A Legal Opinion (about wind energy) Worth Reading

PETER HENNER
ATTORNEY AND COUNSELOR AT LAW
P.O. BOX 326
CLARKSVILLE, NEW YORK 12041-0326

Phone: (518) 768-8232
Fax: (518) 768-8235
Email: peter@peterhenner.com

WEB SITE: peterhenner.com

*via facsimile transmission and regular mail

October 15, 2007

Betsy Bernocco, Supervisor
Town of Richmondville
211 Winegard Road
Richmondville, NY 12149

Alicia Terry, Director
Schoharie County Planning and Development Agency
349 Mineral Springs Road
Cobleskill, NY 12043

Re: Wind turbines are not a special use within the meaning of the Richmondville Zoning Ordinance

Dear Ms. Bernocco and Ms. Terry:

Schoharie Valley Watch has asked me to provide an opinion with respect to the question of whether wind turbines can be sited in the R-2 zone in the Town of Richmondville. Apparently, it has been suggested that wind turbines can be sited in the R-2 zone because a wind turbine is allegedly a "public utility station or structure", which is a permissible use in an R-2 zone if the applicant obtains a special use permit.

For the reasons set forth below, I do not believe that a wind turbine qualifies as a special use under the Town's Zoning Ordinance. Furthermore, if an applicant seeks a variance to site a wind turbine in the R-2 zone, the applicant would not be entitled to the benefit of the "relaxed" zoning standards applicable to "public utilities".

A commercial wind turbine is not a "public utility station or structure" under the Town of Richmondville Zoning Ordinance

Although the Town's Zoning Ordinance contains a comprehensive list of definitions, the term "public utility station or structure" is not defined. In the absence of a statutory definition, we must rely on the plain, ordinary meanings of the words. A wind turbine, owned and operated by a private commercial enterprise, is not a "public" entity. Furthermore, a company that uses a wind turbine to generate electricity for sale to a competitive market, rather than to provide a necessary service to the public, is not a "utility".

A "public utility" has been defined as a "private business, often a monopoly, which provide services so essential to the public interest as to enjoy certain privileges such as eminent domain and be subject to such governmental regulation as fixing of rates, and standards of service", 2 Anderson, American Law of Zoning § 12.32 at pages 568-569 (3d Ed.). Typically, a public utility: 1) provides essential services, 2) is subject to some degree of public regulation, and 3) is subject to some logistic constraint with respect to the siting of its facility.

However, a wind turbine does not meet any of these criteria. Although it may be argued that the electricity which is generated is important, the electricity is not sold to customers, but, instead, is typically sold to the electric grid through the Independent System Operator, and is then distributed to public buyers. The sale of electricity is no longer a monopoly; in the past, all electric generation was done by a utility company, such as the former Niagara Mohawk, which was heavily regulated by the Public Service Commission ("PSC"). Today, after the "restructuring" or deregulation of the electric industry, generators of electric power, such as the owners and operators of wind turbines, are merchant plants, that compete with each other to sell electricity. The electricity that is generated can not be considered "essential", since it may not be sold if, on any particular day, cheaper electricity is available from other generators (electricity generated by wind turbines can not be stored; it must be used when it is generated). This is in sharp contrast to the former system, where virtually all of the electricity that was used within a service area was generated by one company, and both the amount of electricity and its price were regulated by the PSC.

Furthermore, for the most part, wind turbines operate outside of any public control or regulation. They do not have a franchise from a public entity, the prices of the electricity are not regulated, nor do they have any quasi governmental powers, such as the power of eminent domain. In short, even assuming that wind turbines could be considered to be "utilities", they do not have any indicia of any "public" character.

Accordingly, a wind turbine is not a "public utility station or structure" under the Zoning Ordinance. Therefore, it can not be sited in the R-2 zone as a special use. The "public utility" use variance exception does not apply to wind turbines

In Consolidated Edison Company v. Hoffman, 43 N.Y.2d 598 (1978), the New York State Court of Appeals established a "public utility" use variance exception. In Consolidated Edison, the owner of a nuclear power plant had sought a variance from local zoning standards to build a 1000 foot tall cooling tower and the Village had denied the variance. The denial was overturned because Consolidated Edison provided an essential service in the form of electricity generation, subject to governmental regulation. Furthermore, since the nuclear generating plant was already in existence, the cooling tower had to be built relatively close to it, and could not readily be built at an alternative location. The Court found that public utilities needed to have relaxed zoning standards in order to accomplish their mission, and that the zoning standards should be interpreted to facilitate their operation.

