Argued: May 2, 2019
Circuit Court for Washington County Case No.: 21-C-15-055848
Barbera, C.J. [*] Greene, McDonald, Watts, Hotten,
Getty, Booth, JJ.
OPINION
Booth,
J.
"Here
comes the sun, and I say, It's all right."
-The
Beatles, "Here Comes the Sun"
This
case involves the intersection of the State's efforts to
promote solar electric generation as part of its renewable
energy policies, and local governments' interest in
ensuring compliance with local planning and zoning
prerogatives. In this matter, we are asked to determine
whether state law preempts local zoning authority with
respect to solar energy generating systems that require a
Certificate of Public Convenience and Necessity
("CPCN") issued by the Maryland Public Service
Commission.
This
case began with an application by Perennial Solar, LLC
("Perennial") to the Washington County Board of
Zoning Appeals ("Board") for a special exception
and variance to construct a Solar Energy Generating System
("SEGS") adjacent to the rural village of Cearfoss
in Washington County, Maryland. After the Board granted the
variance and special exception, a group of aggrieved
landowners sought judicial review of the Board's decision
in the Circuit Court for Washington County. The Board of
County Commissioners of Washington County, Maryland
("Washington County" or "the County")
intervened in the case.
While
the petition for judicial review was pending, Perennial filed
a motion for pre-appeal determination challenging the subject
matter jurisdiction of the Circuit Court for Washington
County on the ground of state law preemption by implication.
Prior to considering the merits of the Board's decision,
a hearing was held on Perennial's motion. The circuit
court granted the motion and determined that Maryland Code,
§ 7-207 of the Public Utilities Article ("PU")
preempts the Washington County Zoning Ordinance and that the
Public Service Commission ("PSC") has exclusive
jurisdiction to approve the type of SEGS proposed by
Perennial. Washington County appealed the case to the Court
of Special Appeals. In a reported opinion, the intermediate
appellate court affirmed the judgment of the circuit court.
Bd. of Cty. Comm'rs of Washington Cty., et al. v.
Perennial Solar, LLC, 239 Md.App. 380 (2018).
Washington
County petitioned this Court for a writ of certiorari. We
granted certiorari to consider the following
question:[1]
Does state law preempt local zoning authority with respect to
solar energy generating systems that require a Certificate of
Public Convenience and Necessity issued by the Maryland
Public Service Commission?
For the
reasons set forth herein, we answer in the affirmative and
affirm the judgment of the Court of Special Appeals.
I.
FACTUAL AND PROCEDURAL BACKGROUND
Perennial
filed an application in September of 2015 with the Board for
a special exception and variance[2] to construct a
SEGS[3]
on two contiguous farms totaling 86 acres. The farms are
adjacent to Cearfoss, a community designated as a Rural
Village[4] in the Washington County Comprehensive
Plan. The proposed site is located in the Agricultural-Rural
("AR") zoning district[5] in the Washington County
Zoning Ordinance ("Zoning Ordinance"). The Zoning
Ordinance permits SEGS as a land use in the AR zoning
district by special exception. Perennial's SEGS is
designed to produce ten megawatts of electricity, all of
which is to be sold and transferred offsite to a wholesale
electricity market. The electricity generated by the SEGS
would be enough to power 2, 100 homes.
The
Board held a public hearing on Perennial's application in
October of 2015. Testimony was given by witnesses in favor of
and in opposition to Perennial's
application.[6]The Board also accepted written evidence
from both sides relating to the application.
After
considering the matter for two weeks, the Board met,
deliberated, and granted the request for a special exception
and a variance.[7] The Board issued a written opinion in
November of 2015 in which it determined, among other things,
that the intended use conforms to the Washington County
Comprehensive Plan and is compatible with the existing
neighborhood. The Board found that the site is not located
within a Priority Preservation Area, a Rural Legacy Area, or
within the Antietam Overlay Zone, which are all areas where
SEGS are prohibited under the Washington County Zoning
Ordinance. After describing the evidence and testimony, the
Board concluded that there was no probative evidence showing
that the SEGS would have any greater adverse effects above
and beyond those inherently associated with the special
exception use irrespective of its location within the zone.
The Board granted the variance from the minimum setback to
allow the SEGS to be built over the common property line
separating the two contiguous parcels, finding that strict
compliance with the setback requirements would cause
practical difficulty for the project and that a variance to a
zero-foot setback would not cause any harm to public safety
or welfare.
A group
of aggrieved landowners sought judicial review of the
Board's decision in the Circuit Court for Washington
County. Washington County intervened in the case. While the
petition for judicial review was pending, Perennial filed a
motion for pre-appeal determination challenging the circuit
court's subject matter jurisdiction on the ground of
state law preemption by implication. Perennial argued that
under PU § 7-207, the PSC has exclusive jurisdiction for
approval of the proposed SEGS, including site location.
