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posted to KBC August 14, 2004

BEFORE THE ENERGY FACILITY SITING COUNCIL

OF THE STATE OF OREGON
 

Save Our Rural Oregon ("SORO") and its individual members, by and through its legal counsel, submit this Written Closing Argument. The applicant’s request for a site certificate to operate an 1,160 MW energy generation facility should be denied because the Oregon Department of Energy ("DOE") has misconstrued the applicable law and must conduct rulemaking pursuant to ORS 469.470(2) and ORS 469.501(1) before this application can be considered for approval. This application must also be denied because the applicant has failed to submit sufficient evidence to show, by a preponderance of the evidence, that the applicable review criteria are met. ORS 469.503(4).

Siting a facility pursuant to EFSC authority does not escape compliance with planning and land use laws. Notwithstanding the procedures of ORS 469 and OAR 345 Div. 22 that allow an application to by-pass the local land use review that might be unduly influenced by the politics of elected officials, the siting of this facility must comply with a full range of planning standards. DOE and the applicant treat the COB application as merely a utility siting case, ignoring the express mandate in ORS 469 and OAR 345 for compliance with statewide planning goals. ORS 469.503(4). Compliance cannot be measured without reference to those goals and to the land use statutes, rules, and case law.

DOE and the applicant fail to measure compliance of the proposed electrical generation facility against the analytical and evidentiary standards established by existing planning and land use laws, preferring to follow an inconsistent and illogical path through the utility siting statutes. The EFSC process allows an application to bypass local decision-makers, who may be pressured by parochial concerns. In return, EFSC evaluates whether the application must comply with the statewide planning goals and with the substance and process for exceptions if required.

ORS 469.503(4) does not contain any qualifying language to suggest that the standards for showing goal compliance, as implemented by the administrative rules, are any less or any different from the rigorous analysis required when a local government makes a land use decision. ORS 469.503(4) does not allow DOE or EFSC to put a thumb on the scales in favor of allowing the use, especially when the use is only conditionally allowed in EFU land. To the contrary, OAR 345-022-0000(a) requires that that the "facility complies with the requirements of the Energy Facility Siting statutes," including ORS 469.503(4). To ensure that compliance is established, the applicant must be held to its burden of presenting complete and reliable evidence that the land use standards of ORS 469.503(4) have been met.

The applicant has not met its burden. Throughout this contested case proceeding, SORO has presented uncontroverted evidence showing where the applicant’s analysis of land use issues is inadequate and frequently incorrect. Once the applicant’s evidence was challenged, the applicant had an obligation to respond with additional evidence to show compliance by a preponderance of the evidence. The applicant continually failed to produce this countervailing additional evidence. Instead, the applicant has "attacked the messenger" and avoided the questions by providing long-winded explanations of other issues.

This application cannot be approved until the evidence and legal analysis is measured against the applicable review criteria in a way that is consistent with land use planning practices and regulations. For the reasons explained in greater detail below, this application does not meet the standards and must be denied.

1. Which Standards Apply

   The Text of ORS 469.504(1)(a), (b), and (5) Requires Election Among Statutory Alternatives and For the Council to Determine Whether the Applicable Standards Have Been Met.

   ORS 469.503(4) requires that the applicant elect whether it would like review for compliance with the goals under ORS 469.504(1)(a), local county review, or (b), EFSC review for goal compliance. There is no dispute by any party to this case that the applicant has elected for EFSC to provide this review under ORS 469.504(1)(b). EFSC has three separate and distinct means to find compliance with the goals. These options are set forth in both ORS 469.504(1)(b) and OAR 345-022-0030(2)(b) as follows:

   (A) The facility complies with applicable substantive criteria from the affected local government’s acknowledged comprehensive plan and land use regulations that are required by the statewide planning goals and in effect on the date the application is submitted, and with any Land Conservation and Development Commission administrative rules and goals and any land use statutes directly applicable to the facility under ORS 197.646 (3);

   (B) For an energy facility or a related or supporting facility that must be evaluated against the applicable substantive criteria pursuant to subsection (5) of this section, that the proposed facility does not comply with one or more of the applicable substantive criteria but does otherwise comply with the applicable statewide planning goals, or that an exception to any applicable statewide planning goal is justified under subsection (2) of this section; or

   (C) For a facility that the council elects to evaluate against the statewide planning goals pursuant to subsection (5) of this section, that the proposed facility complies with the applicable statewide planning goals or that an exception to any applicable statewide planning goal is justified under subsection (2) of this section. (Emphasis supplied.)

   The applicant and DOE have continually asserted that it may apply the local substantive criteria under ORS 469.504(1)(b)(A) and when it encounters individual local standards that cannot be met, it will apply the single goal or rule that relates to the local standard or an exception under ORS 469.504(1)(b)(B). This approach is completely contrary to the rules of statutory interpretation set forth established in PGE v. Bureau of Labor and Industries, 317 Or 606, 611, 859 P2d 1143 (1993). The analysis begins by examining the text and context of the statute, with the text being the best evidence of legislative intent. A plain reading of ORS 469.504(1)(b)(A) requires compliance with the "applicable substantive criteria" consisting of the affected local governments acknowledged comprehensive plan and land use ordinances. If all of the "applicable substantive criteria" cannot be met, the applicant must comply with the "applicable statewide planning goals" or take an exception under ORS 469.504(1)(b)(B) or (C). The procedure for applying these standards is clarified in ORS 469.504(5), which states in relevant part:

   If the special advisory group does not recommend applicable substantive criteria within the time established in the department’s request, the council may determine and apply the applicable substantive criteria under subsection (1)(b) of this section or determine compliance with the statewide planning goals under subsection (1)(b)(B) or (C) of this section.

   Both the plain language of the compliance standard and the procedure set out above require compliance with the local substantive criteria or the goals plus necessary exceptions. Use of the disjunctive "or" to separate these three provisions shows that compliance cannot be established by complying with some of the local standards and then taking an exception, without first applying any of the goals.

