Supreme Court No District Court No. CVCV BERTHA MATHIS and STEPHEN MATHIS, Plaintiffs Appellants, vs. IOWA UTILITIES BOARD,

Transcription

1 IN THE IOWA SUPREME COURT Supreme Court No District Court No. CVCV ELECTRONICALLY FILED NOV 01, 2018 CLERK OF SUPREME COURT BERTHA MATHIS and STEPHEN MATHIS, Plaintiffs Appellants, vs. IOWA UTILITIES BOARD, Respondent Appellee and PALO ALTO WIND ENERGY LLC and MIDAMERICAN ENERGY COMPANY, Indispensable Party Appellee, and PALO ALTO COUNTY BOARD OF SUPERVISORS, Intervenor Appellee. APPEAL FROM THE IOWA DISTRICT COURT FOR PALO ALTO COUNTY THE HONORABLE NANCY L. WHITTENBURG Final Brief of Appellees Palo Alto Wind Energy LLC and MidAmerican Energy Company

2 Bret A. Dublinske, AT Brant M. Leonard, AT FREDRIKSON & BYRON, P.A. 505 East Grand Avenue, Suite 200 Des Moines, IA Telephone: Facsimile: ATTORNEYS FOR APPELLEES MIDAMERICAN ENERGY COMPANY AND PALO ALTO WIND ENERGY LLC 2

3 TABLE OF CONTENTS STATEMENT OF ISSUES PRESENTED FOR REVIEW...8 I. THE DISTRICT COURT APPROPRIATELY DEFERRED TO THE EXPERT AGENCY S REASONABLE RULING AND INTERPRETATION OF THE TERM SINGLE SITE AS USED IN IOWA CODE 476A II. THE IOWA UTILITIES BOARD S USE OF A GATHERING LINE STANDARD IS LEGALLY SOUND AND APPELLANTS ARGUMENT CONSTITUTES AN IMPERMISSIBLE COLLATERAL ATTACK ON ZOND....9 ROUTING STATEMENT REQUEST FOR ORAL ARGUMENT STATEMENT OF THE CASE STATEMENT OF THE FACTS ARGUMENT I. THE DISTRICT COURT APPROPRIATELY DEFERRED TO THE EXPERT AGENCY S REASONABLE RULING AND INTERPRETATION OF THE TERM SINGLE SITE AS USED IN IOWA CODE 476A A. Preservation of Issue and Standard of Review B. Argument II. THE IOWA UTILITIES BOARD S USE OF A GATHERING LINE STANDARD IS LEGALLY SOUND AND APPELLANTS ARGUMENT CONSTITUTES AN IMPERMISSIBLE COLLATERAL ATTACK ON ZOND A. Preservation of Issue and Standard of Review B. Argument The Board s Gathering Line Standard was Rationally and Reasonably Developed and is Legally Sound

4 2. Appellants Argument Constitutes an Impermissible Collateral Attack on Zond CONCLUSION CERTIFICATE OF COST CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE- STYLE REQUIREMENTS CERTIFICATE OF FILING AND SERVICE

5 TABLE OF AUTHORITIES Page(s) Cases Equal Access Corp. v. Utils. Bd., 510 N.W.2d 147 (Iowa 1993) Farmers & Merch. Mut. Tel. Co. v. Iowa Utils. Bd., 829 N.W. 2d Merivic, Inc. v. Gutierrez, 825 N.W.2d 327 (Table, text at 2012 WL ) (Iowa App. Nov. 12, 2012) Neal v. Annett Holdings, Inc., 814 N.W.2d 512 (Iowa 2012) Off. of Consumer Advoc. v. Iowa Utils. Bd., 449 N.W.2d 383 (Iowa 1989) Off. Of Consumer Advoc. v. Iowa Utils. Bd., 744 N.W.2d 660 (Iowa 2008)... 16, 22, 36 Owego Dairy, LLC v. Iowa Utils. Bd., 792 N.W.2d 623 (Iowa App. Feb. 9, 2011)... 20, 21 Reid v. Iowa St. Commerce Comm n, 357 N.W.2d 588 (Iowa 1984)... 24, 31, 32, 36 Renda v. Ia. Civil Rights Commn., 784 N.W.2d 8 (Iowa 2010) S. E. Iowa Co-op. Elec. Ass n v. Iowa Utils. Bd., 633 N.W.2d 814 (Iowa 2001) Statutes 199 I.A.C. 24.2(1)(e) I.A.C I.A.C. 24.4(1)(e)

6 Iowa Admin. Code Iowa Administrative Code chapter Iowa Code chapter 476A... passim Iowa Code 17A.19(10)(h) Iowa Code 476A , 18, 23 Iowa Code 476A.1(5)... 16, 23 Iowa Code 476A Iowa Code 476A , 27 Other Authorities In re Endeavor Power Partners, LLC, Docket No. WRU , 27, 28 In re FPL Energy Hancock County Wind, Docket No. DRU , 25, 26, 28 In re Flying Cloud Power Partners, LLC, Docket No. DRU , 24, 28 In re MidAmerican Energy Company, Docket No. DRU , 25, 26 In re MidAmerican Energy Company, Docket No. RPU , 26 In re MidAmerican Energy Company, Docket No. RPU , 27 In re MidAmerican Energy Company, Docket No. RPU , 29 In re Northern Iowa Windpower, LLC, Docket No. DRU , 24 In re Zond Development Corp., Declaratory Ruling, Docket Nos. DRU-97-5, 97-6 (Iowa Utils. Bd. Nov. 6, 1997).... Passim 6

7 Melissa H. Weresh & Aaron W. Ahrendsen, Rectifying Renda: Amending the Iowa Administrative Procedure Act to Remove the Legal Fiction of Legislative Delegation of Interpretive Authority, 63 Drake L. Rev. 591 (2015)

