How the Public Utility Commission Sacrifices Vermont’s Scenic Beauty
Our recent journey into a previously overlooked area of Vermont’s regulatory decision-making process began with a phone call from a neighbor of the field in the photo to the right, the site of a proposed 500 kW net-metered solar array in Manchester with a view of Mt. Equinox.
The caller explained that the evidentiary hearing was held the day before, but he and his neighbors had no clue how to participate in the Public Utility Commission’s (PUC) process. As a result, they had nothing in the evidentiary record to support their issues with the site, which include the fact that the field floods regularly, resulting in ice jams in winter. And then there is the view – the scenic natural beauty of the area, which is enjoyed by residents of the neighborhood and drivers on Richville Road.
We learned from reading the transcript of the hearing that the PUC Hearing Officer asked the parties to Brief two specific topics:
1) the part of the Quechee analysis (aesthetics test) about whether a project offends the sensibilities of the average person, and
2) “societal benefits.”
While we were aware that the PUC added a section to the Quechee analysis that was developed for use in Act 250 to evaluate aesthetic effects of a development, it is not something we paid much attention to. We will from now on. Here’s why:
The PUC promulgated Rule 5.109(A), in which the Commission adopted the Vermont Environmental Board’s Quechee analysis for guidance in assessing the aesthetic impacts of projects, including solar panels, wind turbines, cell towers, transmission lines and substations.
The first part of the Quechee analysis is to determine if a project will have an adverse effect on aesthetics and the scenic and natural beauty. If the answer is yes, the second part is to determine whether the adverse effect of the project is “undue.” This is done by answering three questions:
a. Does the project offend the sensibilities of the average person? Is it offensive or shocking because it is out of character with its surroundings or significantly diminishes the scenic qualities of the area?
b. Does the project violate a clear, written community standard intended to preserve the aesthetics or scenic beauty of the area?
c. Have the petitioners failed to take generally available mitigating steps which a reasonable person would take to improve the harmony of the project with its surroundings?
At some point, the PUC added a third part: “Societal Benefits: Analysis of whether a particular project will have an “undue” adverse effect on aesthetics and scenic or natural beauty is also significantly informed by the overall societal benefits of the project.”
When did the PUC begin to use “societal benefits” as part of its aesthetics analysis?
In 2001, the PSB (changed to PUC in 2017) denied a net-metered wind turbine. It was appealed to the Vermont Supreme Court which issued its ruling in 2002. The Court wrote:
Fundamentally at issue in this case was whether Halnon’s proposed project survived scrutiny under the Quechee test. The parties in this matter offer differing interpretations regarding proper application of the Quechee test, alternately referring to both a two-part, and a three-part Quechee analysis. For purposes of clarification we re-state the proper Quechee test for determining whether a project will have an undue adverse effect on the aesthetics or scenic and natural beauty of an area.
The Court proceeded to state what it considers to be the “proper” Quechee test: the original two-part test used by the Environmental Board, absent “societal benefits.”
A review of PSB decisions prior to 2002 shows that the Board’s use of “societal benefits” was not about aesthetics, but was used only in weighing costs and benefits in the Searsburg Wind case in 1996 and a GMP rate case in 1998.
However, after the Court specifically told the PSB how to evaluate the aesthetic impacts of a project using the two-part Quechee test in 2002, the PSB did the exact opposite of the guidance provided by the Court.
The Court’s Halnon decision was issued on August 20, 2002. On August 28, 2002, the PSB issued an Order about transmission facilities. Included in the discussion about aesthetics was this line: “The Board’s assessment of whether a particular project will have an “undue” adverse effect based on these three standards will be significantly informed by the overall societal benefits of the project.” That was the first use of that language by the PSB.
With one line – “The Board’s assessment of whether a particular project will have an “undue” adverse effect based on these three standards will be significantly informed by overall societal benefits of the project.” and a footnote that said “Consider, for example, reduction in need for power plant or transmission investments, or other societal costs.” – the PSB under Chair Michael Dworkin up-ended the Quechee analysis and gave itself the ability to overcome any undue adverse aesthetic impact with a single reference to “societal benefits.” No law or rule was required.
