By Nick Smith
Gongwer News Service
The Court of Appeals in a Thursday ruling found that while the Public Service Commission in its implementation of major renewable energy law changes passed in 2023 erred in some aspects, it largely interpreted the law correctly.
In an opinion published Thursday in In re Implementing Provisions of Public Act 233 of 2023 (COA Docket No. 373259), a three-judge panel found that the PSC’s order for implementation of PA 233 of 2023 erred in two ways.
First, the panel found the PSC had erred by incorrectly interpreting the public act as it related to its statutory timeline. Second, the PSC erred by improperly expanding the statutory definition of an affected local unit.
The three-judge panel consisting of Judge Christopher Murray, Judge Michael Gadola and Judge Michael Kelly also ruled unanimously that the PSC otherwise did not err in its interpretations of PA 233 of 2023 and that the rulemaking requirements under the Administrative Procedures Act do not apply to the PSC order.
A group of 75 townships filed a lawsuit in 2024 challenging a PSC order implementing the 2023 law moving siting of renewable energy projects to the commission.
The appellants alleged that there were procedural and substantive defects in the commission’s Oct. 10, 2024, order for implementation of PA 233 of 2023.
The appellants also argued that the order was adopted in violation of the Administrative Procedures Act and that the order misinterprets key provisions of PA 233.
The PSC’s 2024 order set out an application process for utilities and independent power providers to site renewable energy projects under the state’s updated renewable energy standard passed by the Legislature in 2023.
It was noted that under statute an affected local unit is a unit of local government in which all or part of a proposed energy facility will be located, while a local unit of government or local unit means a county, township, city or village.
One of the definitions the appellants questioned was for compatible renewable energy ordinance, or CREO.
The order stated that a CREO can only contain requirements for setbacks, fencing, height, sound and other applicable conditions outlined in PA 233 and cannot include more restrictive requirements.
This definition of CREO, the appellants argued, violates the Legislature’s intent, stating the redefinition was unreasonable and would eliminate local input in the regulation of energy facilities.
In the opinion authored by Murray, he wrote that the PSC’s interpretation regarding a CREO was that it cannot include more restrictive requirements. Murray also wrote that the PSC analysis was sound in that developers can also file an application with the PSC if an affected local unit denies an application that complies with statutory requirements or if the affected local unit amends its zoning ordinance to impose stricter requirements than in statute.
“We discern no merit in the argument that PA 233 does not limit local zoning authority, and therefore the PSC did not unduly narrow the definition of CREO,” Murray wrote.
Murray then moved to the argument that the PSC erred in interpreting the term affected local unit.
“The Legislature explicitly included all local units of government in which any part of the energy facility will be located,” Murray wrote. “It is a straightforward and simple definition to apply.”
The PSC, Murray wrote, instead focused on what he said were practicalities rather than the plain statutory language. Murray wrote that the PSC had emphasized whether a local unit had zoning jurisdiction, because only those jurisdictions can have a CREO and potentially have lawful input on the proposed energy facility through a CREO.
“But focusing only on those local units of government that do having zoning jurisdiction and therefore may cause PSC involvement with energy facility approval, ignores the entire context of the statute,” Murray wrote. “Indeed, the PSC’s revised definition of ALU ignores (1) that the statute was not passed solely out of concern for the PSC, and (2) that there may be some local units of government where the proposed facility may be located, but that do not have zoning authority.”
Murray wrote that the PSC’s limited definition of affected local unit impeded the legislative policy decision to include all affected local units of government in at least part of the process and cannot be allowed to stand.
Next was the appellants’ argument that the PSC improperly added the term “hybrid facilities” to the list of energy facilities in PA 233 and inappropriately expanded its jurisdiction to include that category of facilities.
The PSC had determined that hybrid energy facilities, or those that include multiple technology types, should meet the statutory threshold when multiple technologies are combined for siting and were supported by PA 233’s language.
Murray wrote that the appellants’ main challenge for the PSC planning for the existence of hybrid facilities was the absence of any provision allowing solar and wind energy facilities to be combined.
However, Murray wrote that the appellants had not identified a reason by a facility with multiple technology types, each of which are permitted by statute, may not fall under PSC jurisdiction under PA 233.
As to the challenge to the PSC’s timeline, Murray said the commission incorrectly interpreted the act in respect to the statutory timeline.