8 STATEMENT OF ISSUES PRESENTED FOR REVIEW I. THE DISTRICT COURT APPROPRIATELY DEFERRED TO THE EXPERT AGENCY S REASONABLE RULING AND INTERPRETATION OF THE TERM SINGLE SITE AS USED IN IOWA CODE 476A.1. Off. Of Consumer Advoc. v. Iowa Utils. Bd., 744 N.W.2d 660 (Iowa 2008). Equal Access Corp. v. Utils. Bd., 510 N.W.2d 147 (Iowa 1993). S. E. Iowa Co-op. Elec. Ass'n v. Iowa Utils. Bd., 633 N.W.2d 814 (Iowa 2001). Equal Access Corp. v. Iowa Utils. Bd., 510 N.W.2d 147 (Iowa 1993). Off. of Consumer Advoc. v. Iowa Utils. Bd., 449 N.W.2d 383 (Iowa 1989). Neal v. Annett Holdings, Inc., 814 N.W.2d 512 (Iowa 2012). Renda v. Ia. Civil Rights Commn., 784 N.W.2d 8, 12 (Iowa 2010). Farmers & Merch. Mut. Tel. Co. v. Iowa Utils. Bd., 829 N.W. 2d 190. Owego Dairy, LLC v. Iowa Utils. Bd., 792 N.W.2d 623 (Iowa App. Feb. 9, 2011). Iowa Code chapter 476A. Iowa Code 476A.1. Iowa Code 476A.1(5). Iowa Code 476A.12. Iowa Code 476A.15. Rectifying Renda: Amending the Iowa Administrative Prorcedure Act to Remove the Legal Fiction of Legislative Delegation of Interpretive Authority, 63 Drake L. Rev. 591 (2015). 8

9 II. THE IOWA UTILITIES BOARD S USE OF A GATHERING LINE STANDARD IS LEGALLY SOUND AND APPELLANTS ARGUMENT CONSTITUTES AN IMPERMISSIBLE COLLATERAL ATTACK ON ZOND. Off. Of Consumer Advoc. v. Iowa Utils. Bd., 744 N.W.2d 660 (Iowa 2008). Reid v. Iowa St. Commerce Comm n, 357 N.W.2d 588 (Iowa 1984). Northern Iowa Windpower, LLC, Docket No. DRU Flying Cloud Power Partners, LLC, Docket No. DRU In re FPL Energy Hancock County Wind, Docket No. DRU In re MidAmerican Energy Company, Docket No. RPU In re MidAmerican Energy Company, Docket No. DRU In re MidAmerican Energy Company, Docket No. RPU In re Endeavor Power Partners, LLC, Docket No. WRU In re MidAmerican Energy Company, Docket No. RPU Merivic, Inc. v. Gutierrez, 825 N.W.2d 327 (Table, text at 2012 WL ) (Iowa App. Nov. 12, 2012). In re Zond Development Corp., Docket Nos. DRU-97-5, Iowa Code chapter 476A. Iowa Code 17A.19(10)(h). 199 I.A.C I.A.C. 24.2(1)(e). 199 I.A.C. 24.4(1)(e). 9

10 Iowa Admin. Code Iowa Administrative Code chapter

11 ROUTING STATEMENT Because of the public importance of the wind energy industry in Iowa, this case presents a fundamental issue of public importance and should be retained by the Supreme Court. REQUEST FOR ORAL ARGUMENT While the Indispensable Parties do not believe that oral argument is necessary in this case, the Indispensable Parties request the opportunity to present oral argument on all issues in this appeal if oral argument is granted. 11

12 STATEMENT OF THE CASE This case involves a well-settled, decades-old doctrine of Iowa utilities law. While Iowa Code chapter 476A requires a company to obtain a certificate of public convenience and necessity for generating facilities capable of producing 25 megawatts (MW) of electricity or more at a single site, the term single site was not defined by the legislature in chapter 476A. The Iowa Utilities Board ( Board or IUB ), in fulfilling its legislative mandate, was left to determine what constitutes a single site. The Board reasonably determined that the an entire wind farm, which in this case will be spread across nearly 90 square miles, and includes numerous individual, separate parcels of land, some of which host wind turbines and some of which do not, is not appropriately considered a single site. Beginning with its decision in Zond 1 and continuing for the last two decades in more than 20 decisions 2, the Board has considered arguments for any 1 In re Zond Development Corp., Declaratory Ruling, Docket Nos. DRU-97-5, 97-6 (Iowa Utils. Bd. Nov. 6, 1997). 2 The Board has applied the gathering line standard in at least 22 cases prior to this one, including, Zond Development, DRU-97-5, 97-6 (Nov. 6, 12

13 geographical size no matter how large to be considered a single site, and also considered an argument for each individual turbine to be considered a single site. The Board reasonably balanced various factors, applying its special expertise in utilities matters, and chose a middle ground based on a readily discernable standard: those wind energy turbines connected to a single gathering line would be treated as a single site. Thus, if turbines with less than 25MW capacity are on a single gathering line, a company is not required to apply for a generating certificate under chapter 476A. 1997); Northern Iowa Windpower, DRU-01-1 (Mar. 20, 2001); FPL Hancock County Wind, DRU-02-3 (Aug. 27, 2002); Flying Cloud, DRU-03-2 (Feb. 10, 2003); MidAmerican, DRU-03-3 (Jun. 6, 2003); MidAmerican Wind I, RPU-03-1 (Oct. 17, 2003); MidAmerican Wind II, RPU-04-3 (Jan. 31, 2005); Endeavor, WRU (Mar. 17, 2006); MidAmerican Wind III, RPU-05-4 (Apr. 18, 2006); MidAmerican Wind IV, RPU-07-2 (July 27, 2007); Pioneer Prairie, WRU (Feb. 27, 2008); Crystal Lake, E (May 23, 2008); MidAmerican Wind V, RPU-08-2 (Jun. 16, 2008); MidAmerican Wind VI, RPU-08-4 (Aug. 7, 2008); Wisconsin Public Service WRU (Nov. 3, 2008); Clipper Windpower, WRU (Jan. 8, 2009); Interstate Power & Light, WRU (Jan. 28, 2009); Lost Lakes, WRU (May 18, 2009); Garden Wind, WRU (Jun. 23, 2009); Clipper Windpower, WRU (Dec. 23, 2009); Clipper Windpower, WRU (Sept. 17, 2010); MWW Holdings, WRU (Feb. 6, 2015). All of these orders are available on the Board s electronic filings system website; the Indispensable Parties would also gladly provide physical copies to the Court on request. 13