   ORS 469.504(1)(b)(B) and (5) require compliance with the goals or an exception to applicable goals. The applicant has not shown compliance with any of the goals. Rather, when the applicant cannot meet the local standards, it has simply taken an exception assuming that the affected goal cannot be met and that the other "applicable statewide planning goals" need not be considered. This approach is contrary to language which requires compliance with all of the "applicable goals." If the legislature intended that compliance could be established by applying only the goal that could not be met by the local standard then ORS 469.504(1)(b)(B) would have expressly limited application of the planning goals to just the one or more goals that are related to the local standard that cannot be met. Similarly, rather than requiring "compliance with the statewide planning goals," ORS 469.504(5) would require compliance with only those statewide planning goals where the underlying local code or plan provision cannot be met. This additional qualifying language does not appear in either of these provisions. Compliance with ORS 469.504(1)(b)(B) cannot be established unless all of the statewide planning goals are considered.

   The ORS 469.504(1)(b) criteria do not require compliance with all of the local code or plan provisions or the statewide planning goals; the standard requires compliance with those provisions that are "applicable." In order to determine which standards are "applicable," OAR 345-022-0030(3) states:

   If the special advisory group does not recommend applicable substantive criteria, the Council shall decide either to make its own determination of the applicable substantive criteria or to evaluate the proposed facility against the statewide planning goals. (Emphasis added)

   With this regulation, the Council has an express obligation to "make its own determination" of which standards apply. Even in the face of numerous requests by SORO for the list of applicable standards, neither the Council nor the DOE have made any formal determination of which standards apply. To the contrary, the applicant has been allowed to choose which standards it wants to address based on those where it can show compliance. For example, Goal 13 of the County Comprehensive Plan contains policies dealing with energy conservation. Nothing in the application or the Proposed Order responds to these applicable criteria. Allowing the applicant to dictate which local code criteria are "applicable" is contrary to the express language of the rule which requires the Council or DOE to "make its own determination," which SORO asserts requires rulemaking to establish those standards before the hearing begins, which EFSC has not undertaken.

   ORS 469.504(1)(b) is plain in its requirements: the Council and DOE can either require compliance with all of the local standards or, in the alternative, compliance with all of the goals or exceptions. Since the applicant cannot comply with the all of the local standards, it must apply all of the goals and, where compliance with those goals cannot be established, an exception must be justified. The applicant has not applied any of the goals in this case. Further, the local substantive criteria cannot be considered until DOE and the Council determines which are "applicable" through rulemaking. Until the "applicable" criteria are identified and the compliance with all of the goals established, this application cannot be approved.

   Applicable Goal and Plan Criteria Were Not Considered

   Since the Council and the DOE failed to determine which local criteria apply to this application, the applicant was free to pick and choose which standards to address, avoid standards that it could not meet and take exceptions to only a limited number of these unmet standards where the exception appeared to be required. This approach was incorrect for a number of reasons.

   Exceptions pursuant to ORS 469.504(2) are not permitted when applying the local substantive criteria pursuant to ORS 469.504(1)(b)(A). If the local standards are applied and cannot be met, the applicant’s only option is to apply the goals and take exceptions as needed as allowed by ORS 469.504(1)(b)(B) or (C). In its response brief, the applicant complains that complying with SORO’s interpretation of ORS 469.504(1)(b)(B) would impose the impossible task of requiring EFSC to make individual goal findings for each goal when only one applicable local criterion is not met. Local governments are required to make goal findings every time they amend their comprehensive plan, change a zone or need to take an exception to a goal to conditionally allow a use such as an energy generation facility. ORS 197.732(8). ORS 197.175(2)(a), 197.180 and Goal 2 call for compliance with the local plan and the goals not just the goal where an exception is requested. If counties and cities, both big and small, are required to make plan and goal findings, the applicant has no legal or logical basis to suggest that EFSC is unable or should not be expected to do the same.

   Since there is no dispute that exceptions are necessary to find compliance in this case, the applicant should have directly applied all of the goals. Goals 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 13 and 14 are applicable. Exceptions were requested to be taken in these proceedings to Goals 3 and 4; however, exceptions must also be taken to Goals 11 and 14.

   In addition, even if the applicant could apply the local plan criteria pursuant to ORS 469.504(1)(b)(A) and take exceptions without applying the goals, the applicant has failed to address all of the applicable substantive criteria. For example, the applicant has not taken an exception pursuant to OAR 660 Div. 04 et seq. as required by Klamath County LDC §54.030(M) when a commercial utility facility takes up more than 20 acres of non-high value farmland. A reasonable person would be unlikely to dispute that this requirement is a local standard that is "applicable" to a proposed energy facility use.

   Further, the applicant had an obligation under ORS 197.646 to show which new statutes, goals and rules are applicable since the plan was acknowledged in 1985. The application does not evidence any consideration of this issue and compliance based on ORS 469.504(1)(b)(A) cannot be determined until this issue is addressed. See ORS 183.450(2) and OAR 137-003-0040(3)(a). For example, Goal 5 currently requires that groundwater resources be inventoried and protected for future use. OAR 660-015-0000(5). The County does not maintain an inventory of groundwater resources. Since the LDO does not adequately protect groundwater resources from conflicting uses, Goal 5 along with the other Statewide Planning Goals must be applied to this application pursuant to ORS 469.504(1)(b)(B).

   ORS 469.504(1)(b) requires compliance with either the local standards or the goals. The applicant has failed on both fronts to show any evidence and DOE has not adopted any findings to establish that either all of the goals or all of the local standards are met.

   The Exceptions Process

   Exceptions are triggered by the proposed use under both ORS 197 and 469. First, there is the special energy generation facility siting exception, ORS 469.504(2). This exception applies whenever goal compliance cannot be established under ORS 469.504(1)(b)(B) or (C). This exception contains the following language:

   Notwithstanding the requirements of ORS 197.732, the statewide planning goal pertaining to the exception process or any rules of the Land Conservation and Development Commission pertaining to an exception process goal, the council may take an exception to a goal if the council finds: (criteria omitted)

   As explained further in issue 2 below, it is not at all clear how the ambiguous term "notwithstanding" is used to further limit or expand the requirements for taking an exception. It is also impossible to determine without further rulemaking by the Council how the Goal 2 exception criteria (ORS 197.732 and OAR 660 Div. 04) can be used to guide interpretation of the ORS 469.504(2) criteria when the plain language suggests that looking to Goal 2 exception standards may be inappropriate.

