energy grid, its lack of control over which customers receive or use the energy, its renewable energy credit requirements that can’t be arbitrarily or unreasonably withdrawn, its acceptance of waste from any customer, its governmental regulations and oversight, and its public utility taxes. The court also noted that it need not address the “bioenergy” exemption because it found the enterprise to be a “public utility.”
Both townships in the Dovetail Energy and Emerald Bioenergy cases requested a review of the decision by the Ohio Supreme Court. But the Supreme Court decided not to hear either case, although several of the justices dissented from that decision in each case. Without further review by the Supreme Court, the appellate court decisions stand.
What do these cases mean for solar energy facilities under 50 MW? Recall that S.B. 52 allows counties to prohibit or restrict solar facilities that are 50 MW or higher, but no other law addresses solar facilities with a single interconnection point to the energy grid that produce less than 50 MW. Would such a facility be a “public utility” under the public utility exemption? As with Dovetail and Emerald, a court would have to examine the solar facility and determine whether “the nature of its operation is a matter of public concern” and if “membership is indiscriminately and reasonably made available to the general public” as a public service. If so, a county or township could not use zoning to prohibit or regulate the location or construction of the solar facility.
Learn more about renewable energy laws in the Farm Office Energy Law Library at https://farmoffice.osu.edu/our-library/energy-law.
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!
Large-scale wind and solar energy development has generated both opportunity and conflict across Ohio in recent years. For several months, we monitored the progress of Senate Bill 52, a proposal intended to address community and landowner concerns about wind and solar facilities. This past Monday marked the effective date for Senate Bill 52, passed by the Ohio Legislature in June, and we've been busy developing new resources to help explain the laws that are now effective.
The legislation expands local involvement in the siting and approval of large-scale wind and solar facilities in several ways:
- County commissioners may designate “restricted areas” where such facilities may not locate.
- County citizens may petition for a referendum to approve or reject restricted area designations.
- Developers must hold a public meeting overviewing a proposed facility in the county where it would locate.
- County commissioners may prohibit or limit a proposed wind or solar facility after learning of it at the public meeting.
- County and township representatives must sit on the Ohio Power Siting Board committee that reviews facility applications.
The new laws also require wind and solar developers to submit decommissioning plans and performance bonds to address removal of a facility at the end of its lifetime.
Our two law bulletins and video series on Senate Bill 52 are now available. The resources work through each part of Senate Bill 52 and explain which types of facilities will be subject to the laws. You'll find the new resources in our energy law library on the Farm Office website at https://farmoffice.osu.edu/our-library/energy-law.
The Ohio General Assembly is off and running in its new session. Many bills that affect agriculture in Ohio are already on the move. Here’s a summary of those that are gaining the most momentum or attention.
Tax Conformity Bill – S.B. 18 and H.B. 48. The Senate has already passed its version of this bill, which conforms our state tax code with recent changes to the Internal Revenue Code made in the latest COVID-19 stimulus provisions of the Consolidated Appropriations Act. Both the Senate and the House will also exempt forgiven Paycheck Protection Program second-draw loan proceeds from the Commercial Activity Tax. The Senate version additionally exempts Bureau of Workers Compensation dividend rebates from the Commercial Activity Tax beginning in 2020, but the House bill does not. Both bills include “emergency” language that would make the provisions effective in time for 2020 tax returns.
Beginning farmers tax credits – H.B. 95. A slightly different version of this bill is returning after not passing in the last legislative session. The bi-partisan bill aims to assist beginning farmers through several temporary income tax credits:
- Businesses that sell or rent agricultural assets such as land, animals, facilities or equipment to certified beginning farmers can receive a 5% income tax credit for sales, a 10% of gross rental income credit for cash rents, and 15% of gross rental income for share rents.
- Certified beginning farmers can receive an income tax credit equal to the cost of participating in a certified financial management program.
Beginning farmers, among other requirements, are those in or seeking entry into farming in Ohio within the last ten years who are not a partner, member or shareholder with the owner of the agricultural assets and who have a net worth of less than $800,000 in 2021, which adjusts for inflation in subsequent years. Beginning farmers must be certified by the Ohio Department of Agriculture or a land grant institution. The House Agriculture and Conservation Committee will discuss the bill at its meeting on February 16.
Wind and solar facilities – S.B. 52. In addition to revising setback and safety specifications for wind turbines, this proposal would amend Ohio township zoning law to establish a referendum process for large wind and solar facility certificates. The bill would require a person applying for a certificate for a large wind or solar facility to notify the township trustees and share details of the proposed facility. That notification sets up opportunities for the township trustees or residents of the township to object to the application and submit the proposed application to a vote of township residents. A certificate would not take effect unless approved by a majority of the voters. A first hearing on S.B. 52 will be held on Tuesday, February 16 before the Senate Energy and Public Utilities Committee.
Grants for broadband services – H.B. 2 and S.B. 8. The Senate passed its version of this bill last week, which sets up a $20 million competitive grant program for broadband providers to extend broadband services throughout the state. The proposal would also allow broadband providers to use electric cooperative easements and poles, subject to procedures and restrictions. The bill had its second hearing before the House Finance Committee last week.
Eminent domain – H.B. 63. Based on a similar bill that didn’t pass last session, this bill changes eminent domain law in regard to property taken for the use of recreational trails, which include public trails used for hiking, bicycling, horseback riding, ski touring, canoeing and other non-motorized recreational travel. H.B. 63 would allow a landowner to submit a written request asking a municipality or township to veto the use of eminent domain for a recreational trail within its borders. The bill would also allow a landowner to object to a use of eminent domain for any purpose at any time prior to a court order for the taking, rather than limiting that time period to ten days as in current law. The bill had its first hearing before the House Civil Justice Committee last week.
Minimum wage increases. S. B. 51 and H.B. 69. Bills on each side of the General Assembly propose gradually increasing the state minimum wage to $15, but have different paths for reaching that amount. S.B. 51 proposes increasing the wage to $12/hour in 2022, followed by $1/hour increases each year and reaching $15 by 2025, which is when a federal bill proposes to establish the $15 minimum wage. H.B. 69 begins at $10/hour in 2022 with $1/hour increases annually, reaching $15 in 2027. S.B. 51 was referred last week to the Workforce and Higher Education Committee and H.B. 69 was referred to the Commerce and Labor Committee.