14 Appellants petition for declaratory order to the Board and judicial review action in the district court below advance the position that the gathering line standard adopted and developed by the expert Board charged with regulating electric generation in Iowa over a 20-year period, and applied to more than 20 different wind energy projects without challenge and without legislative intervention is unlawfully arbitrary. To the contrary, what would be arbitrary would be to now change the longsettled and investment-backed expectations of an industry that is important to Iowa s economy. Despite Appellants arguments, there is no legitimate basis to reverse the Board s well-developed, well-reasoned, and long-reliedupon gathering line standard for wind farms. The Court should affirm the district court s decision affirming the Board s order below. STATEMENT OF THE FACTS Palo Alto Wind Energy, LLC ( PAWE ) is in the process of developing a new wind farm in Palo Alto County (the Project ), which will consist of approximately 170 individual wind turbines, spread across nearly 14

15 90 square miles and numerous individual farms, some of which will host a wind turbine and some of which will not. None of the gathering lines associated with the Project will carry 25 MW or more of power. 3 It is the intention of PAWE and MidAmerican Energy Company ( MidAmerican ) that MidAmerican will purchase the Project upon certain milestones and conditions being met, to incorporate the Project into MidAmerican s Wind XI portfolio of projects which has already obtained advance ratemaking principle approval from the Board. After Appellants filed an improper petition for declaratory judgment directly in district court a case that was dismissed for failure to exhaust administrative remedies 4 the Appellants filed a Petition for Declaratory Order with the Board on December 5, 2017, requesting that the Board find that the entire, 90-square mile area of the Project was a single site for 3 See Petition for Declaratory Order, DRU (Dec.5, 2017) at 1 (App. 29); Exhibit 6 to Petitioner s Brief in Support of Petition for Declaratory Order, DRU (Jan. 5, 2018) (App ). 4 See Mathis, et al. v. Palo Alto Wind Energy, LLC, et al., Palo Alto Case No. EQCV025570, Ruling on Defendants Pre-Answer Motion to Dismiss (Palo Alto Co. Feb. 19, 2018). 15

16 purposes of Iowa Code 476A.1. On February 2, 2018 the Board issued its Declaratory Order in response to Appellants Petition, holding that the term single site in Iowa Code 476A.1(5) as applied to wind farms refers to the wind turbines connected to a single gathering line, consistent with its welldeveloped and long-standing gathering line standard. Following Appellants Petition for Judicial Review filed on February 5, 2018, the District Court affirmed the Board s well-reasoned Order on July 3, ARGUMENT I. THE DISTRICT COURT APPROPRIATELY DEFERRED TO THE EXPERT AGENCY S REASONABLE RULING AND INTERPRETATION OF THE TERM SINGLE SITE AS USED IN IOWA CODE 476A.1 A. Preservation of Issue and Standard of Review. Appellees agree that Appellants have preserved this issue for review by this Court. Where, as here, the legislature has clearly vested the interpretation of a law in the discretion of the Board, the court will reverse the Board only if its ruling is, [b]ased upon an irrational, illogical, or wholly unjustifiable interpretation of a provision of law Off. Of Consumer Advoc. v. Iowa Utils. Bd., 744 N.W.2d 660, 643 (Iowa 2008). 16

17 B. Argument. Appellants devote much of their Brief to arguing that the Court should give no deference to the decision of the Board. Despite the length of Appellants argument on the issue, Appellants fail to address the well-known utilities law cases in which the Iowa Supreme Court has expressly and unambiguously described the general rule regarding deference given to the Board, which is summarized in this quote from the Court: We afford considerable deference to the agency's expertise, especially when the decision involves the highly technical area of public utility regulation. Equal Access Corp. v. Utils. Bd., 510 N.W.2d 147, (Iowa 1993); Northwestern Bell Tel. Co., 477 N.W.2d at 682. Accordingly, we typically defer to the agency's informed decision as long as it falls within a zone of reasonableness. Equal Access Corp., 510 N.W.2d at Consequently, the majority of disputes are won or lost at the agency level. Northwestern Bell Tel. Co., 477 N.W.2d at 682 (citation omitted). S. E. Iowa Co-op. Elec. Ass'n v. Iowa Utils. Bd., 633 N.W.2d 814, 818 (Iowa 2001); see also Equal Access Corp. v. Iowa Utils. Bd., 510 N.W.2d 147, 151 (Iowa 1993) ( In the area of public utility regulation, courts' deference to agency expertise is particularly appropriate. ); Off. of Consumer Advoc. v. Iowa Utils. Bd., 449 N.W.2d 383, 385 (Iowa 1989) ( The burden rests squarely on the challenger to show that an agency s policy choices were unreasonable; we defer readily to the [IUB s] expertise. ) (quoting Iowa- 17