   The application takes exceptions to Goals 3 and 4, triggered by taking farm and forest lands out of productive farm and forest uses. The applicant has an additional obligation to take exceptions to Goals 11 and 14 because this proposal allows a use that is not scaled to serve a rural population and is not otherwise permitted on farm and forest land. Rather, the proposed 1,160 MW energy generation facility is sized to serve an urban population equivalent to a city the size of Portland. Although the exact amount of land taken out of farm and forest use is less than clear, construction of this facility will result in the permanent loss of as much as 120 acres of useable farmland. Additionally a building of this size and operation will add significant additional cost to the public services in the area such as providing fire and safety protection to a facility that is a substantial distance from the nearest fire station.

   The second exception is the state land use goal exception set forth in Goal 2, OAR 660 Div. 04 et seq., and ORS 197.732. This exception applies whenever an agency or local government amends a comprehensive plan or allows a use that is incompatible with the acknowledged plan and land use regulations. ORS 197.180, 197.732(8).

   The Klamath County LDC §54.030(M) requires compliance with OAR 660 Div. 04 whenever a commercial utility facility takes up more than 20 acres of non-high value farmland. See also 660-033-0130(22). This local standard provides a separate exception that the applicant did not request, even though it was required in order to comply with the "applicable substantive criteria" standard. The requirements of ORS 197.732 and the exception process rules and goals referenced in ORS 469.504(2) are all directed to finding direct compliance with the goals. Application of the goals and taking exceptions to those goals are entirely irrelevant under ORS 469.504(1)(b)(A), as only the local code and plan standards matter. LDC §54.030(M) is unambiguous in requiring application and compliance with OAR 660 Div. 04. Compliance with this standard is required even for a use that is conditionally allowed on EFU land. ORS 215.283(2).

   When a local substantive criteria and a state statute impose conflicting requirements, the Council must resolve the conflict "consistent with the public interest." An overwhelming majority of the public testimony in this proceeding is opposed to locating this facility on high value farm and forest lands, suggesting that the public would prefer a location within an urban industrial area that is more suited to accommodate this use. Requiring compliance with OAR 660 Div. 04 does not mean that the facility will not be constructed, it simply imposes additional steps for compliance, such as an alternative site analysis, that the applicant has consistently rejected, offering instead a misleading analysis of the decision in Teledyne Wah Chang Albany v. City EFSC, 298 Or 240, 692 P2d 86 (1984).

   The express language of the local code requires compliance with OAR 660 Div. 04. This is an applicable substantive criterion under ORS 469.504(1)(b)(A) that is not limited by the goal compliance exception standard of ORS 469.504(2). Furthering the public interest of those directly affected by this facility requires consideration of OAR 660 Div. 04. For these reasons alone, this application must be denied.

2. Rulemaking

Rulemaking is required before the Council or DOE can establish compliance with policies and criteria of ORS 469.504(1)(b)(B) and (2). ORS 469.501(1) mandates that the Council, in performing its duties, including issuing site certificates, "shall adopt standards for the siting, construction, operation and retirement of facilities." In Application of Portland General Electric Co. (Marbet v. Portland General Electric), 227 Or. 447, 561 P2d 154 (1977), the Supreme Court considered the extent to which the Council must adopt rules or standards that the applicants for a site certificate must meet. As explained in greater detail in SORO’s initial brief (incorporated by this reference), the Marbet court found that a requirement that the applicant have the requisite "qualifications" to operate the facility did not contain sufficient policy making direction so that the parties can determine if the standard is met. (See initial brief pages 8-10.) The court said:

Similarly, in Megdal v. Oregon State Bd. Of Dental Examiners, 288 Or. 293, 605 P2d 273 (1980), the court held that establishing the meaning of the term "professional conduct" required rulemaking to establish how far "professional conduct" extends and whether it is directed to the patient only or to third parties.

The applicable review and exception standards of ORS 469.504 are identical to the ambiguous policy standards considered in Marbet and Megdal. There is nothing contained within the facility siting statutes that provides any further guidance about what type of "reasons" or how many "reasons" will provide an adequate justification for taking an exception. Even after applying the text, context and legislative history of the reasons exception language, the applicant, the opponents, and DOE are not in any better position to determine what type of reasons, the intensity of the reasons, or the number of reasons that must be presented in order to justify a reasons exception.

Further, there is nothing in the energy facility siting statutes or rules that suggests that DOE should look to ORS 197 and the LCDC rules for clarification of these standards. The original bill enacting the ORS 469.504 land use review standards, SB 1016, incorporated the exception requirements of ORS 197.732(1), including the reasons exception, by reference. However, as quoted above, the current version contains the "notwithstanding ORS 197.732" language. This revision suggests that the legislature did not mean to include the goals, the exception statute or LCDC’s interpretive rules as guidance for interpreting the exception standards of ORS 469.504(2). In fact, the legislature specifically rejected this approach relying instead on EFSC’s more general obligation to undertake rulemaking under ORS 469.570(2) and ORS 469.501(1).

EFSC has an express obligation to adopt rules to set forth policies and priorities for how to apply its statutes, include the reasons exception of ORS 469.504(2). ORS 469.570(2) and ORS 469.501(1). The EFSC rules for siting energy generation facilities can be found in OAR 345-022. These rules provide no further guidance on how to interpret and apply the statutory land use standards because they simply restate the language of the statute. Certainly EFSC has the staff and structure to allow it to adopt rules either establishing the requisite measuring stick standards or setting forth which other agency rules it will rely on to provide the missing standards. For this reason, SORO requests that this process be held in abeyance until rulemaking is completed and EFSC determines how to apply the land use standards in ORS 469.