Under the statute, a developer must hold a public meeting in each affected local unit. At least 60 days before the public meeting, the developer must offer in writing to meet with the top elected official or their designee to discuss the site plan. If within 30 days following the meeting between the developer and the elected official or their designee, the top local official of each affected local unit notifies the developer that they have a CREO, the developer must then file for siting approval with the affected local unit.
An affected local unit must approve or deny the application for siting approval within 120 days of receiving it, although the affected local unit and developer can jointly agree for an additional 120-day extension.
“The PSC’s timeline differs from that set forth in the statute,” Murray wrote.
The PSC indicated that the top elected official must notify the developer of the existence of a CREO within 30 days following the receipt of the offer to meet and that, absent such notification, the developer may proceed as if the affected local unit does not have a CREO.
Murray noted that the 30-day timeline does not begin with the receipt of the offer to meet, but with the meeting between the developer and elected official or their designee.
“The PSC thus incorrectly interpreted PA 233 with respect to statutory timeline,” Murray wrote.
Finally, the panel agreed that the PSC did not fail to comply with any applicable requirements from the Administrative Procedures Act.
“The PSC provided interpretations of provisions of PA 233, including with respect to the statutory terms CREO and ALU and the concept of hybrid facilities,” Murray wrote. “The fact that the PSC misinterpreted portions of the statute does not mean that the PSC enacted a rule subject to APA rulemaking requirements.”
The PSC issued a statement following the ruling saying the ruling largely affirms that the commission had done its job correctly.
“On the central question of what constitutes a compatible renewable energy ordinance, the court upheld the commission’s order as consistent with the parameters established by the Legislature under Public Act 233,” the commission said. “While the commission continues to review the impact of specific findings of the court’s decision on cases before us, today’s decision largely affirms the commission’s approach and allows for continued and timely implementation of the law.”
Michigan Energy Innovation Business Council President Laura Sherman in a statement praised the ruling. The EIBC was one of multiple energy groups that were involved in the case on the PSC’s side.
“The Court of Appeals affirmed the ability for Michiganders to use their land as they wish while stimulating job creation and economic development,” Sherman said. “We expect to remain engaged in this legal process to ensure that Michigan remains a national leader in the clean energy industry, while protecting property rights and supporting local communities.”
Gongwer News Service
The Court of Appeals in a Thursday ruling found that while the Public Service Commission in its implementation of major renewable energy law changes passed in 2023 erred in some aspects, it largely interpreted the law correctly.
In an opinion published Thursday in In re Implementing Provisions of Public Act 233 of 2023 (COA Docket No. 373259), a three-judge panel found that the PSC’s order for implementation of PA 233 of 2023 erred in two ways.
First, the panel found the PSC had erred by incorrectly interpreting the public act as it related to its statutory timeline. Second, the PSC erred by improperly expanding the statutory definition of an affected local unit.
The three-judge panel consisting of Judge Christopher Murray, Judge Michael Gadola and Judge Michael Kelly also ruled unanimously that the PSC otherwise did not err in its interpretations of PA 233 of 2023 and that the rulemaking requirements under the Administrative Procedures Act do not apply to the PSC order.
A group of 75 townships filed a lawsuit in 2024 challenging a PSC order implementing the 2023 law moving siting of renewable energy projects to the commission.
The appellants alleged that there were procedural and substantive defects in the commission’s Oct. 10, 2024, order for implementation of PA 233 of 2023.
The appellants also argued that the order was adopted in violation of the Administrative Procedures Act and that the order misinterprets key provisions of PA 233.
The PSC’s 2024 order set out an application process for utilities and independent power providers to site renewable energy projects under the state’s updated renewable energy standard passed by the Legislature in 2023.
It was noted that under statute an affected local unit is a unit of local government in which all or part of a proposed energy facility will be located, while a local unit of government or local unit means a county, township, city or village.
One of the definitions the appellants questioned was for compatible renewable energy ordinance, or CREO.
The order stated that a CREO can only contain requirements for setbacks, fencing, height, sound and other applicable conditions outlined in PA 233 and cannot include more restrictive requirements.
This definition of CREO, the appellants argued, violates the Legislature’s intent, stating the redefinition was unreasonable and would eliminate local input in the regulation of energy facilities.
In the opinion authored by Murray, he wrote that the PSC’s interpretation regarding a CREO was that it cannot include more restrictive requirements. Murray also wrote that the PSC analysis was sound in that developers can also file an application with the PSC if an affected local unit denies an application that complies with statutory requirements or if the affected local unit amends its zoning ordinance to impose stricter requirements than in statute.