18 Illinois Gas & Elec. v. Iowa State Commerce Comm n, 412 N.W.2d 600, 604 (Iowa 1987)). On judicial review, the Board s application of law to facts which is what a declaratory order contains is entitled to deference. See S. E. Iowa Co-op., 633 N.W.2d at 818; Neal v. Annett Holdings, Inc., 814 N.W.2d 512, 526 (Iowa 2012) ( Because the challenge to the agency's industrial disability determination challenges the agency's application of law to facts, we will not disrupt the agency's decision unless it is irrational, illogical, or wholly unjustifiable. ) (citations omitted). In addition to the Court s general rule regarding deference to the Board cited above, this case involves many of the traditional indicia that the legislature has clearly vested the Board with authority to interpret the term single site in Iowa Code 476A.1, as well as additional indicia of the Board s broad authority to interpret and apply the statute. First, contrary to Appellants suggestion, the legislature did vest the Board with broad rulemaking authority in Iowa Code chapter 476A. Iowa Code 476A.12, in full, provides: 476A.12 - Rules. The board shall adopt rules pursuant to chapter 17A necessary to implement the provisions of this subchapter including but not limited to the promulgation of facility siting criteria, the form for an application for a certificate and an amendment to a 18

19 certificate, the description of information to be furnished by the applicant, the determination of what constitutes a significant alteration to a facility, and the establishment of minimum guidelines for public participation in the proceeding. Iowa Code 476A.12 (emphasis added). Second, the legislature did not itself define the term single site another traditional indication of the legislature s intent to have the expert agency determine the meaning of the term. See, e.g., Renda v. Ia. Civil Rights Commn., 784 N.W.2d 8, 12 (Iowa 2010). Moreover, the fact that the legislature did not define single site, yet required the Board to apply the term in carrying out its mandate under the statute, is another significant factor in favor of deference to the agency. The Court in Renda reviewed one of its prior cases, noting, We concluded that because the term was not defined in the statute and because the department must necessarily interpret the term in order to carry out its duties, the power to interpret the term was clearly vested in the department and deference was therefore given. Id. (citing City of Marion v. Iowa Department of Revenue & Finance, 643 N.W.2d 205 (Iowa 2002)). The same is true here the Board must determine the meaning of the undefined term single site in the context of different types of electric generation to carry out its duties; therefore power to interpret the term was clearly vested in the Board. 19

20 Perhaps more importantly, the Board is also provided with the unusual authority in Iowa Code 476A.15 to completely waive any of the requirements of Subchapter I of Chapter 476A. See Iowa Code 476A.15 ( The board, if it determines that the public interest would not be adversely affected, may waive any of the requirements of this subchapter. ). Certainly, if the legislature has vested the Board with the exceptionally broad authority to waive the generating certificate requirement altogether when it sees fit, it has vested the Board with sufficient authority to interpret the terms necessary to determine whether a certificate is required. Appellants reliance on a law review article, Rectifying Renda, 5 is misplaced and does nothing to change the result that the legislature has clearly vested the Board with authority to interpret the relevant statutory terms in this case. First, as the article itself makes clear, it is advocating for a specific policy outcome, not engaging in a neutral analysis of the law. Id. at 592. Second, because of its policy purpose, the authors only cite Iowa Supreme Court decisions. When the analysis includes Iowa Court of Appeals cases and when the analysis is focused on Iowa Utilities Board 5 Melissa H. Weresh & Aaron W. Ahrendsen, Student Author, Rectifying Renda: Amending the Iowa Administrative Prorcedure Act to Remove the Legal Fiction of Legislative Delegation of Interpretive Authority, 63 Drake L. Rev. 591 (2015). 20

21 cases, the rate at which the courts defer to the Board rises. 6 Moreover, the authors of the article themselves believe courts should give significant deference to the Board based on its special expertise. After quoting several opinions authored by Justice Mansfield calling for deference to the Board s specialized expertise in several utilities-related cases, the authors make clear that they agree: Justice Mansfield s emphasis on the expertise of the agency as warranting deference corresponds with the theory if not [the] process of the Authors recommended approach. Weresh & Ahrendsen, Drake L. Rev. at 625. Thus, Appellants reliance on that law review article is misplaced and does nothing to change the appropriate result in this case. In sum, the Board has unique experience with and expertise in the siting of various kinds of utility facilities. The statute left the term single site undefined, but required the Board to apply it. The Legislature gave the 6 See, e.g., Farmers & Merch. Mut. Tel. Co. v. Iowa Utils. Bd., 829 N.W. 2d 190 (Table, text at 2013 WL at *6 (Iowa App. Feb. 13, 2013) ( We grant considerable deference to an agency s expertise, especially when its decision involves the highly technical area of public utility regulation. Because of its highly technical subject matter, we typically defer to the [Iowa utilities] Board s informed decision so long as it falls within a zone of reasonableness. ) (citations omitted) ; Owego Dairy, LLC v. Iowa Utils. Bd., 792 N.W.2d 623 (Table, text at 2011 WL at **2 3 (finding that Board s interpretation of statutory terms relating to exempt electric cooperatives and electric public utilities in chapter 476 was entitled to deference). 21