III. Exceptions to Resource Goals

The applicant continually asserts that because the proposed use is allowed on EFU land pursuant to ORS 215.283, it does not need a "use" exception and therefore, does not trigger the policy concerns that would justify compliance with the more stringent ORS 197.732, Goal 2 and OAR 660 Div. 04 exception requirements. This argument is unfounded, first, because the use is not allowed outright but through a conditional use permit review, and second, because the size of the facility cannot be separated from the use for requiring a Goal 2 exception. The ORS 215.283 conditional authorization for this use has no relevance to whether a goal exception is required. Brentmar v. Jackson County, 321 Or 481, 900 P2d 1030 (1995); Lane County v. LCDC, 325 Or 569, 942 P2d 978 (1997)(An LCDC rule can bar or otherwise limit a use even though it is a use that is allowed by ORS 215.283).

OAR 660-033-0120 sets out the list of uses that are permitted in areas that are designated EFU and protected under Goal 3. Commercial utility facilities are allowed pursuant to the limitations set forth in OAR 660-033-0130(17) and (22) which requires an OAR 660 Div. 04 exception whenever construction of a commercial utility facility removes more than 12 acres of high value farmland and/or more than 20 acres of non-high value farmland.

The fact that an OAR 660 Div. 04 exception is required suggests that once the size of the facility exceeds a relatively small-scale facility suitable to serve a sparsely populated rural area, it is no longer a use that is consistent with the farm and forest goals. The acreage limitation is a threshold, and beyond the threshold the use is assumed to have impacts significant enough to require review through the exception process. The land displacement from this facility is much larger causing removal of as much as 120 acres of farm, forest or wildlife resource protection lands. This facility too large in size, scale and operational characteristics to fit smoothly within the rural landscape of Klamath County. With a generation capability of 1,160 MW of electricity it will be able to serve a population equivalent to the City of Portland. This is an urban industrial use that should more appropriately be located in an industrial zone within an urban industrial area.

Notwithstanding the plain evidence that this facility is not a rural use and exceeds the acreage limit to be allowed outright on EFU land, the applicant and DOE still refuse to accept that an exception under OAR 660 Div. 04 is necessary before the use, itself, can be allowed. The applicant continues to insist that it is the size of the facility that requires the exception rather than the use. However, it is the size of the facility that triggers the exception. LCDC determined the threshold amount to which power generation facilities should be allowed on EFU land. The proposed facility exceeds that threshold amount and an OAR 660 Div. 04 exception is necessary.

IV. The Reasons Exception

Should the Council decide that it is proper to review this application pursuant to the limited ORS 469.504(2) exception criteria, and without waiving any of SORO’s argument that rulemaking is required to establish standards to determine compliance, the applicant’s showing that these criteria are met is inadequate. ORS 469.504(2)(c) provides the relevant criteria for taking an exception based on the need for this facility and provides:

The primary basis for the applicant’s assertion that "reasons" justify the proposed location is that the operational demands of this facility are so unique that it must be located on EFU and forest protected lands. SORO has continually argued and presented valid and reliable evidence challenging these conclusions. SORO did not present this evidence as an alternative site analysis. Rather, the list of locations proximate to a water source, power transmission lines, and a major natural gas pipeline was submitted to undermine the applicant’s continual assertions that the reasons exception is justified by the "unique" and "critical" resources needed for facility operations. In short, if there are other locations where the so-called unique resources are available, then the resources and the site are not unique.

The relatively small demand for water, the availability of utility lines and transmission substations, as well as natural gas pipelines all suggest that these resources are not unique or critical to dictate the location that is proposed. Exhibit 1 to SORO’s Initial Brief. To the contrary there are a number of other locations that would provide the same "unique nexus" of resources that can be found at this particular site. The alternative resource analysis contained in Exhibit 1 to SORO’s Initial Brief was the only expert testimony submitted into the record addressing whether the resource needs for this facility are unique. SORO’s evidence on this point was not challenged by the applicant or the DOE.

The burden of presenting evidence and facts that review criteria are met rests on the applicant. ORS 183.450(2). The evidence included with SORO’s initial and response briefs challenges the applicant’s assertions and arguments that the reasons standard is justified for taking an exception. See pages 11-16 and 4-5. The applicant has neither proffered any counter-evidence, nor any reasonable justification to not consider this directly relevant evidence. For this reason, the application must be denied.

V. ESEE Evaluation

As quoted above, the second criteria for taking an ORS 469.504(2)(c) needs exception requires identification of the "significant environmental, economic, social and energy consequences" and a determination that "adverse impacts" are "mitigated." Again, without waiving any argument that this criteria does not contain an adequate "yardstick" to determine the relationship between the consequences or the "adverse impacts" or to determine what sorts of "mitigation" efforts are sufficient, and also without waiving any argument that exceptions to goals 11 and 14 are also required to accommodate this urban-scale industrial use, the evidence presented by the applicant is not sufficient to deem this criteria satisfied.

In Exhibit 7 to its initial brief, SORO submitted an ESEE analysis identifying all of the "important consequences" to allowing this use. This ESEE analysis was composed from statements made by residents who live in the Langell Valley near this facility that will be directly affected by the proposal. The applicant was unable to submit any additional testimony from residents who will be forced to live with and do business around this facility. Farmers, ranchers and other rural dwellers within the Langell Valley are the most qualified to testify about how this facility will affect their quality of life and their farms and ranches, which are both their businesses and their way of life. This ESEE analysis was compiled by Leslie Ann Hauer, the only land use planner to participate in these proceedings, and who has experience in drafting and analyzing ESEE analyses for rural land use proposals.

The evidence cited in response to the residents’ contentions was not responsive to the residents’ identified concerns. Mr. Smesrud and Mr. Mader are soil and natural resource scientists who do not live in the Langell Valley, have never farmed in the Langell Valley and have no expertise to speak about the social activities or quality of life standards within the Langell Valley. Similarly, Mr. DeLacy is a real estate appraiser in Portland, Oregon. Although he may be able to speculate about how construction of this facility may impact property values, he has no experience with local conditions as does Roger Hamilton or others who have direct knowledge of the unique value, and values, of their properties. Another case in point is the traffic study: The transportation impact analysis looked only at LOS at major intersections but fails to consider the operational aspects of the area’s roadways, which include cattle drives and frequent movement of slow speed farm equipment between farm fields. The engineers, scientists, and appraisers do not have the expertise to speak about the actual and emotional damage that construction of this out of scale and asynchronous facility will have on the Langell Valley or its farm and forest operations.

