Posted by: Patricia Salkin | May 9, 2014

WI Appeals Court Upholds Wind Energy Rules Agreeing with Finding of No Impact on Housing Values

Wisconsin enacted Statute § 196.378(4g)(b), which directed the Public Service Commission (“Commission”) to promulgate rules that specified the restrictions a political subdivision may impose on the installation or use of a wind energy system. The rules included setback requirements that provided protection from any health effects from noise and shadow flicker, associated with wind energy systems.

A wind siting council was formed to advise the Commission of the impact on property values. In its report the wind siting council concluded there was no causal relationship between the siting of wind turbines and a measurable change in property value. The rules went into effect under the Wis. Admin. Code ch. PSC 128, Wind Energy Systems (“PSC 128”).

The Wisconsin Realtors Association, Wisconsin Builders Association, Wisconsin Towns Association, John E. Morehouse, Sr., and Ervin E. Selk (collectively, “WRA”) filed a lawsuit to declare PSC 128 invalid alleging it was not promulgated in compliance with statutory rule-making procedures under Wis. Stat. § 227.115(2). Section 227.115(2) stated, “If a proposed rule directly or substantially affects the development, construction, cost, or availability of housing, the department of commerce shall prepare a report on the proposed rule before it is submitted to the legislative council. The report “shall contain information about the effect of the proposed rule on housing. The Commission argued Wis. Stat. § 227.115(2) did not require a housing impact report because PSC 128 did not directly or substantially affect the development, construction, cost, or availability of housing. WRA argued PSC 128 “necessarily affects housing” because it: (1) required that wind energy systems be set back certain distances from residential properties; and (2) it limited the noise and shadow flicker that wind energy systems may produce. The circuit court concluded that no housing impact report was required. WRA appealed.

The court disagreed that the Wisconsin Stat. § 227.115(2) required a housing impact report only when a proposed rule, “Directly or substantially affects the development, construction, cost, or availability of housing in this state. The statute did not specify the entity responsible for making the initial determination whether a housing impact report is required, and that the Commission must make that determination. Here, the Commission considered voluminous evidence before submitting the proposed rules to the legislature without a housing impact report. In particular, the Commission relied on the recommendation of the wind siting council, which spent three meetings considering the impact. But, both entities clearly found that wind energy systems did not substantially affect property values. Based on that finding, the Commission reasonably concluded its proposed rules governing setbacks, noise, and shadow flicker would not directly or substantially affect the development, construction, cost, or availability of housing.

Moreover, under Wis. Stat. § 227.20(3)(a) and (c), the filing of a certified copy of a rule with the Legislative Reference Bureau created a presumption that the rule was “duly promulgated” and that “all of the rule-making procedures required by Wis. Stat. ch. 22 were complied with.” A certified copy of PSC 128 was filed. Further, WRA had not presented any evidence for rebuttal. Instead, WRA argued PSC 128 necessarily affected the development, construction, cost, or availability of housing because the subject matter of the rules relates to housing. The court stated that WRA interpreted the statute too broadly. Section 227.115(2) unambiguously stated a housing impact report was required only when a proposed rule “directly or substantially affects the development, construction, cost, or availability of housing in this state. Thus, a housing impact report was not required simply because the subject matter of a proposed rule related to housing, or because the rule tangentially affected housing in some way. The legislative history also supported this.

WRA also argued PSC 128 directly or substantially affected housing because it “seeks to limit, but does not totally protect housing from the effects of wind energy systems.” PSC 128 required a wind turbine to be set back 1,250 feet from any nonparticipating residence. However, another section of PSC 128 allowed local governments to require owners of wind energy systems to offer to pay nonparticipating property owners within one-half mile of a wind turbine up to $1,000 per year. WRA argued these payments would not be necessary if the setback prescribed were adequate to eliminate wind turbines’ negative effects. WRA also noted that, while PSC 128 regulated the amount of noise and shadow flicker produced, it did not completely eliminate the noise and shadow flicker discernible at nearby residences. The court stated that to demonstrate that a housing impact report was required, WRA had to show that the setback, noise, and shadow flicker restrictions imposed were so inadequate that the rules would directly or substantially affect the development, construction, cost, or availability of housing. WRA did not attempt to make this showing.

WRA cited three pieces of evidence that allegedly showed the Commission was aware when drafting PSC 128 that the rules would negatively affect housing. First, WRA cited an affidavit that they argued showed the Commission was aware and had concluded that evidence suggested negative impacts out to a half-mile from wind turbines. The court stated clearly there was “insufficient data” to show a decrease in value for properties located within one-half mile of wind turbines. Second, WRA cited a memorandum purportedly acknowledging that wind turbines create noise and shadow flicker that impacted housing, and that these impacts increased as the distance between turbines and residences decreases. But, here, the disputed issue was whether the setback, noise, and shadow flicker restrictions imposed by PSC 128 were insufficient. The memorandum did not address the issue. Third, WRA cited a report, which concluded the presence of wind turbines negatively, affected residential property values. However, the court stated that while this report concluded wind turbines generally have a negative effect on property values, it did not address whether PSC 128 directly or substantially affected the development, construction, cost, or availability of housing.

Therefore, the Judgment was affirmed.

Wisconsin Realtors Association v. Public Service Commission of Wisconsin, 2014 WL 1182687 (WI 3/25/2014)

The opinion can be accessed at: http://www.wicourts.gov/ca/opinion/DisplayDocument.html?content=html&seqNo=109502


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