“We discern no merit in the argument that PA 233 does not limit local zoning authority, and therefore the PSC did not unduly narrow the definition of CREO,” Murray wrote.
Murray then moved to the argument that the PSC erred in interpreting the term affected local unit.
“The Legislature explicitly included all local units of government in which any part of the energy facility will be located,” Murray wrote. “It is a straightforward and simple definition to apply.”
The PSC, Murray wrote, instead focused on what he said were practicalities rather than the plain statutory language. Murray wrote that the PSC had emphasized whether a local unit had zoning jurisdiction, because only those jurisdictions can have a CREO and potentially have lawful input on the proposed energy facility through a CREO.
“But focusing only on those local units of government that do having zoning jurisdiction and therefore may cause PSC involvement with energy facility approval, ignores the entire context of the statute,” Murray wrote. “Indeed, the PSC’s revised definition of ALU ignores (1) that the statute was not passed solely out of concern for the PSC, and (2) that there may be some local units of government where the proposed facility may be located, but that do not have zoning authority.”
Murray wrote that the PSC’s limited definition of affected local unit impeded the legislative policy decision to include all affected local units of government in at least part of the process and cannot be allowed to stand.
Next was the appellants’ argument that the PSC improperly added the term “hybrid facilities” to the list of energy facilities in PA 233 and inappropriately expanded its jurisdiction to include that category of facilities.
The PSC had determined that hybrid energy facilities, or those that include multiple technology types, should meet the statutory threshold when multiple technologies are combined for siting and were supported by PA 233’s language.
Murray wrote that the appellants’ main challenge for the PSC planning for the existence of hybrid facilities was the absence of any provision allowing solar and wind energy facilities to be combined.
However, Murray wrote that the appellants had not identified a reason by a facility with multiple technology types, each of which are permitted by statute, may not fall under PSC jurisdiction under PA 233.
As to the challenge to the PSC’s timeline, Murray said the commission incorrectly interpreted the act in respect to the statutory timeline.
Under the statute, a developer must hold a public meeting in each affected local unit. At least 60 days before the public meeting, the developer must offer in writing to meet with the top elected official or their designee to discuss the site plan. If within 30 days following the meeting between the developer and the elected official or their designee, the top local official of each affected local unit notifies the developer that they have a CREO, the developer must then file for siting approval with the affected local unit.
An affected local unit must approve or deny the application for siting approval within 120 days of receiving it, although the affected local unit and developer can jointly agree for an additional 120-day extension.
“The PSC’s timeline differs from that set forth in the statute,” Murray wrote.
The PSC indicated that the top elected official must notify the developer of the existence of a CREO within 30 days following the receipt of the offer to meet and that, absent such notification, the developer may proceed as if the affected local unit does not have a CREO.
Murray noted that the 30-day timeline does not begin with the receipt of the offer to meet, but with the meeting between the developer and elected official or their designee.
“The PSC thus incorrectly interpreted PA 233 with respect to statutory timeline,” Murray wrote.
Finally, the panel agreed that the PSC did not fail to comply with any applicable requirements from the Administrative Procedures Act.
“The PSC provided interpretations of provisions of PA 233, including with respect to the statutory terms CREO and ALU and the concept of hybrid facilities,” Murray wrote. “The fact that the PSC misinterpreted portions of the statute does not mean that the PSC enacted a rule subject to APA rulemaking requirements.”
The PSC issued a statement following the ruling saying the ruling largely affirms that the commission had done its job correctly.
“On the central question of what constitutes a compatible renewable energy ordinance, the court upheld the commission’s order as consistent with the parameters established by the Legislature under Public Act 233,” the commission said. “While the commission continues to review the impact of specific findings of the court’s decision on cases before us, today’s decision largely affirms the commission’s approach and allows for continued and timely implementation of the law.”
Michigan Energy Innovation Business Council President Laura Sherman in a statement praised the ruling. The EIBC was one of multiple energy groups that were involved in the case on the PSC’s side.
“The Court of Appeals affirmed the ability for Michiganders to use their land as they wish while stimulating job creation and economic development,” Sherman said. “We expect to remain engaged in this legal process to ensure that Michigan remains a national leader in the clean energy industry, while protecting property rights and supporting local communities.”
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