Don't Waste Oregon Committee v. Energy Facility Siting Council

FADELEY, J.,

dissenting.

The Oregon State Energy Facility Siting Council’s (EFSC) order does not show that it complied with state law *154 when it granted the site certificate permit to build an air-polluting generation facility in this case.

The agency explains why it has chosen not to comply with the statutes rather than how it complied. That is, the agency offers an excuse for not complying. This excuse is quoted by the majority, 320 Or at 152-53, as proof of compliance with the statutes demonstrated in the agency order. Because only the excuse, not compliance, is present in this case, I dissent and would remand to the agency.

Oregon statutes require that the Oregon Department of Energy (ODOE) “shall transmit to the Governor and the Legislative Assembly a comprehensive plan” about energy generation. ORS 469.060(1). Under ORS 469.060(3), “the plan * * * shall include, but not be limited to:

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“(e) A strategy for reducing the emission of gases that contribute to global warming. The purpose of the strategy shall be to reduce these emissions by at least 20 percent below 1988 levels by 2005 * * *.”

Thus, the Oregon legislature requires a 20 percent reduction in specified kinds of air pollution during the next decade. Before granting a certificate to permit construction of a new generation facility, EFSC must adopt a need standard under ORS 469.501. Subsection (1)(L) of that section, referred to as the basic rule, requires that:

“In adopting the need standard, the council shall consider all of the costs of the emission from energy facilities of gases that contribute to global warming.” (Emphasis added.)

Even when granting an exemption from the need standard, EFSC still is statutorily required by ORS 469.501(2) to give “consideration of the implementation” of the 20 percent reduction in greenhouse gases mandated by ORS 469.060. (Emphasis added.) ORS 469.501(2) in part provides:

“The council may adopt exemptions * * * from any need standard adopted under subsection (1)(L) of this section if the exemption is consistent with the state’s energy policy * * * and the council’s consideration of the implementation of the strategy prepared under ORS 469.060 for reducing the emission of gases that contribute to global warming.” (Emphasis added.)

*155 Thus, there is no exemption from the need standard that is authorized unless the council engages in “consideration of the implementation of the strategy” to reduce global-warming gases by 20 percent in the next decade.

The issue in this case is whether EFSC must follow the foregoing statutory law or, instead, may be excused from following it on the bases that were articulated by a hearings officer acting for EFSC. EFSC’s order granting a certificate to build a gas-fired generation facility in Oregon fails to show that the state agency complied with those statutory directives. As the following discussion will disclose, the order shows that the agency substituted a different standard, one adopted by another executive branch agency, instead of applying the legislative standard calling for reduction in global-warming gases. But EFSC’s order does not show that it meets the substituted standard, either. Permitting a new source must be shown to comply with the law. Even more disturbing, the agency makes no claim that the substituted standard — stabilization — has been met. The agency mentions the stabilization standard only as a basis for failing to follow the statutory reduction, not as the standard that the agency says it applied in this case.

The majority fails to require that the order show compliance with the law, i.e., require that the order show that EFSC engaged in “consideration of the implementation” of the statutory goal of a “reduction” in global-warming gases. Even if “stabilization” could be argued to be a “strategy for reduction by 20 percent,” the agency did not, on the record in this case, engage in any “consideration of implementation” of stabilization of the amount of global-warming gases emitted in Oregon.

Petitioners in this case contend that the exemption granted by EFSC for certain gas-fired thermal generating plants, an exemption incorporated into and forming the basis for the agency’s granting of a construction permit in this case, does not comply with certain of those statutory duties.

EFSC has granted permits to increase rather than reduce the generation of greenhouse gases within Oregon, gases that contribute to global warming. Petitioners’ request *156 for judicial review of granting those permits raises the question whether EFSC complied with the statutes in effect at the time that the permits (siting certificates) were granted. Did the council consider implementation of the strategy “for reducing the emission of gases that contribute to global warming * * * by at least 20 percent below 1988 levels by 2005”? Must the council have done so? Was any consideration given that was sufficient to comply with the requirement that it consider “implementation” of the reduction below 1988 levels? 1

ANALYSIS

EFSC issued its Final Order on May 11, 1994. The Final Order relied heavily on EFSC’s Order dated February 2, 1994. However, when one looks at the February 2, 1994 Order, it is apparent that, in the particulars at issue, it relies heavily and only on the hearings officer’s report dated January 19, 1994. The siting agency adopted “the reasoning and conclusions of the hearings officer as expressed in his report of January 19, 1994.” (Final Order at 11.)

