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In re Petition of Lk Holdings, LLC

Supreme Court of Vermont

October 12, 2018

In re Petition of LK Holdings, LLC

          On Appeal from Public Utility Commission James Volz, Chair

          Gerald R. Tarrant and Ryan P. Kane of Tarrant, Gillies & Richards, Montpelier, for Appellant.

          Stephanie B. Hoffman, Special Counsel, Montpelier, for Appellee Public Service Department.

          Cindy Ellen Hill of Hill Attorney PLLC, Middlebury, for Intervenor/Appellee Matthew Daniels, and Adam Lougee, Middlebury, for Intervenor/Appellees Town of Whiting and Addison County Reginal Planning Commission.

          PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

          SKOGLUND, J.

         ¶ 1. Applicant LK Holdings LLC appeals the Public Utility Commission's dismissal of its application for a certificate of public good for a proposed group net-metered photovoltaic electric power system.[1] The Commission dismissed the petition as incomplete because applicant failed to provide notice to adjoining landowners that its application had been filed. We affirm.

         I. Facts

         ¶ 2. On June 16, 2016, applicant notified state, regional, and municipal entities as well as adjoining landowners of its intent to seek a certificate of public good (CPG) to construct and operate a 500-kilowatt solar photovoltaic group net-metered system[2] in Whiting, Vermont. On December 9, 2016, applicant filed its CPG application with the Commission. The application certified that notice of the filing had been provided to adjoining landowners as required by Commission rule. See Regulations Pertaining to Construction and Operation of Net Metering Systems § 5.110(C) [hereinafter Former Rule 5.100], doc_library/5100-PUC-nm-adopted-2013_0.pdf [] (requiring that upon filing of CPG application, applicant must notify state and local authorities and "shall also provide notice to . . . the landowners of record of property adjoining the project site(s) that the application has been filed with the Commission"). However, applicant did not actually provide notice of the filing to any of the adjoining landowners at that time.

         ¶ 3. In a December 16, 2016 memorandum, the Commission directed applicant to submit information concerning the project's compliance with any municipal bylaws or ordinances that contained screening requirements "to complete its application for the [Commission's] review." The Commission stated that it would begin its review of the project upon receipt of the requested information and indicated that any comments on the application were due no later than twenty-one days after the requested information was filed. The Commission sent its memorandum to all interested persons and entities on the service list for the docket, including the adjoining landowners.

         ¶ 4. Applicant filed the requested supplemental information on December 23, 2016. Over the next several weeks, the Division for Historic Preservation, the Agency of Natural Resources, and the Department of Public Service filed comments regarding the application, and the Addison County Regional Planning Commission and the Town of Whiting moved to intervene and requested a hearing on orderly development and aesthetics. In its letter to the Commission, the Department noted that two appendices-maps and a photographic inventory-were missing from the application, and asserted that such information was necessary for the Department to complete its review.

         ¶ 5. On January 18, 2017, applicant filed a copy of its notice to adjoining landowners that its CPG application had been filed. The notice is dated January 16, 2017; however, applicant states in its brief that the notice was actually sent the following day. Applicant also filed the missing appendices on January 18.

         ¶ 6. Adjoining landowner Matthew Daniels filed a motion to intervene on January 24, 2017. Three days later, Daniels, the Addison County Regional Planning Commission, and the Town of Whiting filed a joint motion to dismiss the CPG application as incomplete because applicant had failed to notify adjoining landowners and because the application was missing critical information regarding orderly development and aesthetics.[3]

         ¶ 7. After soliciting comments from applicant and other parties regarding the motions, the Commission granted the motion to dismiss on May 22, 2017. It ruled that the notice to landowners and certification of such notice were a necessary part of a complete application, and that applicant did not satisfy these requirements until January 18, 2017. It rejected applicant's argument that the Commission's December 16, 2016 memorandum cured the lack of notice because the rule placed the onus on the applicant to notify the landowners and the December 16 memorandum did not give notice of a complete application. The Commission therefore dismissed the application without prejudice to refiling under the revised net-metering rule that took effect on January 1, 2017.

         ¶ 8. Applicant filed a motion to reconsider the dismissal, which the Commission denied. This appeal followed.

         II. Standard of Review

         ¶ 9. Like the recent case of In re Stowe Cady Hill Solar, LLC, this appeal requires us to review the Commission's interpretation of its own completeness rule, a rule that is both substantive and procedural. 2018 VT 3, ¶¶ 15-21, Vt., 182 A.3d 53. In such cases, we will "defer to an agency's interpretation of its own regulation, as long as that interpretation is consistent with the statute that authorized promulgation of the regulation in question" and is consistently applied. Id. ¶ 20. As discussed below, we hold that the Commission's interpretation of its rules here was consistent with statute and prior precedent, and is therefore entitled to deference.

         III. Analysis

         ¶ 10. On appeal, applicant argues that the December 9, 2016 CPG application was substantially complete despite the lack of notice to landowners because it contained testimony and exhibits addressing all of the substantive CPG criteria. Because the application was substantially complete when filed, applicant argues, applicant had a vested right to proceed under the 2016 version of the net-metering rule. Applicant further argues that even if the application was not complete in December, the Commission's rules should be construed to allow its January 18, 2017 curative filing to relate back to the original application filing date. Applicant also claims that dismissal was an inappropriate remedy for the notice defect. Finally, ...

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