SORO finds ludicrous the applicant’s and expert’s repeated assertion that the area is "remote" and "sparsely" populated, as if the area was merely cheap land just waiting for industrial development. The area is sparsely populated as a matter of policy, the state’s policy for preserving agricultural land embodied in Goal 2. And, even if the population is sparse, it does not logically follow that a major industrial facility, sufficient to generate power for the Cities of Portland or a significant portion of Los Angeles, will have merely an insignificant impact on their way of life, their livelihood, and their community within the Langell Valley.

The applicant’s response that public services are sufficient to support this facility is also non-responsive to SORO’s argument that the facility is out of scale with its location and surrounding facilities, causing negative social impacts to the residents. Issues of scale and compatibility are within the unique expertise of land use planners. The ESEE analysis submitted by SORO was drafted by a planner who has 25 years of experience, including work with rural communities to accommodate development. See Aff. Hauer to SORO’s Response Brief. The land use portion of the application, Exhibit K, was primarily authored by an engineer whose resume includes significant experience with energy generation facilities and no demonstrated experience at all in understanding or applying land use laws.

Generally speaking, engineers and scientists are more concerned with how something should be done than considering whether it should be done. In planning, the question of whether something should happen is central: what are the policies, goals, statutes, ordinances, guidelines, rules, etc. that provide the framework for the decision? Further, planners are experts at evaluating and integrating the evidence from the parties against the standards to determine if the standard is met. These are not factors that usually concern an engineer, and that lack of understanding is evident throughout the applicant’s consideration of the planning requirements and issues. This lack of expertise is most evident in areas where planners dig deeper into the social impacts and culture of a community, to understand how it operates and how a proposed facility like this will have a significant impact on its future.

At no time did the applicant challenge the expertise of Ms. Hauer, SORO’s planner who assisted in reviewing the application, drafted a more complete ESEE analysis, and submitted an affidavit stating that the applicable review criteria were not met. Without challenging or adequately countering the evidence submitted by SORO, the applicant has not met its burden of showing that it has identified the "significant ESEE consequences" or that the "adverse impacts can be mitigated."

VI. Compatibility Evaluation in Exceptions

The final criterion for taking a reasons exception is that the facility will be compatible with adjacent uses. Again, SORO responds to this issue without waiving its belief that rulemaking is required to provide meaningful boundaries for this compatibility requirement or an express adoption of the LCDC compatibility standards plus case law. Additionally, this response does not alter SORO’s belief that exceptions are still required to respond to the failure to meet Goals 11 and 14. The case law for finding compatibility with adjacent uses requires (1) describing the uses adjacent to the proposed exception area, and (2) explaining why the proposed use in the exception is or will be rendered compatible with those uses. Jensen v. Clatsop County, 14 Or LUBA 775, 784-786 (1986); Loos v. Columbia County, 16 Or LUBA 528, 539-541(1988).

For the reasons explained above, the fact that the area is currently a "remote" location and that the population is sparse does not nullify any compatibility obligations. The number of people living in an area has no impact on the quality of the surrounding farmland, the resident wildlife populations, and whether or not the facility will be compatible with these existing uses.

The application and the Proposed Order fail to specifically identify adjacent land uses, natural resource and resource management or production practices; and do not explain what mitigation measures will be taken to offset these impacts. The findings must explain what the adjacent uses, natural resources, and management or production practices are, and then explain why or how the proposed use is compatible. Concerned Citizens for the Upper Rogue v. City of Shady Cove, 33 Or LUBA 70 (1997). The Agricultural and Forest Practices Impact Mitigation Plan (Attachment K-5) speaks generally about the agricultural uses on surrounding properties but it does not specify the specific uses of specific parcels and how individual mitigation efforts will offset these conflicts.

For example, the affidavit of Mr. Don Rajnus, attached to SORO’s initial brief, explained that the soils on the COB property were of such high quality that they were suitable for growing seed potatoes. This is not low-value farmland as Mr. DeLacy, a non-farmer, suggests. Rather it is a high value crop returning as much as $3,000 to $5,000 per acre. However, seed potatoes are highly susceptible to infestation by nematodes, which often occurs with irrigation projects similar to the irrigation system proposed as part of this facility. The applicant neither challenged Mr. Rajnus on this evidence, nor did it identify this as a potential conflict and propose any mitigation.

For these reasons, the applicant’s compatibility analysis is incomplete and the application must be denied.

VII. Facility Proposes an Urban Use on Rural Lands

The electricity generation facility proposed by this application will convert rural land to an urban use. If a use is urban in nature, a local government or other reviewing body must either take an exception to Goals 11 and 14 or expand its UGB to accommodate the urban use. With respect to Goal 11, see Gisler v. Deschutes County, 149 Or App 528, 945 P2d 1051 (1997); DLCD v. Lincoln County, 144 Or App 9, 925 P2d 135 (1996); and Hammack v. Washington County, 89 Or App 40, 747 P2d 373 (1987). With respect to Goal 14, see 1000 Friends of Oregon v. LCDC (Curry County), 301 Or 447, 474-475, &24 P2d 268 (1986); Shaffer v. Jackson County, 16 Or LUBA 871,873 (1988). As explained in Issue Number 1 above, the Department has an obligation to apply local land use regulations and LCDC rules and goals. ORS 197.180. LDC §54.030(M) requires an OAR 660 Div. 04 exception for a utility facility that takes up more than 20 acres of non-high value farmland. See page 7 infra.

Although neither statutes nor rules define urban or rural, generally a use is considered "urban" when it operates to serve an urban rather than a rural population. Hammack v. Washington County, supra (construction of a 15,000 person capacity amphitheater plus parking spaces is an urban use); Murray v. Marion County, supra. (Adding 10 acres of rural land to an urban airport facility is an urban use).

Further, since operation of this facility requires additional elements that are not included in the uses conditionally allowed under ORS 215.283, an exception is required before these uses can be allowed. For example, operation of this facility will require the construction of access roads as well as laying miles and miles of gas and electric lines to connect this facility to the regional power grid system. There is no evidence to support any assertion that these lines are "necessary to support a public service" as set forth in ORS 215.298(1)(d). There is no "public service" component to this privately funded and operated facility. Since these transmission line and access roadway uses are not permitted, goal 3 and 4 exceptions are required before the use can be approved.