The basis for the hearings officer’s report, and of EFSC’s order founded on it, is flawed, because it fails to consider and/or analyze the “reduction” requirement of ORS 469.060 in at least three respects.

A. Benchmark v. Reduction

The Final Order articulated, inter alia, the following finding:

*157 “EFSC then found that a benchmark of ‘stabilizing C02 emissions at the 1990 level’ has been adopted. (Finding #4).” (Final Order at 11.)

That finding of the Final Order is based on the hearings officer’s report of January 1994. 2

ORS 469.060 states that the “purpose of the strategy shall be to reduce” certain emissions “by at least 20 percent below 1988 levels by 2005.” (Emphasis added.) The hearings officer’s report, adopted by EFSC, essentially states that EFSC does not have to follow the mandates of ORS 469.060 for two reasons: because “some of the measures required to meet that target would have substantial negative impacts,” and because the 20 percent reduction is a “target,” not a requirement. Instead of following any of the statutory mandates, the hearings officer focuses on the Oregon Progress Board’s stated “benchmark of stabilizing carbon dioxide emissions at the 1990 level.” (Emphasis added.)

I cannot agree that the statutes may be discarded and their provisions avoided by substituting the “bench-mark.” The statutes cited require the siting agency to comply with them, not some different criteria of the executive branch’s Progress Board. On this issue, the hearings officer’s recommendation to permit construction of new combustion generators does not carry out the statutory reduction goal set forth in ORS 469.060.

B. Lesser Increase v. Reduction

As another reason for permitting the increase:

*158 “The need exemption rule is for ‘unlimited amounts of high efficiency cogeneration and limited amounts of renewable resource and efficient * * * natural gas facilities,’ and these ‘facilities emit less C02 than new or existing coal or oil plants and existing natural gas plants.’ (Finding #5).” (Final Order at 11.)

That finding is not helpful, because it merely states that what EFSC wants to do is “less” polluting than certain other generators are or would be. It does not speak to any actual reduction in global-warming gases nor to the strategy for reduction of those gases by 20 percent below current levels. Instead, EFSC appears to favor the “lesser of two evils” when it states, not how an increase in global-warming gas complies with the reduction statute, but only that “facilities emit less C02 than new or existing coal or oil plants and existing natural gas plants.” This does not advance the reduction requirement of ORS 469.060. An increase in global-warming gases is not justified merely by saying that the increase could have been worse if coal or oil was burned. The reference to other sources of pollution does nothing to carry out the reduction goal set forth in ORS 469.060.

C. Natural Gas Exemption

“The natural gas exemption is consistent with the four ORS provisions [ORS 469.010, 469.190, 469.310, and 469.060] cited in the above-quoted section of Senate Bill 1016. ORS 469.010 establishes a goal to ‘promote the efficient use of energy resources and to develop permanently sustainable energy resources.’ It also includes other provisions to encourage such preferred resources and provides that ‘cost-effectiveness be considered in all agency decision-making relating to energy facilities.’ The Siting Council has implemented these provisions through its rules, including the rules which provide exemptions for renewable resources and a cost-effective test for energy resources.” (Hearings Officer’s Report of January, 1994, at 5.)

That paragraph of the hearings officer’s report is conclusory only. First, the hearings officer states as a conclusion that the natural gas exemption is consistent with ORS 469.060 and three other statutory provisions. He does nothing to show or demonstrate compliance with ORS 469.060 or 469.501(2). Instead of showing compliance, the hearings officer changes *159 the subject to discuss provisions of ORS 469.010 not related to reductions of global-warming gases. The hearings officer never explains how the natural gas exemption promotes or relates to implementation of the reduction mandated by ORS 469.060. Adoption of the hearings officer’s comments by the council do not demonstrate compliance with statutory reduction goals that EFSC is mandated to give “consideration of the implementation” to by statute.

In summary, the record of the Order in this case does not support the findings made in EFSC’s Final Order. The origin of EFSC’s findings is the hearings officer’s January 1994 report. That report, and EFSC’s findings based on it, failed to advance the reduction requirement of ORS 469.060. The “reduction” language of ORS 469.060 was discarded by interpreting reduction to be only a target, not a requirement. Nothing in the statute supports that interpretation.