22 Board specific authority to promulgate rules on the narrow topic of Chapter 476A, including with regard to siting criteria, and even gave the Board the authority to waive the certificate requirement altogether where appropriate. There is no plausible conclusion other than that the legislature clearly intended to vest the Board with authority to interpret the term single site in the statute and that the Board s determination here is therefore entitled to deference and can only be reversed if it is irrational, illogical, or wholly unjustified a demanding test the Appellants cannot come close to meeting. See Off. Of Consumer Advoc., 744 N.W.2d at 643. II. THE IOWA UTILITIES BOARD S USE OF A GATHERING LINE STANDARD IS LEGALLY SOUND AND APPELLANT S ARGUMENT CONSTITUTES AN IMPERMISSIBLE COLLATERAL ATTACK ON ZOND. A. Preservation of Issue and Standard of Review. Appellees agree that Appellants have preserved this issue for review. When the legislature has clearly vested the interpretation of a law in the discretion of the agency, the court only reverses the agency if its ruling is [b]ased upon an irrational, illogical, or wholly unjustifiable interpretation of a provision of law...' Id. 17A.19(10)(l). However, when the legislature has not clearly vested the interpretation of a law in the discretion of the agency, the court applies a clearly erroneous standard. Off. of Consumer Advoc.,, 744 N.W.2d at 643 (citing Iowa Code 17A.19(10)(l) and (c)). 22

23 B. Argument. 1. The Board s Gathering Line Standard was Rationally and Reasonably Developed and is Legally Sound. Regardless of whether the irrational, illogical, or wholly unjustifiable standard or the clearly erroneous standard applies, it is beyond question that the Board s gathering line standard was rationally and reasonably developed and is legally sound under both standards. The gathering line doctrine began with a simple observation by the Board in Zond: The Board does not believe, in these cases, that the word site refers to a 15 or 20 square mile area. Zond at 6. This can hardly be said to be irrational, illogical, or clearly erroneous: single site the term in Iowa Code 476A.1(5) suggests a limited location, a particular place. In traditional fossil fuel and nuclear generation, if there are multiple turbines they are typically few in number and adjacent to one another in a space of acres, not miles. A wind farm can be, as in the present case, 170 individual turbines, each generating electricity separately, spread across nearly 90- square miles and not every parcel in that footprint hosts a turbine. It is a fair and reasonable question to ask: are scores of individual generators, on nearly as many individual parcels of land, over an area of miles what the legislature meant by single site? 23

24 In Zond, the Board considered several factors in testing its initial reaction that a wind farm was more than a single site. Specifically, the Board looked at the interplay between Chapter 476A and Iowa statutes meant to encourage AEP (Alternative Energy Production), including wind. See Zond at 3, 5. The Board considered the poor fit between the certificate criteria in 476A.6 and a wind farm. See Zond at 4. 7 The Board looked to how its federal counterpart, the Federal Energy Regulatory Commission, had limited the meaning of the term site, in that case to production facilities within a one-mile radius. The Board also looked for guidance to an Iowa Supreme Court case regarding the scope of Chapter 476A, Reid v. Iowa St. Commerce Comm n, 357 N.W.2d 588 (Iowa 1984). None of the factors the Board chose to consider were irrational, illogical, or clearly erroneous. Importantly, the development of the doctrine did not stop with Zond. The Board has continued to explain and support the gathering line standard across a wide variety of facts and procedural postures. For example, in Northern Iowa Windpower, LLC, Docket No. DRU-01-1, Declaratory Order (I.U.B. Mar. 20, 2001) ( Northern Iowa Windpower ), the Board 7 As the Board noted initially in Flying Cloud Partners, legislative changes in 2002 made this even more true, as HF 577 was passed specifically to encourage more generation, and more alternative generation like wind, to be constructed in Iowa. Flying Cloud Power Partners, LLC, Docket No. DRU-03-2 Declaratory Order at 4 (I.U.B., Feb. 10, 2003). 24

25 more fully explained the dispersed nature of wind turbines and the relevance of gathering lines: The Northern project will consist of 89 individual wind turbine generators.the project will cover approximately 13 square miles in Worth County, although the project, including a substation, will actually occupy only about 37 acres. Northern states that by spreading the turbines over such a large area, it will be able to best utilize prevailing winds and minimize land use interference. Because the units are dispersed, the output of each unit will be collected through a network of feeder or gathering lines. Northern Iowa Windpower at 2. In 2002 and 2003, the Board issued Declaratory Orders in In re FPL Energy Hancock County Wind and In re MidAmerican Energy Company. 8 In both cases the Board explained the impact of HF577, passed by the Iowa Legislature. The Board noted changes to the generating certificate requirements to reduce the number of factors and to orient them more toward encouraging new development, and toward state policies on alternative energy production sources and economic development. The Board also noted that the unusual power the Legislature had granted it to waive any provisions of the certificate portion of chapter 476A, which was 8 In re FPL Energy Hancock County Wind, Docket No. DRU-02-3, Declaratory Order (I.U.B. Aug. 27, 2002) ( FPL Energy ); In re MidAmerican Energy Company, Docket No. DRU-03-3, Declaratory Order (I.U.B., June 6, 2003) ( MidAmerican DRU-03-3 ). 25

26 previously limited to cases where a project was below 100MW, was now unlimited. Finally, the Board summarized why proceedings to review specific siting criteria were unnecessary: The Board s construction is based, in part, on the interplay between Chapter 476A and the legislative policy embodied in Iowa Code Because of this legislative policy, any Board determinations required under Chapter 476A have already been made or are appropriate deferred to another regulatory body. FPL Energy at 6; MidAmerican DRU-03-3 at 6. Another provision of HF 577 created a procedure for utilities to obtain advance ratemaking principles a procedure for gaining certainty for investors as to how certain investments would be treated in a later ratemaking case. MidAmerican Energy was the first company to seek to apply ratemaking principles to a wind energy project the project that was the subject of DRU-03-3, which would subsequently become known as MidAmerican Wind I. In the ratemaking principles order, the Board noted the impact of its declaratory order for the wind project: Although Iowa Code (3) d allows the ratemaking principles proceeding to be combined with a proceeding for issuance of a generation certificate under Iowa Code chapter 476A, the two proceedings were not combined here, In fact, MidAmerican is not required to obtain a generation certificate for the project because no more than 25 MW of generating capacity will be located on any single collector or gathering line. See, MidAmerican Energy Company, Declaratory Order, Docket No. DRU-03-3 (6/6/03). 26

