One of the challenges of renewable energy development is managing the permitting process. Understanding how to navigate state and local laws can be integral to a developer’s permitting success, especially where a community may be hostile to the prospective power project. The Court of Appeals of Minnesota underlined this point in its recent decision in Matter of USS Water Town Solar LLC. On July 27, 2020, the appellate court reversed a county’s denial of a conditional use permit (CUP) for construction of a solar project. The county did not deny the CUP application within the statutorily prescribed time period, which resulted in automatic approval.

The solar developer submitted its CUP application on January 14, 2019. Minnesota law requires the county to decide the application within 60 days of a complete submittal, subject to an additional 60-day extension upon providing appropriate notice to the applicant. Le Sueur County marked the CUP application “complete” and made the completed application available publicly on its website. In early February, the county exchanged emails with the developer regarding two adjustments to the site plans it required before the CUP application could be considered. On February 6, 2019, the developer updated the site plans accordingly.

On February 28, 2019, Le Sueur County sent the developer a letter that stated the county was extending the evaluation period 60 days running from March 15, 2019. This set the new deadline for review of the CUP application at May 14, 2019. Ultimately, the county voted to reject the CUP application on May 28, 2019. The developer responded to this denial by noting that the 60-day extended review period had already expired and, under Minnesota law, failure to decide within the 60-day window resulted in automatic approval of the application.

The county disputed this claim arguing that (1) the initial 60-day review period actually started on February 6, 2019, upon receipt of the updated site plans and (2) the county had made a clerical error by specifying March 15, 2019, as the date from which the 60-day extension ran. According to the county, the letter extending the review period should have used April 7, 2019, as the starting date. The review period, therefore, expired on June 6, 2020, and the county’s May 28, 2019, denial of the CUP application was timely. The developer appealed.

In finding for the developer, the appellate court made the following factual determinations:

• The developer submitted a complete CUP application on January 14, 2019;
• The county’s designation of the application as “complete” and making the completed application publicly available put the developer and public on constructive notice that the application was complete;
• Under the applicable statute, the developer’s update of the site plans did not qualify as an amendment to the application or demonstrate the application was incomplete;
• The county’s letter extending the review period starting on March 15, 2019 — 60 days after January 14, 2019 — was further evidence that the county treated the application as complete on January 14; and
• The county’s listing of March 15, 2019, as the start date for the extended review period did not qualify as a “clerical error.”

Although the court acknowledged that the time limit requirements under the relevant statute should be construed narrowly to avoid application of the automatic-approval rule, the court concluded that the circumstances and conduct of the county in the dispute required approval. The court summarized its view in the concluding paragraphs of its opinion:

The county designated the January 14, 2019 applications as completed. It notified the company[y] in unambiguous terms that the 60-day extensions would begin on March 15, 2019. And at no point during the additional 60 days did the county ever communicate or attempt to correct the supposed clerical error. No narrow construction can except the county’s delay from the absolute force of the statute: “Failure of an agency to deny a request within 60 days is approval of the request.” Minn. Stat. § 15.99, subd. 2(a)… Approval became effective immediately after the 60-day extensions expired.

Takeaways from USS Water Town Solar

Clearing government and permitting hurdles is an important aspect of successful renewable energy project development. The developer in USS Water Town Solar was able to use its keen understanding of applicable Minnesota law to keep its project moving forward in the face of staunch local opposition. That sort of savvy and technical knowledge of local statutes, regulations, and ordinances can potentially save a project.

Developers navigating similar situations should, however, be mindful that their dealings with local authorities continue beyond the approval of initial land use entitlements. There may be other ways for a local authority to frustrate or delay project development and construction, and the developer likely needs to preserve opportunities for future projects. As a practical matter, a developer should be cognizant of the importance of maintaining its relationship with local officials and explore ways to increase community support for the project to avoid future conflict.

If you have questions about conditional use permits or renewable energy project development and construction, please do not hesitate to contact Monica Dozier, Chris Bowles, or Aman Kahlon.