Opinion
19-P-537
02-07-2020
TOWN OF HOPKINTON v. DEPARTMENT OF PUBLIC UTILITIES & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Hopkinton LNG Corp. (company) is seeking to expand and modernize the liquefied natural gas (LNG) facility it has operated in Hopkinton (town) since the 1960s. To facilitate the project, the company filed a petition with the Department of Public Utilities (department) pursuant to G. L. c. 40A, § 3, requesting exemptions from the town's zoning bylaws. The town intervened in the proceeding before the department and opposed the company's exemption requests. After an evidentiary hearing, the department issued a comprehensive written decision concluding that the project was necessary to ensure the supply of natural gas to customers during the peak season, and that the benefits of the project to the general public outweighed any impact on the town caused by the zoning exemptions.
The town appealed from the department's decision to the Supreme Judicial Court pursuant to G. L. c. 25, § 5. A single justice of the Supreme Judicial Court transferred the appeal to this court pursuant to G. L. c. 211A, §§ 10 and 12. On appeal, the town claims that the department erred in failing to adequately explain its decision not to order the company to negotiate a host community agreement (HCA) with the town. The town also argues that individual zoning exemptions were not timely identified and that the requested exemptions were not supported by substantial evidence. We affirm.
Background. We summarize the background facts, which are largely undisputed. The company operates a "peak-shaving" facility, which means it received natural gas through pipelines, converted the natural gas into liquid, and stored it in large tanks until needed in the peak winter months. When needed, the liquid gas is revaporized and distributed to NSTAR Gas Company (NSTAR Gas) customers. When the facility was constructed between 1967 and 1974, it was surrounded almost entirely by farmland. Since then, the town's population has increased significantly and much of the area surrounding the facility has been developed with single-family homes. Hundreds of people now lived within one mile of the facility.
The facility has a critical role in meeting the winter gas supply needs of regional NSTAR Gas customers. The facility's liquefaction system, however, was obsolete and needed to be replaced to enable the company to reliably provide its customers with natural gas during periods of high demand. The expansion and modernization project proposed by the company included replacing and relocating the liquefier; adding five new buildings; installing a boil-off gas compression system; modernizing the truck loading area; installing a new fire detection and suppression system; and adding security fencing, lighting, and vehicle barriers.
The company's petition to the department requested individual exemptions from zoning bylaws regarding land use, height, setback from the street, lot coverage, on-site parking, and the town's authority to approve proposed site plans and design schematics. The company also requested a comprehensive exemption from all of the town's zoning bylaws, emphasizing the need for uninterrupted operation and timely completion of the project.
The town took the position that there were local remedies available in the form of variances or special permits and that the company was seeking to circumvent the town's zoning bylaws by going directly to the department. According to the town, the company's motivation for seeking the zoning exemptions was, in large part, due to the deteriorating relationship between the town and the company. In support of that argument, the town cited instances of the company's failure to share information with the town that impaired its ability to respond to incidents at the facility that might impact public safety. The company countered, in part, with evidence that it had met with town officials on numerous occasions to discuss the expansion project, and paid for an expert consultant (answerable only to the town) to review the details of the project and assess its impact on the town.
Six months after the hearing concluded, the department issued its eighty-seven page decision allowing the individual and comprehensive zoning exemptions. The department found that the project was necessary to ensure the supply of natural gas to customers during the peak season, and that the benefits of the project to the general public outweighed any impact on the town caused by the zoning exemptions. However, the department's allowance of the zoning exemptions was subject to a number of conditions addressing the town's concerns, including a limitation on the construction schedule to prescribed days and hours; preparation of a traffic mitigation plan; negotiation of a schedule for training of town firefighters on emergency responses at the facility; development of emergency response and evacuation plans in coordination with the town; and development of a community outreach program regarding the project.
As to the relationship between the company and the town, the department found that "the [c]ompany's engagement with the [t]own fell short of the consultations that the [d]epartment expects," but concluded that greater engagement would not have resulted in agreement on the requested exemptions.
Discussion. 1. Standard of review. Review of petitions under G. L. c. 25, § 5, is limited. "We will uphold the department's actions unless the [town] can demonstrate that they are flawed by an error of law, lack support by substantial evidence, are arbitrary or capricious, or suffer from one of the other defects spelled out in [G. L. c. 30A,] § 14 (7)." Wolf v. Department of Pub. Utils., 407 Mass. 363, 367 (1990), quoting Zachs v. Department of Pub. Utils., 406 Mass. 217, 219-220 (1989). The town's burden of proving the error is a heavy one, as "[w]e give great deference to the department's expertise and experience in areas where the Legislature has delegated to it decision making authority." Wolf, supra.
Evaluating petitions by public service corporations for exemption from local zoning bylaws is one such area. General Laws c. 40A, § 3, provides:
"Lands or structures used, or to be used by a public service corporation may be exempted in particular respects from the operation of a zoning ordinance or by-law if, upon petition of the corporation, ... the department of public utilities ... determine[s] the exemptions required and find[s] that the present or proposed use ... is reasonably necessary for the convenience or welfare of the public."