27 In re MidAmerican Energy Company, Docket No. RPU-03-1, Order Approving Stipulation and Agreement (I.U.B. Oct. 17, 2003) ( Wind I ) at 3 4. In the ratemaking principles order for Wind II, the Board reached the same conclusion with one important distinction: rather than requiring a new declaratory order for Wind II, the Board cited to the prior Declaratory Order as controlling on why no generation certificate proceeding needed to be combined with the ratemaking principles docket. See In re MidAmerican Energy Company, Docket No. RPU-04-3, Order Approving Stipulation and Agreement (I.U.B. Jan. 31, 2005) ( Wind II ) at 3; see also 199 Iowa Admin. Code 4.12 (making declaratory orders of the Board binding on the Board and parties to the docket not only in that specific case but in cases in which the relevant facts and the law involved are substantially indistinguishable from those on which the order was based ). A year later, Endeavor Power Partners, LLC sought to build a wind farm with exactly 25 MW on each gathering line (the statute requires a certificate for any facility with a capacity of 25 MW or more. ) As a result, Endeavor filed for a waiver of the certificate requirement under 476A Under that section, the Board may waive the requirements of chapter 476A, 9 In re Endeavor Power Partners, LLC, Docket No. WRU , Order Granting Waiver With Conditions (I.U.B. Mar. 17, 2006) ( Endeavor ). 27

28 if it determines that the public interest would not be adversely affected. Endeavor at 2 (quoting Iowa Code 476A.15). It was here that the Board generalized the gathering line standard, and suggested that it was now sufficiently routine that future projects with less than 25 MW per gathering line would not need to file for individual declaratory orders or waivers: Endeavor s project is subject to review only because the capacity of wind turbines connected to a single gathering or feeder line is exactly 25 MW. If the capacity of wind turbines connected to a single gathering or feeder line was less than 25 MW, the project would fall within the parameters of various declaratory rulings issued by the Board... Endeavor at 2 (emphasis added). The Board went on to grant the waiver, making several important points relevant to the policy justifications for the gathering line standard: Wind projects do not present the same noise and environmental issues that gas or coal projects present.... Iowa s public policy is to encourage renewable generation. One way to do this is to reduce the regulatory burden on such projects when the regulations in question do not advance the public interest, as the Board has done in prior declaratory rulings. Endeavor at In prior orders, the Board had noted that a generation certificate proceeding takes a minimum of six months to complete. See, e.g., FPL Energy at 4; Flying Cloud at 4. 28

29 Finally, in the ratemaking principles for MidAmerican s Wind III project, the Board made explicit what it had suggested in the Wind II and Endeavor orders: MidAmerican states that the proposed wind project will have no more than 25 MW of generating capacity located on any single collector or gathering line. Under those circumstances, a generation certificate is not required. In re MidAmerican Energy Company, Docket No. RPU-05-4, Order Approving Stipulation and Agreement (I.U.B. Apr. 18, 2006) ( Wind III ) at 4 (emphasis added). This made perfect sense the Board had issued at least 10 different rulings on essentially the same issue, reaching the same result every time. It would be wasteful and inefficient to continue to require proceedings when the outcome was well established. Since then, the Board has addressed the issue at least 12 more times prior to this case, all in ratemaking principles or waiver cases (and one transmission franchise affiliated with a wind farm) where the developer has just over 25 MW per gathering line. In each case, the Board, after review of the disparate facts, has reached the same conclusion. Notably, not one of the more than 20 cases identified by the Appellees was appealed, and at no point in the 21 legislative sessions between the Zond decision and today has the legislature overridden the Board s position to the contrary, five years after Zond, the legislature 29

30 expanded the Board s authority under chapter 476A, taking the size cap off of the Board s ability to grant waivers, and streamlining the generation certificate process for those who have to apply by eliminating several criteria. The Board has acted rationally, logically, and well within the scope of its authority (and particularly within its zone of reasonableness) in considering relevant factors such as state policy priorities, the interplay between statutory provisions, the unique features of wind generation as opposed to traditional fossil fuels, the regulatory burdens at issue, how a similar federal agency handled a similar undefined use of the term site when applied to wind projects, and others. The Board has gradually and carefully developed the use of the gathering line standard, and has recognized and added to its analysis as the statute changed, and as the Board had more experience with the success of the gathering line standard in practice. The practical result of this long, well-developed history is that now, the Board following 23 prior decisions establishes that the decision was not arbitrary or irrational. To the contrary, had the Board ignored its own longstanding precedent, that would have been an arbitrary act. Iowa Code 17A.19(10)(h) makes clear that the Board is to follow its own precedent 30

31 unless it can provide a compelling reason for the deviation, making it reversible error if the Board engages in: [a]ction other than a rule that is inconsistent with the agency s prior practice or precedents, unless the agency has justified that inconsistency by stating credible reasons sufficient to indicate a fair and rational basis for the inconsistency. Appellants argument that the Board acted arbitrarily or illogically cannot be correct it would mean any decision the Board made was arbitrary. The legislature clearly intended for agencies to observe their own precedent absent compelling changes in circumstance. Appellants have not provided such reasons. Appellants arguments in their Brief do nothing to establish that the Board acted arbitrarily or irrationally. First, Appellants misinterpret the Reid case. As a threshold matter, the court in Reid was not defining the term single site the issue before this Court. Second, it is clear when reading Reid in full that the Court s intent was to protect the jurisdiction of the Board against an unwanted encroachment from Muscatine County. In the present case, however, the Board did get to exercise its prerogative and was able to exercise its jurisdiction before the counties were involved. The Board chose to use that authority the authority to interpret statutes it implements and to issue declaratory orders on their meanings to advance the pro-renewable-energy policy of the legislature. While that resulted in 31

