State’s final rules on energy siting raise host of questions

The Michigan Public Service Commission’s (MPSC) final rules for implementing the new law on renewable energy siting generally favor solar and wind developers over local governments and are particularly unsympathetic toward counties. MAC recently reported on the release of the formal application instructions and procedures following a lengthy stakeholder engagement process and multiple rounds of public comment. The final product is substantially different from both the law and initial MPSC recommendations.  

Defining ‘Affected Local Unit’

Public Act 233 defines an “affected local unit (ALU)” as “a unit of local government in which all or part of a proposed energy facility will be located.” Meaning, if a facility lies in a township, then a county is also an affected local unit. The law goes on to say that if a project is sited by the MPSC a developer “shall enter into a host community agreement with each affected local unit.” Additionally, a developer “shall make a one-time grant to each affected local unit for an amount determined by the commission but not more than $75,000 per affected local unit and not more than $150,000 in total,” to be deposited into an intervenor compensation fund.

The MPSC rules, however, define an ALU as “limited to include only those local units of government that exercise zoning jurisdiction.” This means that if a county is not responsible for zoning, they are ineligible for the $2,000 per megawatt community host agreement dollars and intervenor funds. In April, MAC submitted public comment to the MPSC arguing that all counties “will be impacted by the presence of a renewable energy facility: county resources will be utilized, infrastructure will be altered, acres will be occupied, constituents will voice their concerns, master plans will be re-examined, etc. It is critical that all levels of government are recognized when administering PA 233.” Ultimately, the MPSC prioritized the wants of developers in this section.

Compatible Renewable Energy Ordinance (CREO)

In the rules, the MPSC establishes that it will not resolve disputes over what is and what is not a CREO. If an ALU claims to have a CREO but includes any provisions not explicitly outlined in section 226(8) of the PA 233, a developer can file a complaint with an “administrative law judge pursuant to the Commission’s rules of practice and procedure.” The ALU will then be ineligible for the community host agreement dollars and intervenor funds, in addition to losing CREO status. The rules make no mention of a path toward regaining CREO status, which was previously included in staff recommendations.

Should an ALU adopt a “workable ordinance” rather than a CREO, and a developer decides they would prefer to go through the MPSC process, the ALU is then still eligible for community host agreement dollars and intervenor funds.

What’s next?

The vast discrepancies between the rules and statute will undoubtedly result in litigation. The new law takes effect on Nov. 29 and MAC anticipates several lawsuits, both before and after that date. In fact, Foster Swift and Cato Township have already initiated a class action lawsuit against the MPSC. If a municipality is interested in joining the suit, Foster Swift has encouraged them to contact their office prior to Nov. 8.

MAC will continue to provide updates as they become available.

For more information on this issue, contact Madeline Fata at fata@micounties.org.