The following six energy and environmental cases were decided by the Vermont Supreme Court this year, each involving an appeal of an issued Act 250 or Section 248 permit. We provide a summary of each case and the Court’s holding below, as well as links to the full decision. 

Authors: Vic Westgate, Alex “Sash” Lewis and Jon Rose

1. In re Treetop Development Company Act 250 Development, 2016 VT 20

   In Treetop, the Supreme Court addressed the authority of a District Commission to retain jurisdiction over an Act 250 project.

   In 2013, District Commission No. 2 issued a Stratton Corporation affiliate an Act 250 permit for a project known as Treetop at Stratton, involving construction of twenty-five townhouses near the Stratton Mountain ski resort.  The condominium association that administered the common facilities at Treetop sued Stratton over construction defects in the project’s stormwater system, among other defects.  As part of a settlement, Stratton obtained an amended Act 250 permit from the District Commission, authorizing repairs and modifications to the stormwater system.  In the permit, the District Commission reserved the right to review Treetop’s stormwater system, and “to evaluate and impose additional conditions as needed.”

   Approximately one year later, the association sought to invoke this continuing jurisdiction to impose additional conditions with regard to Stratton’s stormwater management.  When the District Commission declined, the association appealed to the Superior Court’s Environmental Division. The Environmental Division found that the District Commission lacked the authority to enforce compliance with its own permit; that was rather the role of Natural Resources Board and Agency of Natural Resources.

   The Supreme Court affirmed the Environmental Division.  It held that the NRB and ANR have exclusive power to enforce compliance with Act 250 permits, whereas the District Commission’s authority is limited to considering permit applications and amending permits in accordance with In re Stowe Club Highlands, 166 Vt. 33 (1996).  By reserving the right to impose additional conditions, the District Commission effectively created a mechanism to continuously amend the permit, which both exceeded its authority and undermined the finality of the permit.

2. In re Waterfront Park Act 250 Amendment, 2016 VT 39

   In this case, handled by Brian Dunkiel and Karen Tyler of Dunkiel Saunders on behalf of the City of Burlington, the Supreme Court addressed the application of Act 250 Rule 34(E), also known as Stowe Club Highlands analysis, governing the review of applications for Act 250 permit amendments.

   It arose from a 1994 Act 250 permit amendment authorizing the City of Burlington to host festivals and public events at its Waterfront Park, subject to conditions limiting the time of year, number, and maximum sound levels of events at the Park.  Over the ensuing years, significant commercial and residential development occurred around Waterfront Park, and events held there became an important element of the City’s cultural and economic life.  In 2012, the City obtained a permit amendment to lift the time of year and numerical restrictions on events at the Park, and to modify the sound limits.  A neighboring landowner, who relied on the original permit in purchasing a condominium adjacent to the Park in 2008, appealed the 2012 amendments to the Superior Court’s Environmental Division.  The Environmental Division ruled in the City’s favor.

   On appeal, the neighbor argued that the City was not entitled to amend its Act 250 permit, because it was merely relitigating the existing permit conditions, and because the Stowe Club Highlands flexibility vs. finality analysis weighed against the amendments.  The Supreme Court affirmed, rejecting both of the neighbor’s arguments.  First, the Court held that since the Park had undergone a significant transformation since 1994, the City’s amendment application was not merely an effort to relitigate the 1994 permit.  Second, the Court held that the Stowe Club Highlands factors weighed in favor of flexibility: the dramatic changes in and around the Park were beyond the City’s control; the amended sound limits incorporated guidelines unavailable in 1994; and the amendment would further the goals of the City’s 2013 municipal plan.  While the neighbor’s reliance on the 1994 permit in purchasing her condominium weighed in favor of finality, on balance, that was outweighed by the other factors.  The Court ruled that the City was entitled to seek an amendment of the Waterfront Park Act 250 permit to address the substantial changes that occurred there over time.

3. In re Petition of Rutland Renewable Energy, LLC for a Certificate of Public Good Pursuant to 30 V.S.A. § 248, et al., 2016 VT 50

   In this review of a Public Service Board order, the Section 248 Certificate of Public Good (CPG) issued for the 2.3 megawatt Cold River Solar Project was challenged by the Town of Rutland and five adjoining landowners on the basis of the Project’s compliance with Section 248 criteria for (1) orderly development of the region, (2) aesthetic impact, and (3) impact on historic sites. 