VIII. Goal 5 Issues.

Not only does SORO believe that a PAPA analysis is required before it can "amend" or "enhance" the existing deer winter range habitat as explained in great detail in its initial brief, the inconsistency between the County’s goal 5 inventory and the current goal 5 rule requires the DOE and the Council to revisit Goal 5 to determine that all natural resources are adequately protected.

DOE and the Council have an obligation to identify where any LCDC rules and goals vary from the County’s acknowledged plan and regulations. ORS 469.504(1)(b)(A) and ORS 197.646(3). Where those standards differ, the goals and rules must be directly applied. Nothing in the record shows that the DOE or the applicant conducted such comparisons. Rather, it is clear from the language of OAR 660-015-0000(5) that the County does not maintain an inventory of, for example, groundwater resources. It makes no difference whether the applicant believes that a minimal amount of groundwater will be used by this facility. The applicant is in no position to make such a determination until it has inventoried the extent of the resource and can comply with PAPA amendment requirements contained in OAR 660-016 et seq.

Finally, SORO has submitted an affidavit from a professional planner stating that it was her professional opinion, based on experience in interpreting and applying the PAPA rules that the applicant "fails to satisfy the requirements of Goal 5 and the Goal 5 PAPA rules." The applicant fails to point to any competent evidence of any of its experts to challenge this conclusion. Without any countervailing or impeaching evidence, the applicant has failed to show that the applicant has met its burden proving that the Goal 5 standards are met.

For these reasons, this application must be denied.

IX. ORS 215.296(1) is not Met.

A commercial utility generation facility use is only allowed after the Council concludes that the use complies with the requirements of ORS 215.296. ORS 215.296 requires a finding that the use will not:

The case law dictating the standard for compliance with ORS 215.296(1) is not challenged by the applicant in this case; this standard can only be achieved when the application (1) describes, with specificity, the surrounding area and identifies the farm and forest practices occurring on those surrounding lands; (2) explains why the proposed use will not force a significant change in those practices and (3) explains why the proposed use will not significantly increase the cost of those practices. Schellenberg v. Polk County, 21 Or LUBA 425 (1991).

Although the Proposed Order and the mitigation plan submitted by the applicant does identify, in the most general terms, the types of agricultural uses occurring on lands surrounding the subject property, it does not identify with any specificity the size, intensity or location of the activities occurring on the surrounding lands. For example, Mr. Rajnus’ seed potato crop and the occasional cattle drives are not even mentioned. PO 252 and Application Appendix K-5. Without specific identification of the agricultural uses and practices, it is not possible to evaluate whether the impacts from noise, light, water consumption, traffic, or other impacts will force a significant change in, or cost of, farm and forest practices for the surrounding sites and uses. Berg v. Linn County, 22 Or LUBA 507, 510-511 (1992). See also Sanders v. Yamhill County, 34 Or LUBA 69 (1998). Additionally, nothing in Proposed Order or the application quantifies the level of light, noise, weed intrusion, or chemical contamination that is expected to occur from the construction and operation of this facility. Schellenberg supra. This application cannot be approved until the applicant identifies each parcel, the use occurring on each parcel and explains, with specificity, why this facility will not impact the specific use. The applicant’s approach to identifying conflicts is entirely too general to be legally sufficient to satisfy this standard.

Rather than holding the applicant to its obligation to provide evidence that construction and operation of this facility will not force a significant change in farm and forest activities, the Proposed Order impermissibly shifts the burden of proof to the opponent when it finds: "The Department does not have evidence that the energy facility would significantly increase the cost of specific agricultural practices on nearby lands." PO 253. The Department does not have this evidence because the applicant was not required to map the location and intensity of the activities occurring on surrounding lands and to consider how this facility could impact those activities.

The affidavits of Roger Hamilton, Donald Rajnus, Diana Giordano and Lyn Brock, attached as exhibits 11, 14, 15, and 16 respectively, show that this facility will have significant adverse impacts on rural life in the Langell Valley. This testimony was neither challenged by a farmer or rancher of similar experience, nor impeached during cross-examination by the applicant. This evidence is specific in its identification of the property and the impacts resulting from this facility.

Finally, the Proposed Order imposes a condition that before beginning construction of this facility, the applicant will consult with the owners of land adjacent to the facility site and farmers operating those lands "to address potential conflicts with agricultural practices." Under Rhyne v. Multnomah County, 23 Or LUBA 442, 447 (1992), the finding of compliance with an applicable review criterion cannot be deferred without providing for notice and a hearing at that later date. This condition violates this rule because it allows the Council to defer or delegate its obligation to ensure that conflicts with agricultural and forest practices will not force a significant change in operations or the costs of those operations without giving others an opportunity to participate in that decision and challenge the approach at mitigation.

X. The Application Does Not Meet Relevant Portions of the Klamath County LDO.

LDC §44.030(C) requires that the proposed use not have a "significant adverse impact on the livability, value or appropriate development of abutting properties and the surrounding area." The applicant continually asserts that its purchase of additional property surrounding this industrial use supports a finding of no adverse impact. COB Response Brief at 46. Simply because the applicant creates a fiefdom and states that it will continue to put these purchased lands to farm and forest use does not mean that these surrounding lands that have changed only insofar as their ownership, will not be significantly impacted by this facility. It is completely contrary to a policy of preserving farmland by preventing incompatible uses to allow an applicant to purchase all of the "adversely impacted" property surrounding a use in order to show compliance with compatibility standard where the two separate ownerships abut.

The Proposed Order goes on to state that the facility would not "significantly adversely affect the livability of the area." However, nothing in the findings or the application indicates that the Department identified or considered the nature of the livability or value and the values of the surrounding area. As the attached evidence and direct testimony, the livability and value of the surrounding area will be compromised significantly by this facility. The Langell Valley community is a close-knit rural community of working farms and ranches. The residents choose to live in this area because it provides clean air, clean water and peaceful way of life. Neither the application, nor the Proposed Order adequately identify or consider these adverse impacts, dismissing local opposition as simply "NIMBY." However, the applicant has not submitted any evidence of qualified people challenging this evidence or the conclusions drawn by SORO land use planner concluding that the requirements of LDO §44.030 are not met.