32 the Board giving some siting authority over certain wind projects back to counties, it is very different from Reid: the Board s own development of the gathering line standard was not an incursion into the Board s jurisdiction from which the Board needs judicial protection. Third, a key fact in the Reid court s finding is that the solid waste disposal site is an essential component of a coal-fired electric generator, justifying the expansion of the defined site. Reid, 357 N.W.2d at 590. Here, no one wind turbine is essential to the operation of another; each is an independent generator; there is no justification under Reid for including all turbines in the project in the defined site. Finally, the Reid Court concluded, the commission and district court were right in holding that the commission s authority superseded local zoning requirements. Reid should ultimately be understood as a case where the Iowa Supreme Court deferred to the determination of the Board. This Court should do the same in the present case. In addition, Appellants suggestion that the Board s rules found at 199 Iowa Administrative Code chapter 24 support their position is mistaken. First, the provisions cited by Appellants simply relate to the information to be included in an application to the Board for a generating certificate, they do not purport to define the meaning of single site in the statute, or address 32

33 who must seek such a certificate. Further, the majority of the provisions relied upon by Appellants obviously relate to traditional generating facilities, rather than wind energy facilities. And, where the provisions do relate to wind energy, those provisions actually support Appellee s position. For example, Appellants rely on 199 I.A.C s definition of the term site. It provides, Site means the land on which the generating unit of the facility, and any cooling facilities, cooling water reservoirs, security exclusion areas, and other necessary components of the facility, are proposed to be located (emphasis added). The definition itself does not appear to be directly applicable to wind energy projects. Wind energy projects do not involve the specific attendant facilities included in the definition, such as cooling facilities and cooling water reservoirs. More importantly, the definition indicates that a site is the land where the generating unit, singular, is located. Wind energy projects do not involve a single generating unit, but rather multiple generating units. Thus, if anything, the definition s guidance that land housing the generating unit is a site would indicate that each individual turbine in a wind energy project is a site a much smaller area than the expansive, miles-wide area that Appellants suggest constitutes a single site. 33

34 Similarly, Appellants reliance on 199 I.A.C. 24.4(1)(e) is misplaced. That provision requires that an application for a generating certificate include, a general description of the proposed facility and notes that For this purpose, a group of several similar generating units operated together at the same location such that segregated records of energy output are not available shall be considered a single unit. (emphasis added). As a threshold matter, segregated records of energy output are available from the electronic control systems for each individual turbine. Moreover, it is abundantly clear that wind turbines located miles from one another are not at the same location. Thus, 199 I.A.C. 24.2(1)(e) only further demonstrates that all wind turbines in a project are not located at the same location for purposes of considering the entire project a single site. In sum, Appellants attempt to rely upon provisions of Board rules unrelated to defining the term facility or single site, and which are largely inapplicable to wind energy projects, is without merit. Finally, it is important to note that in several places Appellants argument rests entirely on unsupported and unsubstantiated assertions that cannot be considered because they are based on facts not in the record and in many cases those facts are not factual at all. In some instances, these are mere exaggerations, for example, Appellants assertion that the

35 plus wind turbines would be crowded into a site when they will be spread out over 90 square miles. In some cases, they are irrelevant facts raised to stir emotions but wholly unrelated to the issue before the Court, like the description of possible environmental impact raised by state agencies (but which, Appellants fail to explain, are merely recommendations not requirements, are largely unrelated to this project some are in entirely different counties and all that are applicable have been addressed by the Appellees.) Much more troubling, however, are passages where Appellants arguments require a fact that has no record support and is not even accurate. On page 28 of their Brief, for example, Appellants claim with no support that, [i]n the case of a wind energy project the turbines on a single gathering line will not have segregated records of energy output. The alleged fact is central to Appellants argument, but has no support whatsoever in the record and is in fact untrue output of each turbine can be independently measured. Also on page 28 of their Brief, Appellants build an entire argument around the notion that it is harder to change the location of a few turbines on a gathering line to an alternative site within the 90 square mile footprint of a project than it is to move an entire wind farm to an alternative site. Again, despite it being critical to the argument, 35

36 Appellants cite no support for this proposition which defies all common sense it would be harder to consider many alternatives for a 90 square mile footprint. Again on pages 29 and 30, Appellants attempt to make an argument based on statutory language about transmission, and they assert that the term power transmission system refers to the line that connects the wind power plants to the utility grid. (See Appellants Brief at 29). Yet again, there is no citation, and no evidence this is correct. The line Appellants describe is generally called a gen tie (for generation tie) line, connecting generation resources to the interconnected electric grid. Appellants provide no evidence that power transmission system as that term is used in the statute means what Appellants claim in their creatively invented argument. Accordingly, Appellants misplaced reliance on Reid and the Board s Rules, and their reliance upon unsubstantiated facts having no record support and which are actually untrue, do nothing to establish that the Board s interpretation of the term single site is in any way clearly erroneous or irrational, illogical, or wholly unjustified. See Off. Of Consumer Advoc., 744 N.W.2d at 643. As such, the district court should be affirmed. 36