   Although a split Court (3-2) ultimately upheld the Board’s decision in favor of the project on each of the three criteria, the Justices were strongly divided on the issue of whether the Board gave “due consideration” to the recommendations by the Town of Rutland, as is required under 30 V.S.A. § 248(b)(1).  The Town’s recommendations were based on Solar Siting Standards adopted by the Selectboard and in the process of being added to the Town Plan.  The majority ultimately ducked the question on the basis that the lack of evidence for a regional impact from the Project was dispositive, emphasizing that “the statutory requirement relates to orderly development of the region, not to a particular municipality within the region.”  Justice Robinson concurred with the majority on all points except the due consideration issue, writing separately to argue that purely local impacts are not irrelevant, and that the statutory language requires consideration by the Board (but not deference). The dissent disagreed that the Board had given any real weight to the Town’s recommendations.

   The Court was also split on the Board’s aesthetic analysis of the Project.  The majority made two clarifications as to what is required under the Board’s application of the Quechee Test to determine whether a project will have an undue aesthetic impact.  First, the Court stated that in considering the sensibilities of the average person, the Board “can and should consider all vantage points, including from private property.” (Emphasis added). This is a change from the Board’s case law, which has generally held that the Quechee Test is focused on public vantage points.  Second, in response to the dissent’s suggestion that the Board should have considered whether there were alternative sites in the area available for the Project, the majority rejected this as an unprecedented and unreasonable burden, noting that even if such a burden existed it would be on opponents, not on the applicant.

   Note: Due to the date the Project petition was filed with the Board, the Court did not consider the decision under the current version of the statute.

4. In re Costco Stormwater Discharge Permit, 2016 VT 86

   In the Costco case, the Environmental Court had affirmed an Act 250 permit and wetlands permit for the expansion of an existing retail store and addition of an adjacent, six-pump gasoline station in Colchester.  In doing so, the Court issued a variety of interesting legal and evidentiary rulings, including (1) a finding that under Act 250 criterion 5 (relating to unsafe highway conditions), an applicant need not take steps to alleviate already-existing congestion so long as the permit includes conditions to alleviate the incremental congestion caused by the project; (2) reaffirmation of a previous decision that the environmental court need not remand a permit appeal to ANR to consider “insubstantial” revisions that appear not to have been considered at the agency but do not “affect new parties not participating in the proceedings”; (3) upholding that the environmental court properly considered “cumulative impacts” analysis under the Vermont Wetlands Rules and determined that the project did not require “mitigation sequencing” under those rules where a State expert had testified that the state considered such cumulative impacts in its impacts analysis; (4) that the Environment Court properly excluded as unreliable an expert’s stormwater software model that used as inputs “average rather than specific measures accurately reflecting the variability of [an] existing filter strip … an underestimation of the efficiency of the new system, and . . . only one specific year of rainfall as a guide”; and (5) a ruling that a challenger to the applicant’s wetlands permit did not effectively rebut the presumption of compliance with water pollution and waste disposal criteria created by the project’s stormwater permit through cross examination establishing that ANR had relied on nationally-established stormwater design standards in approving the project rather than performance-testing the system itself. 

5. In re North East Materials Group LLC, 2016 VT 87

   In this procedurally-complex case, the Supreme Court addressed, for the second time, the issue of whether a rock-crushing operation on a much larger tract of land owned by Rock of Ages (ROA) in Barre was a “substantial change” to a “pre-existing development” such that the operation required Act 250 approval.  (“Pre-existing developments” are normally insulated from Act 250 review unless a “substantial change” has occurred.)  ROA argued that the rock-crushing operation was not a “substantial change” because such operations were conducted on various other portions of the tract for many years prior to Act 250’s adoption.  Thus, the issue was essentially whether the movement of rock-crushing operations from one part of the tract to another over the years constituted a “substantial change.”

