Opinion ID: 1433728
Heading Depth: 1
Heading Rank: 4

Heading: The council's duty to establish standards

Text: The most important issue is whether the council failed to establish the standards required by ORS 469.470 before it reached its decision to recommend a site certificate for the Pebble Springs project. Unlike other administrative law decisions discussing the issue, this case does not present the question whether an agency has been empowered to reach individual decisions directly under the terms of its authorizing statute without articulating any intermediate standards. [6] The energy facility siting act expressly directs the council to set its own standards refining the statutory policies. ORS 469.470 provides that the council shall: (3) Establish standards and promulgate rules that applicants for site certificates must meet including, but not limited to, standards of financial ability and qualifications as to ability to construct and operate the energy facility to which the site certificate applies and prescribe the form. Similarly, ORS 469.510 mandates that the council, in performing its duties including site certification, shall set standards and promulgate rules for safety, construction and operation of thermal plants and nuclear installation[s], taking into account a list of eight considerations. [7] There is thus no doubt that the council is directed to exercise its own judgment in setting standards beyond the policies stated in the statute itself, though of course consistent with those policies. It is less clear that the statute directs the council invariably to set these standards by rulemaking in advance of a specific site certification proceeding. When compared with another section of the same statute that unambiguously directs the council to adopt safety standards promulgated as rules for the operation of all thermal power plants and nuclear installations ..., ORS 469.500 (emphasis supplied), the phrase set standards and promulgate rules is not free from ambiguity. However, the directive to the council gains meaning from the functions served by agency-formulated standards in the context of ORS 469.470 and of ORS 469.510. The demand of ORS 469.470 for standards that applicants for site certificates must meet, indicates that these standards will be available to applicants and to persons opposing applications in sufficiently meaningful terms to guide them in deciding whether and how to submit or oppose an application. The planning of energy facilities takes too much effort, time, and expense to be exposed to rejection under a standard which the applicant could not have known even in broad terms and which it might not have undertaken to meet. But there are differences among the factors to be taken into account and their role in establishing the council's standards under ORS 469.470 and 469.510. Some of the factors to be considered in setting standards for safety, construction, and operation, for instance, are expressly stated in terms relative to a particular site, e.g. the characteristics of the site, ORS 469.510(4), the growth-absorbing capacity of the surrounding area, ORS 469.510(8), and the environmental impact of the installation, ORS 469.510(2), which presupposes a particular environment. Thus the council's standards and rules under ORS 469.510 can initially be stated only in general terms and made more concrete only in the course of a proceeding focusing on a particular kind of installation at a particular location. Nevertheless, at some point they must become standards for making the council's eventual decision, not merely findings in making the decision. If the council chooses in this fashion to move from general over-all standards to more specific ones bearing on the proposed facility and site, it must be able to do so after the initiation of the proceeding. The procedure for adopting a standard to be applied in a few complex, large-scale decisions such as the site certifications entrusted to the council is not necessarily the same as that chosen to state precise rules for numerous or frequently recurring situations. The Oregon Administrative Procedure Act (APA), like most, is premised on a distinction between two kinds of agency action, rulemaking and the decision of contested cases. In principle, rulemaking procedure is to be used in stating general agency policy, ORS 183.310(7). Contested case procedure is to be used in applying statutory or agency policy to specific parties on particular facts. ORS 183.310(2). When the decision of a concrete case presupposes agency adoption of general standards under which it is to be decided, those standards normally must be adopted by rulemaking procedure before they can be applied in the case. However, the APA also recognizes that a general rule will sometimes be stated in explaining a particular decision by an agency, just as by a court. Thus ORS 183.355(5) provides that if an agency, in disposing of a contested case, announces in its decision the adoption of a general policy applicable to such case and subsequent cases of like nature the agency may rely upon such decision in disposition of later cases. The choice of one or the other procedure has important consequences. In adopting a policy or standard as an agency rule, the agency is not bound to facts or arguments in the record of the rulemaking proceeding. ORS 183.335, 183.400(3). Whether or not a hearing is held, interested persons may present data or views bearing on the proposed policy without having to prove either their interest or their assertions; there are no parties to rulemaking. ORS 183.335(3), (4). Accordingly, notice of proposed rulemaking is given to the general public. ORS 183.335(1), (2). But the agency may base its policy on other sources of information and opinion than those submitted to it. In a contested case, by contrast, the issues are supposedly framed by preexisting criteria. Arguments are to be presented by parties and testimony by sworn witnesses. ORS 183.415. Only parties are given notice and only they are entitled to be heard and present evidence. Id. Contested case procedures are not designed to hear representatives of various viewpoints on issues of public policy unless, as in this case, the agency permits them to intervene. The agency's order must be based on findings and conclusions, ORS 183.470, which must rest exclusively on evidence that has been offered and made part of the record, or stipulated or officially noticed for the record, ORS 183.450, otherwise it must be reversed. ORS 183.482(8)(d). This sharp division between procedures for setting standards and procedures for applying them creates widely-recognized difficulties in contemporary administrative law. On the one hand, regulatory standards often rest on scientific, technical, or economic assumptions and probabilities that escape testing in a rulemaking proceeding. [8] On the other hand, the adjudication procedure of a contested case offers neither prior notice nor a familiar form of participation to persons who wish to address the policy premises of a decision apart from the facts of a concrete case. [9] The difficulty of separating the standards of decision from the specific facts is exacerbated when the standards are to govern relatively few, complex, and factually diverse cases. However, we think they can be managed within the energy facility siting act. The act gives the council wide discretion over many facets of the construction of energy facilities. Like much agency discretion, it includes judgments of two kinds: judgments about technological feasibility, economic projections, costs, safety, environmental consequences, and similar probabilities that will call for factual information and agency expertise, and judgments about the relative importance of conflicting goals, about values and priorities, in short, policy judgments. With respect to matters on which the statute itself expresses a policy, its directive to the council to adopt standards calls for the factual kind of judgment and procedures appropriate thereto. But where the statute entrusts choices between alternate policies to the agency, its directive to adopt standards calls for agency articulation of these choices, and the procedures for public participation take the place of the legislative forum. It is these latter, policymaking choices that particularly demand procedures open to the assertion of viewpoints beyond those of the applicant and the agency staff. We may take notice, for purposes of illustration only, that since this case was argued the council has been holding widely-publicized and widely-attended rulemaking hearings on the relationship between nuclear waste disposal and future construction of nuclear power plants. Under the APA, as we have said, this is the normal way to set policy standards in advance of their application in a concrete case. But it is not the only way. It is not indispensable that every standard under ORS 469.470(3) and 469.510 have been adopted in the form of a rule before the initiation of a contested case, as long as it is in fact adopted as a standard, upon notice and procedures that allow for the presentation of views and data on the issues involved, and sufficiently in advance of the final decision so that the applicant and other parties can address the import of the standard for the particular project. One way could be to conduct a rulemaking proceeding on a proposed standard, upon proper notice, along with the contested case. Another way is provided by the provision of the APA that allows an agency to admit participants to intervene in the contested case itself without assuming the full adversary rights and obligations of parties or the evidentiary limitations of witnesses. ORS 183.450(3). While ORS 469.380(2) provides for intervention as a party complainant or defendant, we do not read this provision to be exclusive of the other forms of participation stated in the APA. We do not prescribe one specific procedure. Where the act does not itself prescribe that standards must be rules (as it does in 469.500), the choice of procedure is left to the council to make, in the first instance through its own rules of procedure, as long as the purposes we have stated are met. [10]