It is not too often that Maryland’s highest Court is called upon to review the process for approval of facilities such as power plants. This month the Court of Appeals was called upon to do just that in an opinion called Accokeek, Mattawoman, Piscataway Creeks Community Council v. Public Service Commission.
The Court’s opinion indicates that Dominion Cove Point LNG (Dominion) operates a terminal for taking liquefied natural gas (LNG) off of tankers, converting it to gas and distributing it eventually to customers. Dominion decided to expand its operation to also take domestic gas and export it, which required it to build a power generating plant. As part of the approval process, Dominion had to convince the Public Service Commission to issue a Certificate of Public Convenience and Necessity to build the power plant, which included by law consideration of the environmental and economic impact of the new plant on the State and County.
The Council, whose purpose is to protect the local waterways, challenged the building of the plant and was allowed to participate in the administrative process. The PSC held a hearing and considered thousands of documents, and then approved issuance of the Certificate with almost 200 conditions.
They included that Dominion make payments totaling $40 million to the State’s Strategic Energy Investment Fund, which works to promote and develop alternative clean energy sources and reduce greenhouse gas emissions, as well as make a $400,000 contribution to the Maryland Energy Assistance Program to help low income citizens pay energy bills.
In an effort to stop construction of the plant, the Council challenged the legality of the PSC’s actions, and the Court of Appeals ultimately took the case. The Council argued that PSC could not meet its duties to determine that positive impacts of the construction and operation of the power plant would outweigh the negative by in essence placing a tax on the utility. The Court of Appeals held, however, that these payments were part of the regulatory process and not a tax.
The Court also noted that Dominion struggled to prove the economic benefits of the power plant standing alone to the State, since it would use all the power generated itself, but found that it was within the discretion and expertise of the PSC to look at the operation as a whole and approve it.
Thomas Patrick Ryan is a partner in the Rockville law firm of McCarthy Wilson, which specializes in civil litigation.