Relating to Real Estate

In Board of County Comm’rs of Washington County v. Perennial Solar, LLC, 239 Md. App. 380 (2018), the Court of Special Appeals (CSA) held that the Maryland Public Service Commission (PSC) process for granting a Certificate of Public Convenience and Necessity (CPCN) for potential solar farms preempts local zoning regulation.

Perennial Solar, LLC applied for a special exception and zoning variance to construct a 10-megawatt solar generating facility in Washington County, MD. After the Washington County Board of Zoning Appeals granted the application, Perennial filed an application for a CPCN with the PSC. Neighboring landowners opposed to the project appealed the grant of the special exception to the Circuit Court for Washington County.

Before a hearing in the circuit court, Perennial raised the issue of subject matter jurisdiction, arguing that the PSC had exclusive jurisdiction over the siting of the facility now that the CPCN application had been filed. The circuit court agreed that the PSC had exclusive jurisdiction and dismissed the case.

The CSA affirmed, holding that State law governing the CPCN process impliedly preempts local zoning regulation. The court held that the comprehensiveness of the PSC’s laws governing the siting of electric generating stations and transmission lines indicated the General Assembly’s intent to preempt the entire field. In addition, the PSC’s statutory obligations to give notice to local governing bodies and to give “due consideration” to the local government’s recommendations indicate that the recommendations are advisory only and not controlling.

The CSA also rejected the appellants’ argument that the PSC only regulates “public service companies,” defined as common carriers, electric companies, gas companies, sewage disposal companies, telegraph companies, telephone companies, water companies or any combination thereof. However, under Maryland Code, Public Utility Article (PUA) §7‑207(b)(1)(i), a “person” may not construct an electric generating station until that person obtains a CPCN. In this case Perennial qualified as a “person” and was not required to be a “public service company” to apply for a CPCN.

The Perennial case was originally issued in August 2018 as an unreported opinion. Upon request, the CSA re-issued the decision as a reported opinion on November 15, 2018, which enables Perennial to be cited as precedent in other cases. On February 4, 2019, the Court of Appeals granted a writ of certiorari in the case. Oral argument has not yet been scheduled.

Commentary: The court’s decision was legally correct: the PSC must consider, but is not bound by, the local jurisdiction’s recommendation and zoning.

We note that as of October 1, 2017, the General Assembly added two factors to which the PSC must give “due consideration” in its evaluation of potential generating stations in CPCN proceedings: 

• The project’s consistency with the local  comprehensive plan and zoning; and
• The applicant’s efforts to resolve any issues presented by a local jurisdiction. PUA §7‑207(e)(3).

These additional factors were not considered in either court’s decision; nonetheless, we do not believe they effected any substantive change in the law or would in any way change the outcome in Perennial. It is clear that in enacting the new factors, the General Assembly intended to maintain PSC preemption over local zoning, while codifying the PCS’s consideration of local concerns.

The General Assembly specifically considered and rejected language that would have required consistency with a county comprehensive plan. As originally introduced, House Bill 1350/Senate Bill 851 (2017), which created PUA §7‑207(e)(3), contained a provision specifying that “[i]f any unit of local government determines that an application is not consistent with the jurisdiction’s comprehensive plan …, the Commission may not issue” a CPCN. The General Assembly removed this provision, and instead kept the “due consideration” language presently in PUA §7‑207(e). Consistency with local zoning, the comprehensive plan, and efforts to resolve concerns are merely factors for the PSC to weigh, along with all the factors under PUA §7‑207(e), as it exercises its sole authority over power plant siting in Maryland.

For questions, contact David W. Beugelmans.

David W. Beugelmans
410-576-4104 • dbeugelmans@gfrlaw.com