XI. The Applicant Failed to Show Compliance with Goal 3, Policy 3 of the Klamath County Comprehensive Plan

Policy 3 of Goal 3 of the Klamath County Comprehensive Plan provides:

The findings in the Proposed Order conclude that this provision is satisfied because construction of this facility will not result in the conversion of agricultural lands to an urban use because it is a use that is allowed on agricultural lands and, after the facility is retired, it can be returned to a farm use. This finding is completely lacking any basis in Oregon case law. First, an urban use is classified by the location of and number of people that the use will serve, not whether the use is allowed on farm or forest lands. See Hammack and Murray supra. The energy facility proposed in this application will operate to support an urban population in southern California or elsewhere, and thus, it is an urban use. Second, simply because retirement of this facility will allow the land to be returned to farm use does not remove it from categorization in the present as an urban use, particularly given the scale and intensity. If this were the standard, any urban uses could be "temporarily" allowed to exist on farmland because any structure built on farmland could, sometime in the future, be removed to allow farm uses to continue.

Urban uses are restricted on rural lands to protect agricultural activities and to encourage the economic viability of farming and the agricultural community. ORS 215.243 and Goal 3. These agricultural preservation policies are undermined by the applicant’s proposal to drop an industrial use into a rural area, to remove agriculturally productive soils from farm uses, thereby forcing changes in farming practices in the area.

The applicant responds to these allegations by suggesting that Goal 3, policy 3 is not an applicable substantive criterion that does not require compliance. The applicant provides no justification for its conclusion that this standard is not applicable. As explained in Issue 1 above, it is the Council that must determine which local criteria area applicable. OAR 345-022-0030(3). The fact that DOE adopted findings responding to these criteria suggests that DOE believed that it is applicable.

Engaging in an alternatives analysis for locating uses that do not rely on agriculture, as required by OAR 660-004-0020(b), is essential in order to preserve and encourage agriculture. DOE believes that this standard is applicable and by its plain language, the standard cannot be satisfied without first submitting an alternative locations analysis. The applicant has refused to respond to this requirement, misusing the finding in Teledyne supra. Alternative locations were proposed by SORO and these locations went unchallenged by the applicant.

For these reasons, the applicant failed to meet this applicable criteria and this application must be denied.

As explained in greater detail when addressing item I above, it is not up to the applicant or the opponent to identify which standards comprise the "applicable substantive criteria." OAR 345-022-0030(3). Rather, the Council must make this determination and it has failed to do so in this case. Until applicable standards are identified it is impossible for the parties to determine whether all of these standards have been met.

Goal 9 contains fourteen Policy statements; thirteen of these statements are not addressed by the applicant. Many of these policies encourage facilitating an agricultural economy through the construction of agricultural processing facilities and local markets that sell agricultural goods. These policies are not furthered by this proposal that converts land to industrial use and impedes agricultural activities.

Statewide Planning Goal 9 requires identification of current economic development opportunities within the community and efforts to further those opportunities. Farming, forest and recreation uses represent a significant portion of the economy of Klamath County. Therefore, consistent with the requirements of Statewide Planning Goal 9, the County’s Comprehensive Plan encourages the creation of new timber industries, Policy 6, the improvement of the local agricultural industry to create new local markets, Policy 7, and efforts to increase tourism, Policy 9. Not a single one of these Goal 9 policies supports the construction of a new industrial facility on rural land, much less the location of such a facility on productive farmland.

The only Goal 9 policy that could possibly be met by this application is Policy 14 which requires efficient uses of resources. The Proposed Order responds to this requirement finding that the facility will increase the number of jobs as well as increase tax revenues to the County. At best, the promised benefits will accrue for 30 years, or less if tax deferral is authorized. And, neither the applicant nor the Department weighed the theoretical future financial benefits against the resources currently recovered by those lands and the negative economic impacts to surrounding agricultural operations.

This application cannot be approved until the applicant responds to the Goal 9 requirements contained within the plan.

In its brief, as well as in Ms. Hauer’s Alternative Sites Response, SORO explained that it is impossible to tell the size and extent of this facility from the application or the Proposed Order. The land use application requirements for most local governments require that the applicant submit a site plan illustrating the location and footprint of all of the structures associated with the application, the tax lot lines, roadways as well as all additional public facilities such as storm water collection areas or evaporation ponds. The application does not include this type of detailed site plan map. SORO continually requested a complete and updated site plan map to reflect proposed amendments, and the applicant has failed to provide one.

In its initial brief, SORO raised discrepancies that it found in the amount of land needed to accommodate this facility. Rather than specifically respond to these allegations, the applicant stated that the dimensional impacts from this facility were correctly determined. The Department and the Council cannot satisfy its obligation to find compliance with the Statewide Land Use Goals until it knows exactly how large and far this facility will extend.

XIV. Compliance with the Structural Standards not Established

In order to comply with the structural standards of OAR 345-022-0020, the Council must find that:

The geologic technical work completed by the applicant to show compliance with subsections (1)(b) and (c) of this standard is incomplete. All appropriate site-specific studies have not been completed to identify or characterize the potential geologic hazards and avoid dangers to human safety resulting from construction. Use of the past tense in OAR 345-022-0020(1)(c) clearly suggests that the necessary ground geotechnical work must be done prior to siting the facility. The Proposed Order states that a Geotechnical Evaluation will be required of the applicant before final design of the facility. PO 55. To allow testing later is to contradict the express requirement of this standard which mandates adequate study before the facility can be approved.

