Confirming Public Utility Variance Standard Applies to Solar Projects, Appellate Court Explains Application of Public Necessity to Renewable Energy Projects 

While several trial level courts had previously come to similar conclusions,[1] in Freepoint Solar LLC et al. v. Town of Athens Zoning Board of Appeals (“Freepoint”) the Third Department confirmed that solar energy projects are considered public utilities, entitled to application of  the lighter public utility variance standard, rather than the traditional (more restrictive) variance criteria set forth under New York Town, Village, and General City Law. First established under the 1978 Court of Appeals case, Consolidated Edison Co. of N.Y., Inc. v. Hoffman, 43 N.Y.2d 598 (1978) (“Hoffman”), this standard requires application of a “public necessity” test – requiring the public utility seeking a variance to demonstrate that the project is a public necessity “required to render safe and adequate service,” and that there are “compelling reasons, economic or otherwise, which make it more feasible” to modify or construct the project than to use alternatives.[2] And the public utility variance standard is further reduced where “the intrusion or burden on the community is minimal.”[3] 

We previously have written about the public utility standard and the Freepoint case in particular.[4] Importantly, the Freepoint decision rejected the local zoning board’s determination – which was accepted by the lower court – that there was no public necessity for the project because the State’s initial goals for solar development had already been met. Freepoint thus stands as the leading explanation of how public necessity is to be evaluated under the Hoffman standard, as applied to solar projects. The Appellate Division also rejected as “unworkable” the Town’s argument that the solar company must prove that there were no other parcels of land in the jurisdiction where solar was both allowed and feasible from a technical and engineering perspective.

The decision is significant for community solar developers, especially as suitable land located in zoning districts where solar facilities are a permitted use becomes more difficult to find.[5]  It’s also welcome news for the State, which has recognized the importance of community solar (and more rapid permitting of such projects) when it comes to achieving aggressive renewable energy targets established under the 2019 Climate Leadership and Community Protection Act (“CLCPA”).While uncertainty lingers as to whether the Legislature will pass any law to reduce permitting barriers for renewable energy facilities under 25 megawatts, the Freepoint decision, absent a decision from the Court of Appeals, will allow solar developers to more easily obtain necessary zoning approvals across the State.

Key Takeaways:

• Hoffman Applies to Community Solar Facilities – In years past, many municipalities were skeptical as to whether the public utility standard, as articulated under Hoffman, applied to variance requests for siting new community solar facilities. While appellate courts had applied the standard to wind projects, some communities rejected its application to solar, causing significant permitting delays for many solar developers. Freepoint ends that debate, making clear that the variance criteria set forth under New York Town Law, Village Law, and General City Law does not apply to community solar facilities. The public utility standard under Hoffman must be applied.
• Local Impacts Still Matter – As the Third Department recognized, per the Hoffman standard, zoning boards must apply the further reduced public utility variance standard when impacts to the local community will be minimal. While not dispositive, a determination under the State Environmental Quality Review Act (“SEQRA”) that the project will not have significant impacts to the environment or local community (“Negative Declaration”) can serve as a critical element of the underlying administrative record when a solar developer seeks approval under the Hoffman.
• Broader Impacts and Alignment with State Policy – Because solar facilities advance the State’s long-term renewable energy goals, they will generally be viewed as having broader, positive impacts. The wider environmental benefit of additional renewable energy resources, however, must still be balanced against impacts to the local community.
• Utility Capacity Maps – While a solar developer need not prove that it would be “impossible” to build a facility of a similar size on a parcel where no variances would be required, local utility capacity maps play a critical role. Where a developer can show that there are no overlapping areas where there is excess, available capacity on distribution lines and where solar facilities are a permitted use, a court is likely to be sympathetic to capacity/feasibility considerations.

For questions regarding the Third Department’s decision in Freepoint, please contact Daniel Spitzer (716.848.1420), Charles Malcomb (716.848.1261), Alicia Legland (518.433.2416), or any member of our Renewable Energy Practice.

Disclaimer:

This client alert is a form of attorney advertising. Hodgson Russ LLP provides this information as a service to its clients and other readers for educational purposes only. Nothing in this client alert should be construed as, or relied upon, as legal advice or as creating a lawyer-client relationship.

[1] This development follows years of advocacy from Hodgson Russ attorneys in administrative and trial court proceedings in favor of applying public utility variance standard, as established under Hoffman, to community solar facilities.  See, e.g., Delaware River Solar, LLC, et al. v. Town of Aurora Zoning Bd. of Appeals, Index No. 808123/2022 (Sup. Ct. Erie Cty. Nov. 7, 2022); see also Cipriani Energy Grp. Corp. v. Zoning Bd. of Appeals of the Town of Minetto, New York et al., EFC-2022-0043 (Sup. Ct. Oswego Cty. Apr. 12, 2022); RPNY Solar 5, LLC v. Zoning Bd. Of Appeals of Town of Stockport, EF012024022076 (Sup. Ct. Columbia Cty. June 21, 2024) (holding that the public utility variance standard applies to applications solely for area variances, rather than just use variances).

[2] Hoffman, 43 N.Y.2d at 610; see also Cellular Tel. Co. v. Rosenberg, 82 N.Y.2d 364 (1993) (broadening the definition of public utility, resulting in application of the public utility standard to siting facilities, rather than just modifications to or expansions of existing facilities, and to less “traditional” public utilities such as cellular telephone companies and renewable energy projects).

[3] Hoffman, 43 N.Y.2d at 610 (“where the intrusion or burden on the community is minimal, the showing required by the utility should be correspondingly reduced.”)

[4] Daniel A. Spitzer & Alicia R. Legland, The Intersection of New York’s Public Utility Use Variance Standard and the Climate Leadership and Community Protection Act, New York Law Journal (2023) available at https://www.hodgsonruss.com/newsroom/publications/The-Intersection-of-New-Yorks-Public-Utility-Use-Variance-Standard-and-the-Climate-Leadership-and-Community-Protection-Act.

[5] Notably, the Freepoint decision now applies across each of New York’s 62 counties.  See Mountain View Coach Lines, Inc. v. Storms, 102 AD2d 663, 664 (3d Dept 198) (the doctrine of stare decisis requires trial courts in other departments to follow precedents set by the Appellate Division of any department until the Court of Appeals or another Appellate Division court pronounces a contrary rule); see also 1 Carmody-Wait 2d, N.Y. Prac., § 2:342.