EFSC does not attempt to explain how it has complied with the reduction statute at all. Instead, its order claims that it is excused from compliance. In excusing itself from compliance, EFSC does not rely on the language of the statute or on its legislative context, or even on any declaration of ambiguity in the statute.

Instead, the agency’s order shows that its consideration of implementation of ORS 469.060 consisted only of labeling the 20 percent reduction provision as a target and pointing out that another agency’s policy of stabilization differs from the statutes.

Applying the label of “target” to a goal that the legislature has mandated that state agencies meet does nothing to excuse an agency from meeting that mandate. Yet the agency used that label in this case as if the label, without any further analysis, excused the agency from its duty of “consideration of implementation” of a 20 percent reduction. Likewise, the agency simply stated that “stabilization” is the policy of another agency, as if that other agency’s policy overrides the legislative mandate and, thus, excuses EFSC from complying with the statute. Again, as in the labeling exercise, EFSC engages in no analysis of why a different agency’s policy of stabilization of emission of greenhouse *160 gases excuses EFSC from the statutory mandate to consider implementing a 20 percent reduction in those gases.

An administrative agency like EFSC may only take actions that are within the statutes that empower and limit its exercise of governmental authority. Such an agency has no independent source of authority for permitting air pollution or for taking any other action in the name of the people of the state. Where an administrative agency’s order is either “[o]utside the range of discretion delegated to the agency by law” or “[otherwise in violation of a * * * statutory provision,” a reviewing “court shall remand the order to the agency.” ORS 183.484(4)(b).

The agency order fails to show that it complied with the statutory provisions regarding reduction of global-warming gases when it granted a permit to increase emission of those gases. The order fails to comply with, and therefore violates, the statutory provisions in ORS 469.060 and 469.501(2). Because of the failure of the agency to comply with the mandates of those statutes, its order also is beyond the range of discretion delegated to the agency. Therefore, “the court shall remand the order to the agency.”

I cannot simply pass by the agency’s failure to show that it has respected the statutes, and by respecting them also has respected the earth and its natural systems in the way mandated. I cannot accept the agency’s inattention to the reduction goal set by the politically accountable body, the legislature. The legislature made the policy of protecting the health of the earth applicable even to exemptions from the need standard. The statutes doing so were effective both before the exemption rules were adopted in 1993 and 1994, and also before the certificate or permit to build a polluting generation facility was granted in 1994. Thus, the fact that the plant proposed is declared exempt from the need standard does not exempt it from the requirement of consideration of implementation of reduction in global-warming gases. Enough inattention to the health of our planet home has already transpired. I would remand to ensure that attention to the earth’s health replaces the studied inattention inherent in the agency’s present order. I dissent from affirmance of that inadequate order.

Specifically, ORS 469.501(2) states:

“The council may adopt exemptions, except for coal or nuclear power plants, from any need standard adopted under subsection (1)(L) of this section if the exemption is consistent with the state’s energy policy set forth in ORS 469.010, 469.190 and 469.310 and the council’s consideration of the implementation of the strategy prepared under ORS 469.060for reducing the emission of gases that contribute to global warming.” (Emphasis added.)

That plain statement of EFSC’S duty in relation to exemptions is contained in Oregon Laws 1993, chapter 569, section 22, which was enacted in lieu of numerous other statutes. This changed the law regarding potential exemptions of generating plants that produce gases associated with global warming.

The new law applied to the site certificates (i.e., permits to construct) for the plant in this case and also for Portland General Electric’s Coyote Springs plant.

“ORS 469.060 includes a requirement that the Department develop a strategy for reducing emissions of gases which contribute to global warming by at least 20% below 1988 levels by 2005. The Department completed that strategy as part of its 1991 energy plan. In fact, some of the measures required to meet that target would have substantial negative impacts and would require drastic actions in terms of increased taxes and curtailment of operations of existing energy facilities. The Legislature has not adopted that target as a requirement. Instead, the Oregon Progress Board has adopted a state Benchmark of stabilizing carbon dioxide emissions at the 1990 level. The Department will be submitting a strategy to the Legislature as part of its 1995 energy plan to address how that target can be met.” (Hearings Officer’s Report at 5.)