2. Requirement of an HCA. The town wanted all of its concerns regarding safety, traffic, noise, and the project schedule to be addressed in an all-encompassing HCA. Because the company and the town were unable to agree on the terms of an HCA, the town requested that the department order the company to negotiate a mutually agreeable HCA with the town. The department denied the request, reasoning that it had never mandated that parties enter an HCA and that it would not insert itself into private negotiations between the parties. The town argues that this "categorical rejection" of an HCA was "mistaken" and that the case should be remanded to the department for reconsideration of the HCA and a thorough explanation of its reasoning. We disagree.
When evaluating the company's petition, the department had "a wide range of discretion in appraising the public interest and in adopting reasonable policies, principles, and standards for its guidance." Holyoke St. Ry. Co., v. Department of Pub. Utils., 347 Mass. 440, 450 (1964). We agree that the department's wide-ranging discretion permitted it to consider an HCA between the parties as a condition of any zoning exemptions. We are not persuaded, however, that the department's failure to order the parties to negotiate an HCA, where they had failed to do so privately, was an abuse of that discretion.
The town argued that the magnitude of the project and the history of noncooperation between the town and the department required an HCA as "an enforceable legal framework." In support of that argument the town cited Russell Biomass, LLC, D.P.U. 06-60 (2008), and Sheffield Water Co., D.P.U. 10-159 (2011), for the proposition that the department's decision not to require an HCA was an arbitrary departure from its own practices. Those cases, however, involved either an agreement on a discreet issue (Russell Biomass), or an order enforcing the terms of a preexisting HCA (Sheffield Water). Here, there was no preexisting HCA and the town wanted the department to order negotiation of a broad HCA that would address all disagreements between the parties. While an HCA may have provided an efficient vehicle for conflict resolution, we see no abuse of discretion in the department's decision not to require the parties to enter such an agreement when they were unable to do so on their own.
General Laws c. 30A, § 11 (8), requires that the department's decision "be accompanied by a statement of reasons for the decision, including each issue of law or fact necessary to the decision." The department's reasoning in this case was twofold. First, it cited its prior decisions, Exelon West Medway, LLC, EFSB 15-01/D.P.U. 15-25 (2016), and NRG Canal 3 Development LLC, EFSB 15-06/D.P.U. 15-180 (2017), for the proposition that the department had never before incorporated an entire existing HCA as part of its order, much less ordered that an HCA be negotiated between the parties. In each of those cases the department considered an existing HCA between the parties and adopted some of the HCA's provisions. However, the department declined to incorporate and enforce the entire HCA, so as not to interfere in a private agreement between the parties. These cases supported the department's explanation that, as a matter of practice, it would not "insert itself into negotiations between the parties, require any particular agreement, nor will it enforce any such agreement ultimately reached by the parties." Second, the department stated that "many of the items that the [t]own recommends for an HCA are reflected in conditions to this order." Thus, the department reasoned that incorporation of an HCA was unnecessary as it had elected to address the town's concerns regarding the construction schedule, traffic, safety, and community outreach by adding conditions to the order of zoning exemptions rather than requiring the negotiation of an HCA. This two-part explanation was sufficient to meet the requirements of G. L. c. 30A, § 11 (8).
3. Comprehensive zoning exemption. The department has the authority to order a comprehensive zoning exemption as "reasonably necessary for the convenience or welfare of the public." G. L. c. 40A, § 3. That is, "[t]he department has the power to exempt land and structures in all respects." Planning Bd. of Braintree v. Department of Pub. Utils., 420 Mass. 22, 29 (1995). The department did so here, concluding that "[the company's] request for a comprehensive zoning exemption is warranted and necessary to avoid substantial public harm." On appeal, the town claims that this conclusion was not supported by substantial evidence. Again, we disagree.
In evaluating a claim of substantial public harm, the department considered a number of factors: (1) the need for the project in ensuring network power reliability, (2) the time sensitivity of the project, (3) whether the project is subject to the zoning laws of more than one community, (4) the extent to which the company has engaged with municipal regulators, and (5) the extent to which the affected communities support or oppose the requested exemption. The department found that factors one and two weighed in favor of the company, factors four and five weighed in favor of the town, and factor three did not apply. As to factors one and two, the department found:
"The Existing Facility is well past its design life. While the Existing Facility is operable, replacement equipment is getting more difficult to obtain, and some replacement parts may take as long as nine to twelve months to procure or reverse engineer. A loss of the facility for a prolonged period of time would have a significant detrimental impact on NSTAR Gas' ability to provide gas service to its customers, particularly during peak winter conditions, and this would clearly result in substantial public harm."
The town does not dispute that the facility is essential to maintaining the NSTAR Gas network or that the project is necessary to prolong the life of the facility. Rather, the town argues that the department erred in failing to consider and credit evidence that there had been no significant failures at the facility in the past ten years and that, therefore, the facility "is not on the precipice of failure." But "the [department] need not make detailed findings of all evidence presented to it, as long as its findings are sufficiently specific to allow us to review the department's decisions." Costello v. Department of Pub. Utils., 391 Mass. 527, 538 (1984). Mindful of the deference owed to the department's experience and expertise, Wolf, 407 Mass. at 367, we see no reason to second guess its weighing of the evidence regarding the time-sensitive nature of the project.
In light of our conclusion that the department's order allowing a comprehensive zoning exemption was supported by substantial evidence, we need not address the town's arguments regarding the individual zoning exemptions.
Decision and order of Department of Public Utilities affirmed.