   The trial court held that because rock crushing is, and has always been, a mobile operation, and that “the present relocation of ROA’s crushing to [the new site] is consistent with the intrinsically portable nature of rock crushing and with ROA’s historic pattern of mobile crushing operations.”  But the Supreme Court rejected that reasoning, noting that the “location of a particular activity or operation within a tract is often inextricably connected to its impact” and finding that the Environmental Court’s analysis would impermissibly short circuit the substantial change analysis, which requires both an examination into whether a change is “cognizable” and an analysis of the actual potential impacts of a proposed change on the Act 250 criteria.  Conducting this analysis, the Supreme Court found that a substantial change was likely, given the increased noise, traffic and dust conditions that would affect the neighbors in the area of the relocated operations.  Thus, the Supreme Court ordered the operator to seek Act 250 review before the new operations could begin.

6. In re B&M Realty, Inc., 2016 VT 114

   This Act 250 case involved a large proposed multi-phase development for office, retail, restaurant and residential uses off Exit 1 of I-89 in Hartford, with the first phase alone encompassing more than 15 acres of construction.  Although the District Commission denied the project an Act 250 permit, the Environment Court disagreed on appeal and found that the Project complied with the Act 250 criteria.  Reversing the Environmental Court, the Supreme Court held on cross-appeal that the Project did not comply with the 2007 version of the Two-Rivers Ottauquechee Regional Plan, which it deemed applicable to the Project due to Vermont’s rule vesting rights in regulations as they exist at the time a complete permit application is filed.

   In particular, the Court felt that the Environmental Court misinterpreted the phrase “principal retail establishments,” which the Regional Plan required be located in town centers, designated downtowns, or designated growth centers.  The Environmental Court viewed the proposed development as a single “establishment,” and concluded that it was not a principal retail establishment because it did not designate more space specifically for retail use than the other uses.  Reviewing de novo, the Supreme Court interpreted “principal retail establishments” to include projects such as the proposed development, which would contain a restaurant and nearly 35,000 square feet of retail space.  Similarly, the Supreme Court disagreed with the Environmental Court on a Regional Plan provision limiting the location of “major growth or investments” and reserving land near highway interchanges for transportation related services.  Where the Environmental Court concluded that these terms either did not apply or were unenforceable, as undefined or merely aspirational policy statements, the Supreme Court found that the Regional Plan’s provisions “reinforce each other in establishing a clear and mandatory framework for development.”  In considering the provisions not just independently, but in the “broader context of the regional plan,” the Court concluded that the Plan’s provisions were such that “a reasonable person can discern what is prohibited,” and were therefore clear and enforceable.  

   Having determined that these provisions of the Regional Plan applied, and that they prohibited such development as the proposed Project in the area off Exit 1, the Supreme Court concluded the Project does not comply with Criterion 10 of Act 250 and reversed the Environmental Court’s decision.

CASES TO WATCH FOR IN 2017:

A slate of Public Service Board cases involving solar projects and at least one Act 250 case are set to be decided in 2017 after the Court heard oral arguments for all four cases on the same day in October 2016.  You can listen to the oral arguments here.

• In re Petition of New Haven GLC Solar, LLC, Docket No. 2016-125 – The Town of New Haven appealed a Certificate of Public Good issued by the Public Service Board for a 500 kW net metered solar project, arguing there were material changes to the Project after the application was submitted.
• In re Petition of GMPSolar-Richmond, LLC , Docket Nos. 2016-034/2016-148 – A consolidated appeal of a denied intervention motion and the Certificate of Public Good for a 2 MW solar project, filed by Allco Renewable Energy Limited, regarding its asserted interests under the Public Utility Regulatory Policies Act (PURPA).  Geoff Hand and Vic Westgate of SRH Law are representing appellee GMPSolar-Richmond, LLC.
• In re North East Materials Group LLC Amended Permit, Docket No. 2016-170 – An appeal by neighbors of an asphalt plant regarding Act 250 permit conditions imposed by the Environmental Court.  Neighbors argue the conditions are insufficient to ensure compliance with Act 250 criteria.
• Nancy Myrick v. Peck Electric Co. et al., Docket Nos. 2016-167/2016-169 – A case of first impression involving neighbors to a solar project asking the Court to expand Vermont common law to hold that visual aesthetic impacts can constitute a recoverable nuisance.