37 2. Appellants Argument Constitutes an Impermissible Collateral Attack on Zond. As an additional matter, much of Appellants argument appears to be an attack on the Board s decades-old Zond decision, not on the particular declaratory order issued below. See Appellants Brief at 31 (arguing, [t]he Zond decision was arbitrary, capricious, [and] unreasonable ). To the extent Appellant s argument is merely an attack on Zond, it constitutes an impermissible collateral attack on a prior, un-appealed agency decision. In Merivic, Inc. v. Gutierrez, 825 N.W.2d 327 (Table, text at 2012 WL ) (Iowa App. Nov. 12, 2012), the Worker s Compensation Commissioner approved an Administrative Law Judge s consideration of an injured worker s limited fluency in English in determining the worker s loss of earning capacity, which was consistent with prior agency precedent in Lovic v. Construction Products, Inc. When Merivic sought judicial review in its case, it argued that the Lovic decision, decided years earlier, was wrongly decided. Id.*2. The Court of Appeals rejected the appellant s argument, noting, On appeal, Merivic reiterates that Lovic was incorrectly reasoned and incorrectly decided. Merivic s argument amounts to an impermissible collateral attack on an unappealed agency decision. See Walker v. Iowa Dep t of Job Serv., 351 N.W.2d 802, 805 (Iowa 1984); Toomer v. Iowa Dep t of Job Serv., 340 N.W.2d 594, 598 (Iowa 1983). For that reason, we decline to consider it 37

38 Merivic essentially seeks to turn back the clock to the pre-lovic era when the commissioner accepted a claimant s failure to learn English as a basis for reducing the claimant s award. That ship has sailed. Merivic, 2012 WL at *2. The same is true in this case. Appellants do not argue that this case presents unusual circumstances or that it is distinguishable from Zond they merely argue that Zond was wrongly decided 20 years ago. As such, to the extent Appellants argument is an attack on Zond, it is an impermissible one. After 20 years of the Board consistently applying the 25MW-per-gathering line standard without challenge, 20 years of broad industry reliance on that standard, and 20 years of legislative acquiescence, the standard has become a broader policy than a single case, and any challenges should be made in a policy-making forum either a petition for rulemaking before the Board, or a proposed bill at the legislature. CONCLUSION The Iowa legislature tasked the Board with using its special expertise in utilities matters to apply Chapter 476A. This broad authority is demonstrated not only by the mandate to write rules for the chapter, but by the unusual step the legislature took in allowing the Board to waive provisions of the statute as the Board sees fit. When the legislature did not 38

39 provide a definition for single site, a term required for implementation of the statute, it is reasonable to conclude that the Board was vested with authority to interpret that term, which has unique meaning in the evolving context of different types of electric generation. As such, the Board s determination of the meaning of the term single site is entitled to deference. Regardless of the standard that applies, the Board considered numerous factors, in Zond and over the 20 years and more than 20 decisions since, balancing various policies in the Iowa Code, considering competing arguments about the size of a single site, seeing how other agencies limited the concept of a single site, applying its own expertise and experience with electric generation and how wind farms are structured, and looking to case law. This reasonable approach gave rise to the gathering line standard, which has been applied consistently over two decades, resulting in Iowa being a national leader in wind energy which has created jobs and driven investments in Iowa. The Board s well-developed policy, unchanged by the legislature, is entitled to deference by the Court and easily passes either the clearly erroneous or irrational, illogical, or wholly unjustifiable standard. Appellants arguments to the contrary fall well 39

40 short, and this Court should affirm the district court s order affirming the Board s well-reasoned declaratory order issued below. Respectfully submitted this 1st day of November, By: /s/ Bret A. Dublinske Bret A. Dublinske, AT Brant M. Leonard, AT FREDRIKSON & BYRON, P.A. 505 East Grand Avenue, Suite 200 Des Moines, IA Telephone: Facsimile: bdublinske@fredlaw.com bleonard@fredlaw.com ATTORNEYS FOR APPELLEES MIDAMERICAN ENERGY COMPANY AND PALO ALTO WIND ENERGY LLC 40

41 CERTIFICATE OF COST The undersigned certifies that the cost for printing and duplicating necessary copies of this Appellee Final Brief was $0. Respectfully submitted this 1st day of November, By: /s/ Bret A. Dublinske Bret A. Dublinske, AT Brant M. Leonard, AT FREDRIKSON & BYRON, P.A. 505 East Grand Avenue, Suite 200 Des Moines, IA Telephone: Facsimile: ATTORNEYS FOR APPELLEES MIDAMERICAN ENERGY COMPANY AND PALO ALTO WIND ENERGY LLC 41

42 CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE-STYLE REQUIREMENTS This brief complies with the typeface requirements and type-volume limitation of Iowa R. App. P (1)(d) and 6.903(1)(g)(1) or (2) because: This brief has been prepared in a proportionally spaced typeface using Microsoft Word version 2010 in Times New Roman, 14 point font and contains 6,429 words, excluding the parts of the brief exempted by Iowa R. App. P (1)(g)(1). Respectfully submitted this 1st day of November, By: /s/ Bret A. Dublinske Bret A. Dublinske, AT Brant M. Leonard, AT FREDRIKSON & BYRON, P.A. 505 East Grand Avenue, Suite 200 Des Moines, IA Telephone: Facsimile: bdublinske@fredlaw.com bleonard@fredlaw.com ATTORNEYS FOR APPELLEES MIDAMERICAN ENERGY COMPANY AND PALO ALTO WIND ENERGY LLC 42

43 CERTIFICATE OF FILING AND SERVICE I hereby certify that on the 1st day of November, 2018, a copy of this Appellee Final Brief was served upon the parties and upon the Clerk of the Supreme Court through the electronic filing of the same with the Iowa Judicial Branch Appellant Courts EDMS system. Respectfully submitted this 1st day of November, By: /s/ Bret A. Dublinske Bret A. Dublinske, AT Brant M. Leonard, AT FREDRIKSON & BYRON, P.A. 505 East Grand Avenue, Suite 200 Des Moines, IA Telephone: Facsimile: bdublinske@fredlaw.com bleonard@fredlaw.com ATTORNEYS FOR APPELLEES MIDAMERICAN ENERGY COMPANY AND PALO ALTO WIND ENERGY LLC 43