Opinion ID: 1433728
Heading Depth: 1
Heading Rank: 5

Heading: The council's standards and findings

Text: The council did purport to adopt some standards as rules in advance of its Pebble Springs proceeding. But it phrased these rules mostly as demands for information that an applicant must supply. OAR 345-25-001 to XXX-XX-XXX. In 1975, the council issued rules addressed to holders of site certificates. OAR 345-26-005 to XXX-XX-XXX. These rules are stated to carry out ORS 469.500 and 469.510. They relate to site certification under ORS 469.470 indirectly insofar as applicants must be prepared to comply with them. The parties are in disagreement about what constitutes a standard for purposes of the energy facility siting act and whether such standards as the council adopted have been satisfied. We consider these questions with respect to each of the council's challenged conclusions. 1. Financial ability. This is one of the standards for applicants mandated by ORS 469.470. The council's rule on financial ability reads, in part: XXX-XX-XXX APPLICANT'S FINANCIAL ABILITY. The application shall provide information sufficient to demonstrate the financial qualifications of the applicant to construct and operate the plant. Such information shall show that the applicant possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction costs, operating costs for the design lifetime of the plant, including related fuel cycle costs, and the estimated costs of permanently shutting the facility down and maintaining it in a safe condition. The rule is stated as a demand for information to be included in the application. Respondents also rely on additional such requirements as further standards bearing on financial ability. [11] But a demand for information does not tell an applicant, the staff representing the agency, any other party, or the hearing officer what conclusion the information is required to prove. It provides no verbal yardstick against which the evidence is to be measured. A demand for information standing alone is not a standard. In the council's quoted rule 345-25-047, however, the demand does not stand alone. The rule requires an applicant to show access to funds necessary to build the proposed plant, to operate it over its useful life, and to shut it down and maintain it in a safe condition. As a standard, it is minimal and could well be made more informative. [12] But although the reference to these financial requirements leaves a good deal to judgment from one project to another, it does state an initial standard of financial ability that the applicant must meet, as required by ORS 469.470. Petitioner further challenges the absence of a finding that the applicant has the requisite financial ability. If the rule quoted above states a standard that applicants for site certificates must meet, then an order in a contested case requires a finding of ultimate fact that the applicant has (or has not) demonstrated the financial ability to do everything required by the standard and a statement of the underlying facts supporting the findings. ORS 183.470. Respondents try to imply such findings from phrases in two findings related to other matters and from a warranty of financial ability included in the site certificate agreement. But none of these can qualify as a finding by the council that its stated standard of financial ability has been satisfied. This is no trivial shortcoming, especially in light of the council's later motion in the Court of Appeals to remand the case on this issue. 2. Qualifications to construct and operate. A second standard mandated by ORS 469.470 concerns the applicant's qualifications as to ability to construct and operate the project. The council's rule in this respect first informs applicants and others that [the council] establishes qualifications as to ability to construct and to operate thermal power plants that applicants for site certificates must meet. The remainder of the rule is solely a demand for information concerning the applicant's employees and prior experience which shall be provided in sufficient detail to establish the applicant's compliance with qualifications established by the Council. OAR 345-25-049. Unlike the rule on financial ability, this rule obviously does not purport to establish a standard of qualifications in itself; it points to a standard allegedly established somewhere else. But there is no further indication where these qualifications established by the Council may be found or what they are. PGE argues that a standard of operating qualifications can be deduced from another council rule, OAR 345-26-015(4), which requires site certificate holders to comply with federal requirements for operating a nuclear facility. From this PGE would apparently infer a council decision to establish ability to comply with the regulations of the federal Nuclear Regulatory Commission as the council's only standard of qualifications under ORS 469.470. [13] The problem with this is not that the council said so in the wrong form, at the wrong time, or by the wrong procedure  it nowhere said so at all. [14] The adoption of a required standard of qualifications, the finding that an applicant meets the standard, and the supporting statement of underlying facts cannot all be telescoped into an inference from the mere inclusion of warranties in the site certificate. 3. Power needs. Under ORS 469.510, present and future power needs are one of eight factors that the council is to take into account in adopting standards and rules for safety, construction and operation of thermal plants. [15] Petitioner challenges both the council's rules and its findings concerning the need for the power from the Pebble Springs project. But the statute does not direct the council to state standards with respect to power needs, by rules or otherwise, though it may do so if it chooses. [16] The council found as an ultimate fact that PGE's customers will need the power from the project by 1984-86. When the council determines that a factual predicate is important to its conclusion on one of the issues entrusted to it, as the council apparently did with respect to power needs, the issue must be identifiable and the finding of ultimate fact supported by underlying facts. It is not clear whether the council equated need with demand. The statement of underlying facts refers to PGE forecasts of demand for its power and certain studies made by its staff and by the Public Utility Commissioner. These procedural recitals are not proper findings of fact by the council itself and do not elucidate the ultimate finding. In the 1975 energy legislation which reorganized the council and created the Department of Energy, the legislature did not equate need and demand. See ORS 469.060, 469.070. Demand is a fact to be estimated or projected, need is a conclusion that involves policy judgment. The statute directs all agencies, including the council, to review their policies for consistency with the state's energy policy stated in ORS 469.010 and, after July 1, 1976, to report thereon to an Energy Policy Review Committee. ORS 469.100. Thus it is the council's responsibility to decide whether to treat all demand as need under the energy facility siting act as a matter of policy, by one of the means to which we have referred. [17] The findings and conclusions do not show that the council adopted such a policy. 4. Other findings. Petitioner contends that many of the commission's findings are only recitals of evidence and not proper findings as required by law. The criticism is well taken. [18] This court has repeatedly emphasized the importance of clear findings both of ultimate facts and of underlying facts as required by ORS 183.470. See Wright v. Insurance Commissioner, 252 Or. 283, 292, 449 P.2d 419, 423 (1969) and cases cited there. This requirement does not rest only on the needs of judicial review. It is addressed in the first instance to responsible decision by the agency. State agencies, unlike federal agencies, are often composed of private citizens who are given crucial governmental responsibilities on a part-time basis, as was done when the 1975 reorganization eliminated the heads of other energy and environmental agencies from the council. It is doubly important that such non-professional agency heads not think of their staff as the agency and themselves as a reviewing body, but rather understand clearly that it is their personal responsibility to determine the facts and to set and apply the standards entrusted to them by the act. Without proper findings by the council, we cannot simply infer this from the recital of evidence, as the Court of Appeals did in this case.