Washington County and the aggrieved landowners opposed the
motion, arguing that the legislative intent reveals that
local regulation of SEGS, and particularly, their location,
is not preempted by state law.
After a
hearing, the circuit court granted Perennial's motion,
holding that local zoning authority is preempted by PU §
7-207. The circuit court dismissed the petition for judicial
review and remanded the matter to the Board with instructions
to vacate its opinion and the grant of a special exception
and variance. Washington County and the aggrieved landowners
appealed the decision of the circuit court to the Court of
Special Appeals. In a reported opinion, the intermediate
appellate court applied Maryland case law outlining the
applicable factors when considering the doctrine of implied
preemption. Perennial Solar, 239 Md.App. 380. The
Court of Special Appeals noted that "preemption by
implication occurs when a local law 'deals with an area
in which the [General Assembly] has acted with such force
that an intent by the State to occupy the entire field must
be implied.'" Id. at 386 (quoting
Talbot Cty. v. Skipper, 329 Md. 481, 488 (1993)).
The Court stated that when undertaking a preemption analysis,
its "inquiry is focused on 'whether the General
Assembly has manifested a purpose to occupy exclusively a
particular field.'" Id. (quoting East
Star, LLC v. Cty. Comm'rs of Queen Anne's Cty.,
203 Md.App. 477, 485 (2012)).
After
reviewing the comprehensive statutory scheme associated with
the PSC's review and approval process for generating
stations, including the broad authority conferred by the
General Assembly upon the PSC, the Court of Special Appeals
held as follows:
Based on the comprehensiveness of [PU] § 7-207, local
zoning regulations and comprehensive plans are impliedly
preempted by state law for SEGSs requiring a CPCN. The
statute grants the PSC broad authority to determine whether
and where the SEGS may be constructed and operated. It is
even more evident that the Legislature intended to have the
state govern SEGS approval by requiring local government
input into the state's final decision.
Perennial Solar, 239 Md.App. at 390. The
intermediate appellate court noted that this Court reached
the same conclusion in Howard County v. Potomac Electric
Power Co., 319 Md. 511 (1990). The Court of Special
Appeals concluded its analysis in Perennial Solar by
stating that "following the logic of the Court of
Appeals in Howard County . . . and the legislative
intent discussed supra, we hold that the PSC
preempts, by implication, local zoning regulation and thus
affirm the circuit court."[8] Perennial Solar, 239
Md.App. at 392. For the reasons set forth herein, we affirm
the judgment of the Court of Special Appeals.
II.
STANDARD OF REVIEW
This
case involves a purely legal issue-whether PU § 7-207,
which grants the PSC general regulatory powers over
generating stations, including SEGS, preempts local zoning
authority with respect to the location and construction of
SEGS. As this determination involves a question of law, our
standard of review is de novo. See Koste v. Town
of Oxford, 431 Md. 14, 25 (2013) ("When an issue
involves an interpretation and application of a Maryland
constitutional, statutory or case law, an appellate court
must determine whether the trial court's conclusions are
legally correct under a de novo standard of
review.") (internal citations omitted); see also
Schisler v. State, 394 Md. 519, 535 (2006).
III.
PARTIES' CONTENTIONS[9]
Perennial's
contention is that the PSC's regulatory authority
established by the Public Utilities Article over the siting
and construction of SEGS preempts local zoning approval by
implication. Perennial argues that the General Assembly has
given the PSC broad authority to take final action to
determine the siting of SEGS which require a certificate of
public convenience and necessity, and that the comprehensive
nature of the statute indicates the Legislature's intent
to occupy the entire field. In support of its position that
PU § 7-207 preempts local zoning ordinances in the
context of site selection and approval of SEGS, Perennial
relies upon Howard County v. Potomac Electric Power
Co., et al., 319 Md. 511 (1990), in which this
Court held that Article 78, § 54A-the same statute at
issue in this case[10]-preempted by implication county zoning
ordinances regulating the location and construction of
overhead transmission lines in excess of 69, 000 volts.
As
additional support for its preemption argument, Perennial
contends that recent legislative amendments to PU §
7-207 enacted by the General Assembly in 2017 reinforce the
Legislature's intent that local governments have an
advisory role in the CPCN process, but that the PSC has the
ultimate decision-making authority. Perennial further argues
that the General Assembly's recent rejection of
alternative proposed amendments to PU § 7-207, which
would have required that an applicant receive zoning approval
from a local government prior to the PSC issuing a CPCN,
reinforces the General Assembly's intent to preempt local
zoning authority.
