OH Court Rules Solar Panel Project Qualifies for Utility Exemption from Zoning Regulations

This post was authored by Olga Doukas, Touro University Jacob D. Fuchsberg Touro Law Center

In this matter, the Rush Township (“Rush”) Board of Zoning Appeals (“Rush BZA”) appeals a judgement rendered by the Ohio, Champaign County Court of Common Pleas’ (trial court) that held that the solar energy project proposed by Woodstock Solar Project, LLC (“Woodstock”) qualified as a public utility under the Ohio Revised Code, and was therefore exempt from review under the Rush zoning ordinance to the Court of Appeals of Ohio, Second District, Champaign County (appellate court).

Woodstock proposed to install solar panels on 209 acres of leased land located within Rush for the purpose of transmitting electricity first to the Dayton Power & Light substation and then to the PJM regional wholesale electric responsible for powering a dozen states ranging from Illinois to New Jersey. Upon completion, the project would generate a capacity of 40 megawatts, which can provide electricity to approximately 6,700 homes. As part of the process, the solar project will be regulated by the Federal Energy Regulatory Commission through PJM, and once the electricity is transmitted into the grid, Woodstock would have no control over where it goes or who uses it. The project will provide a public service in providing power for use by the public.

To proceed with the project, Woodstock submitted a “conditional use permit” application to for a “Public Service Facility” or, in the alternative, a “Light Manufacturing Facility” under the Rush Zoning Resolution. The Rush Zoning Inspector (“Herron”) rejected the application for the conditional use permit on the grounds that the project was ineligible for consideration by the Rush BZA because it did not fit the parameters of a conditional use permit.

Thereafter, Woodstock appealed Herron’s determination to the Rush BZA on various grounds, including that the solar project is a common law public utility and is exempt from the Rush zoning regulations pursuant to the Ohio Revised Code. The Rush BZA held a hearing on the application at which time Woodstock’s representatives presented testimony that the solar facility should qualify as a public utility that is exempt from the Rush zoning ordinance. Herron, and a then-state representative, Nino Vitale (“Vitale”) also testified at the BZA hearing. Vitale noted that if the power hits the grid, it will be available for public use.

Following the hearing, the Rush BZA denied Woodstock’s appeal. Woodstock appealed the decision to the trial court, which found that the Rush BZA decision “… was not supported by substantial, reliable, and probative evidence. Instead, there is substantial, reliable, and probative evidence from which to conclude that Woodstock is a public utility and therefore exempt from the Rush Township Zoning Resolution.” Rush appealed the trial court’s decision to the appellate court.

In affirming the lower court’s decision, the appellate court determined that Woodstock is a public utility and exempt from the Rush Zoning Resolution because the new solar project will provide a public service. In doing so, the appellate court explained that an entity provides a public service if it (1) provides essential goods or services to the public which has a legal right to demand or receive them; (2) provides the goods or services to the public indiscriminately and reasonably; and (3) the obligation to provide the goods or services cannot be arbitrarily or unreasonably withdrawn. Here, the record before the Rush BZA established that Woodstock would generate a substantial amount of electricity for public consumption where Woodstock has no control over how or where it’s distributed. Therefore, Woodstock could not discriminate against customers since the price would be determined by the one market that Woodstock sold into.

Moreover, the appellate court determined that Woodstock conducted its operations “in such a manner as to be a matter of public concern” because Woodstock would be taxed as a generator and public utility and regulated by the Federal Energy Regulatory Commission through the state PJM, and required approvals from U.S. Army Corp of Engineers, U.S. Fish and Wildlife Service, and the Ohio Department of Natural Resources.

For all the forgoing reasons, the appellate court determined that the lower court properly analyzed the “public service” and “public concern” factors and concluded that Woodstock’s solar project is a public utility under the Ohio Revised Code.

Woodstock Solar Project, LLC v. Rush Twp. Bd. of Zoning Appeals, 2023 WL4285056 (Ohio Ct. App. June 30, 2023).