15 years later, in Cellular Telephone Company v. Rosenberg, 82 N.Y.2d 364 (1993), the Court of Appeals held that cellular telephone facilities qualified for a public use variance, pursuant to Consolidated Edison. The Court noted that cellular telephones were heavily regulated under the Public Service Law and the Transportation Corporations Law, and that there was a need for an additional cell tower, to remedy a gap in service coverage. The Court of Appeals repeated and reaffirmed its earlier determination that, in order to obtain a variance, "the utility must show that modification is a public necessity in that it is required to render safe and adequate service, and that there are compelling reasons, economic or otherwise" which justify the departure from existing zoning standards, Consolidated Edison, 43 N.Y.2d at 611, quoted in Cellular Telephone, 82 N.Y.2d at 372 and cited with approval at 373.

I am aware that the advocates of wind power have frequently claimed that wind turbines will qualify as a public utility, and will therefore be entitled to the relaxed zoning standards that the Court of Appeals has authorized in Consolidated Edison and Cellular Telephone Company. Nevertheless, I respectfully submit that such an opinion represents mere wishful thinking on the part of wind advocates. No court has ever held that any privately owned, unregulated electric generating facility, including a wind turbine, is a public utility entitled to relaxed zoning. In any event, commercial wind plants simply do not meet the basic criteria for the application of the public utility exception because, rather than generating electricity for a public need, they are generating electricity for private sale, and wind turbines are not subject to governmental regulation.

It is important to note that while there have been a number of cases citing Cellular Telephone since 1993, no New York State Court has applied the public utility doctrine to any facility other than cellular telephones. Furthermore, even for cellular telephones, the question of whether the public utility doctrine applies must be considered on a case-by-case basis, Nextel v. Fort Ann, 1 A.D.3d 89,93 (3d Dept. 2003). In any event, in all of the cases since Cellular Telephone, courts have noted that the cellular telephone company must demonstrate that the requested variance is actually necessary to enable the requester to fulfill its mission as a public utility. In most of these cases, the cellular telephone company demonstrated such a need, and the Court overturned the variance denial (but see Cellco. Partnership v. Town of Hurley, 262 A.D.2d 849 (3d Dept. 1999), where the Court determined that the telephone company had not met its burden, and sustained the denial of the variance).

In the event that a wind developer applies for a special use permit in the Town of Richmondville, it would initially be required to present arguments as to why it is a public utility. Assuming that it met the three criteria for public utility, that it: 1) provides an essential service, 2) is subject to public regulation, and 3) needs the specific site in question, it would still need to demonstrate that there is a "public necessity" for the electricity that will be generated. I do not believe that a wind turbine developer can meet such a burden. To meet such a burden, the developer would have to show why the wind turbine is necessary when other, cheaper power is available. If the proposed developer cannot make the necessary showing, the Zoning Board of Appeals would be well within its authority to deny an application for either a special use permit, or for a variance to permit the siting of the wind turbine.

Conclusion

There may be some advantages for the Town of Richmondville to adopt regulations to specifically address the potential development of wind energy within the Town. However, at the present time, the Town's existing Zoning Ordinance provides protection against unwanted wind turbines. In any event, the Town can provide adequate protection by adopting a moratorium until it can make a careful, reasoned determination of how it wants to handle the prospective development of wind energy.

Consequently, the Town Board should not take any immediate action with respect to the adoption of a wind ordinance, but should instead take the necessary time to determine the best course of action to protect the citizens of the Town, and to evaluate all of the costs and benefits that may be associated with the potential development of wind energy within the Town.


Very truly yours,

Peter Henner

cc:
Marvin Parshall, Jr., Town of Richmondville Attorney
Harold Loder, Chairman, Town of Richmondville Planning Poard
Gene DiMarco, Town of Richmondville Code Enforcement Officer
Michael West, Schoharie County Attorney