Washington
County argues that the express power granted by the General
Assembly to local and municipal zoning authorities to
implement planning and zoning controls has not been expressly
or impliedly preempted by state law with respect to the
approval and location of SEGS. The County relies upon
Ad Soil, Inc. v. County Commissioners of Queen
Anne's County, 307 Md. 307 (1986), contending that
Ad Soil stands for the proposition that the
doctrine of preemption does not allow for preemption in part.
Because the General Assembly has prescribed a role for local
government in the CPCN process under PU § 7-207,
including the consideration of local planning and zoning, the
County argues that the General Assembly has not evidenced an
unequivocal intent to preempt the "entire field" or
to preclude local legislative bodies from enacting any
ordinances and laws pertaining to the location of SEGS in
their respective jurisdictions.
The
County attempts to distinguish Howard County on the
basis that: (1) the case dealt with the siting and
construction of a 500, 000 volt transmission line extending
for 10.5 miles through two counties, thus differing in scope,
size, coverage area, environmental impact, and purpose; (2)
under the facts of Howard County, PEPCO applied for
and received a CPCN well in advance of the county special
exception approval processes in the respective jurisdictions;
and (3) unlike the Washington County Zoning Ordinance, which
permits SEGS by special exception and incorporates compliance
with PSC regulations by express reference, the county
ordinances at issue in Howard County purported to
vest extensive authority in the local zoning boards over the
construction of overhead transmission lines exceeding 69, 000
volts, to the potential impediment of the PSC's discharge
of its statutory authority.
Finally,
the County argues that the 2017 legislative amendments to PU
§7-207, as well as the PSC's own regulations,
support the County's position that local zoning
ordinances are not preempted by the statutory CPCN
application and approval process.
IV.
DISCUSSION
This
Court has frequently explained that Maryland state law may
preempt local law in one of three ways: (1) preemption by
conflict; (2) express preemption; or (3) implied preemption.
Altadis U.S.A., Inc. v. Prince George's Cty.,
431 Md. 307, 311 (2013); Talbot Cty. v. Skipper, 329
Md. 481, 487-488 (1993); Allied Vending, Inc. v. City of
Bowie, 332 Md. 279, 297-298 (1993).
Perennial
argues that the local zoning ordinances are preempted by
implication. State law can preempt local ordinances by
implication when "the ordinance deals with an area in
which the General Assembly has acted with such force that an
intent to occupy the entire field must be implied."
Howard Cty., 319 Md. at 522 (cleaned up) (quoting
Bd. of Child Care, et al. v. Harker, et al., 316 Md.
683, 697 (1989)); see also Talbot Cty. v. Skipper,
329 Md. at 488.
There
is no particular formula for determining whether the General
Assembly intended to preempt an entire area. Howard
Cty., 319 Md. at 523. Nevertheless, we have stated
repeatedly that "[t]he primary indicia of legislative
purpose to preempt an entire field of law is the
comprehensiveness with which the General Assembly has
legislated in the field." Id. (quoting Bd.
v. Harker, 316 Md. at 696-697); see also
Altadis, 431 Md. at 316 (holding that state law
comprehensively regulated the packaging, sale, and
distribution of tobacco products, and thus, preempts county
ordinances regulating the packaging of cigars);
Skipper, 329 Md. at 489, 492 (holding that state
comprehensive legislation regulating virtually all aspects of
sewage sludge utilization was "strongly indicative of
the legislative intent to preempt this entire field from
local regulation"); Allied Vending, 332 Md. at
310 (holding that the "General Assembly has manifested
an intent for the State to completely occupy the field of the
sale of cigarettes through vending machines rendering any
local or municipal ordinances in this area constitutionally
invalid").
In
addition to reviewing the comprehensiveness of the
legislation that is the subject of the preemption analysis,
in Allied Vending, we summarized the secondary
factors in which the Court has previously considered in
determining whether a local law is preempted by implication:
1) whether local laws existed prior to the enactment of state
laws governing the same subject matter, 2) whether the state
laws provide for pervasive administrative regulation, 3)
whether the local ordinance regulates an area in which some
local control has traditionally been allowed, 4) whether the
state law expressly provides concurrent legislative authority
to local jurisdictions or requires compliance with local
ordinances, 5) whether a state agency responsible for
administering and enforcing the state law has recognized
local authority to act in the field, 6) whether the
particular aspect of the field sought to be regulated by
local government has been addressed by state legislation, and
7) whether a two-tiered regulatory process existing if local
laws were not preempted would engender chaos and confusion.
Allied Vending, 332 Md. at 299-300 (internal
citations omitted).
With
the principles of implied preemption in mind, we turn to the
language of the Public Utilities Article and consider the
duties and authority delegated to the PSC by the General
Assembly in the area of solar energy generating station
approvals.
A.