SORO and Ms. Whitsett have continually asserted that EFSC should require further investigation of the Bryant Mountain fault before it can determine whether OAR 345-022-0020(1) is satisfied. No substantive on-site geologic field work has been undertaken prior to siting the facility. PO 54-55. Standard geologic industry practices dictate that geologic field work for a project of this magnitude and potential effect should entail several months’ worth of detailed surface mapping and sampling of both surface and deep subsurface geology, through deep drilling and Paleolithic trenching programs. The few minor, shallow subsurface borings which have been noted in totality, as the geologic and geotechnical field study of the area appear insufficient to understand the Bryant Mountain Fault and its potential for seismic hazard if a major seismic event occurs along the fault. Mr. Brown, Mr. Bricker and Mr. Dailer have relied upon outdated, previously written general literature and computer models to derive their geologic, hydrogeologic and seismic conclusions. They did not include DOGAMI’s latest maps and written reports of Bryant Mountain and surrounding quadrangles, the Rajnus fault, nor did they undertake their own detailed geologic mapping and study of the site.

Additionally, the applicant should have included some consideration of the information derived from the occurrence of multiple swarms of earthquakes along the Goose Lake Fault, just to the east of the COB site, in Lake County, Oregon. See Attachments to Exhibit 2 to SORO’s Response Brief. These quakes occurred (and are presently still occurring) since the COB draft proposed order was issued. This information is directly related to public safety and the building code standards to which this facility must be built. OAR 345-022-0000(1)(a) and -0020(b). If built, California Building Code standards should be utilized during construction of this facility since it is in the highest ranking seismic area in the continental United States, as delineated by the US Geological Survey.

Many earthquakes of magnitude 3- 5 are occurring almost weekly in close geologic proximity to the area in which COB asks to build this massive facility, and these quake swarms have not been taken into consideration by COB’s models. The nearby George Rajnus, Jr. fault (5 + miles away) and surface rent are indications that the area is seismically active. When the computer modeling was undertaken by Mr. Dailer and Mr. Bricker for COB, they based their assumptions on the nearest surface expression of an active fault nearly 67 miles to the northwest in another geologic province (the Cascade Mountains). Many dozens of earthquakes are presently occurring much closer to the COB site, than was originally recognized, in the same Basin and Range geologic province, so all of this new geologic evidence (including surface displacement at the nearby Rajnus fault) must be considered in any models.

Oregon Department of Energy and DOGAMI scientists and engineers concurred with Ms. Whitsett’s analysis. An e-mail from a State of Oregon employee, Adam Bless dated Feb. 12, 2004, to Janet Prewitt, Umei Wang, Catherine Van Horn and David Stewart-Smith, of the Oregon Department of Energy, states:

This e-mail substantiates that no significant field work was done at the site, except for the very shallow boreholes into the soil. These borings were used to determine building foundation soil stability, not geologic bedrock or fault stability. COB wants EFSC to believe that a sufficient on-ground geotechnical study has been undertaken to determine geologic stability of the site, and according to these e-mails, it has not. Adam Bless of the State of Oregon goes on to further state that other electrical generating facilities – SMPE, Hermiston and HPP, which are significantly smaller and in much less active seismic zones, had more seismic/geologic information than does the COB site.

Further e-mails reflect that COB’s own geotechnical building expert, Mr. Schwarm, has doubts about the paucity of information COB has put into the final order. See Attachments to Exhibit 12 in SORO’s Initial Brief. Mr. Schwarm writes to Adam Bless (State of Oregon engineer) in an e-mail dated Feb. 3, 2004:

SORO has continually suggested that DOE should require further investigations of the Bryant Mountain Fault before writing conditions and siting the plant. Mr. Schwarm of COB’s geotechnical consulting firm and Mr. Bless and Mr. Yumei Wang, employees of the state of Oregon agree that the application lacks needed critical information. The applicant failed to supplement its application with any additional data. Without the necessary additional studies, the Council cannot conclude that the design and construction of this facility will avoid safety hazards resulting from likely seismic events.

For these reasons, this application must be denied.

Conclusion

For all of the reasons set forth above, and consistent with the evidence in the record, SORO respectfully requests that the Hearings Officer issue a Proposed Order very different from that issued by DOE. Either it should remand this case to the Department to initiate rulemaking or apply all of the state land use goals based on substantial evidence in the record or it should deny this application.

Respectfully submitted this _______ day of August, 2004.

I hereby certify that on August 13, 2004, I served the WRITTEN CLOSING ARGUMENT OF SAVE OUR RURAL OREGON, upon the parties shown in the attached service list, by causing the foregoing document to be sent electronically to the parties who provided an e-mail address and hard copy to all parties listed on the revised service list and deposited, postage-prepaid, in the U.S. Mail.

Dated: August 13, 2004.

___________________________

Virginia Gustafson

Hearing Officer

PO Box 1735

Corvallis, OR 97339

Janet L. Prewitt

Assistant Attorney General

Natural Resources Section

1162 Court St. NE

Salem, OR 97301-4096

For: Oregon Department of Energy

E-mail: [email protected]

Catherine Van Horn

Project Officer

Oregon Department of Energy

625 Marion Street NE

Salem, OR 97301

Fabian BAKER

PO Box 247

Bonanza, OR 97623

Marvin & Kay CANTRELL

21566 S Poe Valley Rd

Klamath Falls, OR 97603

Timothy L. McMahan

Stoel Rives LLP

900 SW Fifth Ave., Suite 2600

Portland, OR 97204

For: COB Energy Facility LLC

E-mail: [email protected]

George RAJNUS SR.

11100 Harpold Rd

Klamath Falls, OR 97603

Nancy ROEDER

5827 Valley Ct

Klamath Falls, OR 97603

Derick Steele, authorized by Laura Schoeder

Schroeder Law Offices

1915 NE 39^th Ave.

PO Box 12527

Portland, OR 97212

For: Water for Life

E-mail: [email protected]

Walter SMITH

Dorothy SMITH

12100 W Langell Valley Rd

Bonanza, OR 97623

Margaret TENOLD

PO Box 403

Bonanza, OR 97623

Virginia TOPHAM

35133 Sprague River Rd

Sprague River, OR 97639

Steve WEST

Klamath County Commissioner

Position Number 3

305 Main St

Klamath Falls, OR 97601

Grace WOOD

Water for Life

PO Box 12248

Salem, OR 97309

PDX_DOCS:336459.2 [35044-00100]

08/14/04 12:23 PM