The same sentence appears again and again in 2002 and 2003 in cases involving transformers, met towers, substations, a telecom facility, and transmission lines.
In a 2003 case involving a relocated transmission line, the Department of Public Service asked the PSB to remove the sentence about societal benefits. “The DPS contends that the sentence is not necessary to the outcome of this case and potentially has significant implications for how the Quechee test is applied going forward.”
In response, the PSB said,
“We decline to adopt the DPS suggestion, and we do not delete the sentence and accompanying footnote from this decision. We have included similar language in many previous decisions related to the assessment of the environmental impacts of projects under criterion 5 of 30 V.S.A. § 248(b). This assessment process is one that the Board has long used in balancing the costs and benefits of proposed electric utility infrastructure improvements. This concept was articulated by the Board as early as 1986 when the Board explained that projects with adverse environmental effects may still be approved under Section 248 if they are shown to be necessary for the public good. The concept expressed by the sentence and footnote objected to by the DPS is a straightforward application of this general principle.”
Following the trail of bread crumbs back to that 1986 decision, we found that it said:
Neither Section 248(b)(4) nor the more narrowly applicable Executive order set out absolute prohibitions on adverse affects. The statute allows adverse affects which are “due” i.e. required by a necessary project… Thus the mere fact that CVPS’s proposed project will adversely affect significant areas of undeveloped land and some prime agricultural areas does not mean the petition must be rejected.
In 2004, Paul Brouha challenged the use of “societal benefits” in the Sheffield met tower case. In response, the PSB said “…it has been our longstanding and consistent practice to apply the Quechee analysis of Act 250, and also recognize a project’s overall societal benefits in order to determine whether a project has an undue adverse effect on aesthetics.”
In Deerfield Wind in 2009, the PSB said, “in approving wind generation facilities in particular, we balance the significant societal benefits of wind power against its aesthetic impacts.”
The Towns of Albany and Craftsbury challenged the use of “societal benefits” as part of the PSB’s aesthetics analysis in 2011 during the GMP Lowell Wind case. In its Final order, the PSB said,
“Nothing in Section 248 requires the Board to utilize the Quechee test exactly as it was developed by the Environmental Board, nor is the Board prohibited from considering the overall societal benefits of a proposed project in reaching its determination. Our determination of whether a proposed project would have undue adverse impacts under Section 248, is based on both our analysis under the Quechee test and our consideration of overall societal benefits that will be derived from a particular proposed project.”
“Societal benefits” in the aesthetics analysis is distinct from the “general good of the state” that the PUC also uses.
In 2014, the Legislature directed the Commission to adopt revised net-metering rules to take effect in 2017 requiring that “with respect to net metering systems that exceed 150 kW in plant capacity, the rules shall apply the so-called ‘Quechee’ test for aesthetic impact as described by the Vermont Supreme Court in the case of In re Halnon, 174 Vt. 515 (2002). The rules and application form shall state the components of this test.”
In 2017, the Commission adopted revised rules that state the components of the test verbatim from Halnon and does not include any direction that the Commission would consider societal benefits.
Back to the Manchester 500 kW net-metered solar case, on June 25, 2021, the PUC Hearing Officer issued the Proposal for Decision to deny the project on the grounds that it would offend the sensibilities of the average person. The proposed decision quotes the above 2014 law but, curiously, despite both the Court’s ruling from 2002 and the new law and rule, he wrote, “It is an open question whether the Commission’s precedent of considering societal benefits when applying the Quechee test is applicable in net-metering cases.”
VCE believes that taking the 2002 Court decision together with the 2014 law and rule adopted by the PUC in 2017, the application of a“societal benefits” test weighing against findings of undue aesthetics impacts represents an exceedance of the Commission’s statutory authority.