Statutory Framework of the Public Utilities Article
In
response to the growing concern over climate change, the
Maryland General Assembly enacted legislation intended to
reduce Maryland greenhouse gas emissions. The legislation
included a specific intent to move the Maryland energy market
away from historical reliance on fossil fuels and enacted a
Renewable Energy Portfolio Standard
("RPS")[11]. See Maryland Code, Environment
Article ("EN") § 2-1201, et seq.; PU
§ 7-701.
The RPS
statute, PU § 7-701, et seq., was originally
enacted in 2004 to facilitate the State's transition to
renewable energy sources. The objective of the RPS statute is
to recognize and develop the benefits associated with a
diverse collection of renewable energy supplies to serve
Maryland. As part of its enactment, the General Assembly
specifically determined that: "the benefits of
electricity from renewable energy resources, including long
term decreased emissions, a healthier environment, increased
energy security, and decreased reliance on and vulnerability
from imported energy sources, accrue to the public at
large;" and that the State needed to "develop a
minimum level of these resources in the electricity supply
portfolio of the State." PU § 7-702(b). The RPS
includes specific targets for the share of electricity coming
from solar electric generation. PU § 7-703.
In
2009, the Maryland General Assembly enacted the Greenhouse
Gas Emissions Reduction Act of 2009 ("GRRA"), a law
that requires the State to reduce greenhouse gas emissions
from a 2006 baseline by 25% by 2020 and by 40% by 2030. EN
§§ 2-1204, 2-1204.1; PU § 7-701, et
seq. During the 2019 legislative session, the General
Assembly adopted the Clean Energy Jobs Act, which increases
the State's RPS target to 50% by 2030. Senate Bill
(“S.B.”) 516, 2019 Reg. Sess. (cross-filed as
H.B. 1158). The Clean Energy Jobs Act also includes a
significant increase in electricity sales derived from solar
energy from 1.9% to 5.5% in 2019, and to 14.5% in 2028.
Id.
The
General Assembly has delegated to the PSC[12] the authority
to "implement a renewable energy portfolio
standard" that applies to retail electricity sales in
the State by electricity suppliers consistent with the
specific timetable established by the statute. PU §
7-703(a). On an annual basis, the PSC is required to report
to the General Assembly on the status of the implementation
of the RPS program, including the availability of Tier 1
renewable sources such as solar energy. PU § 7-712.
Consistent
with the PSC's duties to ensure compliance with the RPS,
including the specific targets for the share of electricity
coming from solar electric generation, the General Assembly
has also delegated to the PSC the exclusive authority to
approve generating stations[13] in Maryland. Unless exempt by
the statute, [14] a generating station cannot be
constructed unless the PSC issues a CPCN, which is only
issued after a detailed application and approval process. PU
§ 7-207.
The
PSC's review process of a generating station is
extensive. Upon receipt of an application, the PSC provides
notice of the application to: (i) the Maryland Department of
Planning; (ii) the governing body, and if applicable, the
executive of each county or municipal corporation in which a
portion of the generating station is proposed to be
constructed; (iii) the governing body of any county or
municipal corporation within one-mile of the proposed
location of the generating station; (iv) each member of the
General Assembly representing any part of the county in which
any portion of the generating station is proposed to be
constructed; (v) each member of the General Assembly
representing any portion of each county within one-mile of
the proposed location of the generating station; and (vi) all
other interested persons. PU § 7-207(c)(1). A copy of
the application is also provided to each appropriate State
unit and unit of local government for review, evaluation, and
comment regarding the significance of the proposal to the
State, area wide, and local plans or programs (see
PU § 7-207(c)(2)), and to each member of the General
Assembly who is provided with the statutory notice pursuant
to PU § 7-207(c)(1). Id.
The
statute requires that the PSC coordinate with and include the
local governing body of the county or municipality in the
CPCN public hearing process, and establishes a public hearing
framework designed to ensure input and public comment from
interested persons in the geographic area within which the
generating station is being proposed:
(d) Public hearing. - (1) The Commission shall
provide an opportunity for public comment and hold a public
hearing on the application for a certificate of public
convenience and necessity in each county and municipal
corporation in which any portion of the construction of a
generating station . . . is proposed to be located.
(2) The Commission shall hold the public hearing jointly with
the governing body of the county or municipal corporation in
which any portion of the construction of the generating
station . . . is proposed to be located, unless the governing
body declines to participate in the hearing.
(3)(i) Once in each of the 4 successive weeks immediately
before the hearing date, the Commission shall provide weekly
notice of the public hearing and an opportunity for public
comment:
1. by advertisement in a newspaper of general circulation in
the county or municipal corporation affected by the
application;
2. on two types of social media; and
3. on the Commission's website.
(ii) Before a public hearing, the Commission shall coordinate
with the governing body of the county or municipal
corporation in which any portion of the construction of the
generating station . . . is proposed to be located to
identify additional options for providing, in an efficient
and cost effective manner, notice of the public hearing
through ...